The Minister of State for Finance and Chairman of the Federation Account Allocation Committee (FAAC), Dr Doris Uzoka-Anite, wants the three tiers of government to manage anticipated increases in federation account revenues with fiscal discipline, warning against the inflationary risks of sudden liquidity injections into the economy.
Adressing a FAAC meeting against the backdrop of the recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity 2026, and implementation of the new tax laws, the Minister noted that the reforms are expected to result in higher monthly gross inflows into the Federation Account, increased allocations to Federal, State and Local Governments, and higher derivation transfers to oil-producing states.
A retrospective audit of relevant funds may also yield one-off recoveries, providing an additional fiscal boost.
However, she cautioned that sudden liquidity injections, if not well managed, could fuel inflationary pressures, exchange rate volatility, and excess aggregate demand. Dr Uzoka-Anite accordingly proposed phased disbursement of any one-off recoveries, strengthening of the Excess Crude and Stabilisation Buffer mechanism, closer coordination with the Central Bank of Nigeria, and prioritisation of capital over recurrent expenditure by all benefiting governments.
The Minister urged all tiers of government to deploy incremental revenues towards reducing debt, clearing arrears, building fiscal buffers, and investing in growth-enhancing sectors, warning against treating higher allocations as permanent windfalls.