Professor Funmilayo Adesanya-Davies, former presidential candidate, has urged President Bola Ahmed Tinubu to personally supervise the Federation Account Allocation Committee (FAAC) disbursement process to ensure transparency, efficiency, and proper distribution of national resources.
In August 2025, the Federation Account Allocation Committee (FAAC) disbursed a record-breaking N2.225 trillion to the three tiers of government in Nigeria. This significant allocation is a testament to the country’s potential for economic growth, but it also raises a pressing question: why are Nigerians still living in abject poverty? Nigerians are disturbingly very hungry! Despite the highest-ever revenue allocation, poverty remains a pervasive issue in Nigeria.
One major factor contributing to this paradox is the inefficient distribution and utilization of funds. The FAAC allocation is substantial, but if the allocated funds are not efficiently distributed and used, they may not translate to meaningful development or poverty reduction. Corruption and misappropriation of funds also significantly hinder the effectiveness of poverty reduction initiatives.
Furthermore, Nigeria’s economy is heavily dependent on oil revenue, which can be volatile. The decline in gross statutory revenue due to lower petroleum profit tax highlights the need for diversification.
Another critical issue is the lack of infrastructure and basic amenities. Despite the significant allocation, many Nigerians still lack access to basic amenities like electricity, healthcare, and clean water. This underscores the need for the government to prioritize infrastructure development and ensure that allocated funds are utilized effectively.
To address poverty in Nigeria, the government needs to implement policies that promote economic diversification, efficient allocation of funds, and transparency. Diversifying the economy, improving infrastructure, and promoting transparency and accountability are essential steps towards reducing poverty and improving the lives of Nigerians.
The Paradox of Poverty Amidst Plenty: Understanding Nigeria’s Economic Conundrum:
The Revenue Allocation Breakdown:
The FAAC allocation for August 2025 comprised:
– Statutory Revenue: N1.478 trillion, with the Federal Government receiving N684.462 billion, State Governments receiving N347.168 billion, and Local Government Councils receiving N267.652 billion.
– Value-Added Tax (VAT): N672.903 billion, with the Federal Government receiving N100.935 billion, states receiving N336.452 billion, and local governments receiving N235.516 billion.
– Electronic Money Transfer Levy (EMTL): N32.338 billion, with the Federal Government receiving N4.851 billion, states receiving N16.169 billion, and local governments receiving N11.318 billion.
– Exchange Difference: N41.284 billion, with the Federal Government receiving N19.799 billion, states receiving N10.042 billion, and local governments receiving N7.742 billion.
The Poverty Paradox:
Despite the record-breaking allocation, many Nigerians continue to struggle with poverty. Several factors contribute to this paradox:
– Inefficient Allocation and Utilization of Funds: The FAAC allocation is substantial, but the utilization of these funds is crucial. If the allocated funds are not efficiently used, they may not translate to meaningful development or poverty reduction.
– Corruption and Misappropriation: Corruption and misappropriation of funds can significantly hinder the effectiveness of poverty reduction initiatives.
– Dependence on Oil Revenue: Nigeria’s economy is heavily dependent on oil revenue, which can be volatile. The decline in gross statutory revenue due to lower petroleum profit tax, companies’ income tax, import duty, excise duty, and EMTL highlights the need for diversification.
– Lack of Infrastructure and Basic Amenities: Despite the significant allocation, many Nigerians still lack access to basic amenities like electricity, healthcare, and clean water.
The Way Forward
To address poverty in Nigeria, the government needs to implement policies that promote economic diversification, efficient allocation of funds, and transparency. Some potential solutions include:
– Diversifying the Economy: Reducing dependence on oil revenue and promoting other sectors like agriculture, manufacturing, and services can help stabilize the economy and reduce poverty.
– Improving Infrastructure: Investing in infrastructure like roads, electricity, and healthcare can improve the quality of life for Nigerians and attract investment.
– Promoting Transparency and Accountability: Ensuring transparency and accountability in government spending can help reduce corruption and ensure that allocated funds are utilized effectively.
In conclusion, while the FAAC allocation is a significant step towards addressing poverty in Nigeria, it is crucial to address the underlying issues that hinder the effectiveness of these funds by utilizing the funds appropriately. Ultimately, the government must prioritize the welfare of its citizens and ensure that allocated funds are utilized effectively to drive meaningful development and poverty reduction. In addition is by promoting economic diversification, improving infrastructure, and ensuring transparency and accountability, so Nigeria can work towards reducing poverty and improving the lives of its citizens.
Signed
Nuhu Agum, SSA, PMACO
For Prof. Funmilayo Adesanya-Davies
Former Presidential Candidate
