Former President of the Nigerian Bar Association, Mr Olisa Agbakoba, SAN, has stated that the constitutional framework guiding Nigeria’s revenue structure has been undermined by agencies operating parallel financial arrangements outside the Federation Account.
This was as he questioned why Nigeria has continued to borrow thereby accumulating debt despite possessing substantial revenue-generating capacity if the resources were properly managed and likened the situation to a household borrowing money despite having enough funds in its bank account to meet its obligations.
Agbakoba specifically expressed concerns over the World Bank findings on Nigeria’s revenue leakages, stressing that international assessments similarly indicate significant losses in public finance administration, thus warned that the continued shortfall in revenue collection has forced governments at all levels into unsustainable borrowing patterns.
The senior lawyer also questioned the developmental impact of increased monthly allocations to state governments, stressing that while the States now receive significantly higher revenues, there is no corresponding improvements whatsoever in public welfare or infrastructure.
Agbakoba noted that Nigeria’s total public debt has geometrically risen to alarming levels just as debt servicing now consumes a significant portion of government earnings.
In his words; “If we earn 100 Naira, we first have to remove about 70 Naira to service debt obligations. The development leaves very little for infrastructure, salaries, education, healthcare, and other governance responsibilities”.
Agbakoba said that Section 162 of the Nigerian Constitution, made it mandatory for all revenues generated by the federation to be paid into a central Federation Account without deductions, stressing that the provision has not been effectively implemented, thus created loopholes for revenue leakages across major government institutions.
The erudite lawyer who stated these while speaking during an interview programme on Frontline, a current affairs programme on Eagle 102.5 FM, noted that the Federation of Nigeria has a constitutional account into which all revenues are expected to be paid without deductions, stressing that the reality is different.
He also raised serious concerns over what he described as “massive structural leakages” in Nigeria’s public finance system, and cautioned that the country risk losing as much as ₦20 trillion annually through weak fiscal governance, oil sector manipulations, and institutional inefficiencies.
Agbakoba particularly said that the nation’s continued dependence on borrowing despite its vast revenue potential reflects deep-rooted failures in public finance management.
He pointedly accused the Nigerian National Petroleum Company Limited (NNPC Ltd) of playing a central role in the revenue crisis through multiple deduction practices and opaque financing arrangements that significantly reduce inflows into the Federation Account.
Agbakoba associated the current situation to President Bola Ahmed Tinubu’s decision to dissolve the former NNPC board led by Mele Kyari, stressing that the action reflected official recognition of deep systemic problems within the oil sector.
He further said that ongoing anti-corruption investigations involving officials of the oil company further validate concerns about financial leakages and poor accountability.
Agbakoba also expressed serious concern over reoccurring spending on refinery rehabilitation projects in Port Harcourt, Warri, and Kaduna despite limited operational output from the facilities, stressing that it is economically irrational for Nigeria to continue exporting crude oil while importing refined petroleum products.
According to him; “The refineries are still not functioning despite huge investments. Without the Dangote Refinery, Nigeria would still be trapped in the endless cycle of fuel importation.
“The country’s revenue crisis extends beyond oil earnings, as petroleum profit tax, royalties, signature bonuses, gas penalties, company income tax, stamp duties, and solid mineral revenues are all affected by systemic leakages,” he said.
Agbakoba berated what he described as the growing obsession by political actors over the 2027 elections at the expense of governance and institutional reforms, saying that virtually all office holders are more interested in 2027 than governance.
He said; “Nigerians should demand clear policy directions from political leaders on how they intend to block leakages, improve revenue collection, and reduce dependence on borrowing.
“Without urgent reforms in revenue oversight, expenditure management, and institutional accountability, Nigeria would remain trapped in a cycle of debt, inefficiency, and underdevelopment despite its enormous economic potential,” he warned.
