- Tasks Finance Ministry on review
In an effort to get more revenue from key revenue generating agencies, Nigeria’s president has mandated the finance minister to review deductions by these agencies, with the objective of reducing their take to free more funds for the government.
President Bola Tinubu as a result, has directed the ministry of finance to review all deductions and revenue retention practices by key revenue-generating agencies.
The directive is said to be part of efforts to free up funds for investment and accelerate economic growth.
Wale Edun, minister of finance and coordinating minister of the economy, announced the development on Wednesday while briefing journalists after the federal executive council (FEC), a meeting presided over by Tinubu in Abuja.
Edun said the review will cover the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Maritime Administration and Safety Agency (NIMA- SA), and the Nigerian National Petroleum Company (NNPC) Limited.
Currently, the FIRS receives 4 percent of all non-oil revenues, while the NUPRC gets 4 percent of royalties, rents, and other revenues from the oil and gas sector. In the same vein, the NCS keeps 7 percent of revenue from duties and levies. This funding model is known as the cost of collection.
According to Agora Policy, following the implementation of the Petroleum Industry Act (PIA), the national oil firm has been deducting 60 percent of oil and gas profit from production sharing contracts (PSCs). The amount comprises a 30 percent management fee, and an additional 30 percent for the frontier exploration fund.
Speaking to journalists, Edun said Tinubu specifically called for a reassessment of NNPC’s 30 percent management fee and 30 percent frontier exploration deduction under the PIA.
According to the minister, the directive is aimed at “optimising public savings, enhancing spending efficiency, and freeing up more resources to finance growth”.
He quoted the president as commending the agencies for implementing “bold and difficult reforms” that have dismantled economic distortions, restored policy credibility, enhanced resilience, and strengthened investor confidence.
He said the reforms have created a transparent, competitive business environment that now positions Nigeria to attract more domestic and foreign investment in critical sectors such as infrastructure, oil and gas, health, and manufactured exports.
The minister said Tinubu reaffirmed his administration’s target of building a $1 trillion economy by 2030, which he said would require at least 7 percent annual economic growth from 2027.
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