By Peace Udugba
Senior Advocate of Nigeria and former President of the Nigerian Bar Association, Dr. Olisa Agbakoba, has raised fresh concerns over what he described as deep structural leakages within Nigeria’s public finance system, warning that the country could be losing as much as ₦20 trillion annually through inefficiencies, weak enforcement of fiscal laws, and alleged mismanagement in key revenue-generating institutions.
Agbakoba made the claims on Monday during an interview on Frontline, a current affairs programme on Eagle 102.5 FM, Ilese-Ijebu, Ogun State, where he analyzed Nigeria’s socio-economic challenges and recurring dependence on borrowing despite multiple revenue streams.
Constitutional Concerns Over Federation Account
The Senior Advocate said Nigeria’s constitutional fiscal framework, particularly Section 162 of the 1999 Constitution, clearly mandates that all federally collected revenues be paid into the Federation Account without deductions. However, he argued that implementation has been undermined by institutional practices that operate outside this requirement.
According to him, weak compliance has created opportunities for leakages across major revenue agencies, thereby limiting funds available for national development.
Rising Borrowing Amid Revenue Challenges
Agbakoba expressed concern that Nigeria continues to accumulate debt despite its revenue potential, describing the situation as a structural contradiction.
He likened the country’s fiscal behaviour to an entity borrowing while still holding sufficient funds, arguing that the problem lies not in revenue scarcity but in poor consolidation and management of public funds.
Allegations of Oil Sector Leakages
A significant portion of his remarks focused on the Nigerian National Petroleum Company Limited (NNPC), which he described as central to alleged leakages in the oil and gas sector.
He claimed that deductions and financial arrangements within the sector have reduced inflows into the Federation Account, weakening the country’s fiscal position.
Agbakoba also referenced ongoing investigations and reforms in the oil sector as evidence that the federal government itself acknowledges the existence of systemic financial gaps.
He further questioned unconventional financing arrangements linked to future crude oil production, arguing that such “forward sale” structures could compromise long-term national revenue.
Concerns Over Refinery Rehabilitation and Oil Imports
The Senior Advocate also questioned repeated spending on refinery rehabilitation projects in Port Harcourt, Warri, and Kaduna, noting that despite significant investments, local refining output remains limited.
He criticised the continued importation of refined petroleum products despite Nigeria’s crude oil production capacity, describing the arrangement as economically inefficient and reflective of deeper governance issues.
Wider Revenue Leakages Across Sectors
Beyond the oil sector, Agbakoba said multiple revenue streams — including taxes, royalties, licensing fees, and solid minerals — are affected by systemic leakages.
He estimated that Nigeria may be operating significantly below its actual revenue potential due to inefficiencies in collection and accountability mechanisms.
Citing external assessments, including World Bank estimates, he said revenue losses could run into trillions of naira annually, further worsening Nigeria’s fiscal position and increasing reliance on borrowing.
Debt Burden and Governance Concerns
Agbakoba warned that rising debt servicing obligations are increasingly consuming national revenue, leaving limited resources for infrastructure and social development.
He also criticised what he described as political distractions within governance, arguing that attention is often focused on electoral politics rather than structural economic reforms.
Subsidy Removal and Fiscal Management
While acknowledging that fuel subsidy removal and exchange rate reforms were necessary, he argued that the gains have not been properly managed or directed toward productive investments.
He suggested the creation of a dedicated infrastructure fund to ensure that savings from subsidy removal translate into measurable development outcomes, rather than being distributed without strong accountability mechanisms.
Call for Urgent Fiscal Reform
Agbakoba concluded that Nigeria must urgently restructure its fiscal architecture to address leakages, improve accountability, and strengthen revenue management systems.
He warned that without urgent reforms, the country risks continued cycles of borrowing, inefficiency, and underdevelopment despite rising national earnings.
He also urged that fiscal accountability and revenue management become key issues in Nigeria’s 2027 political discourse, insisting that governance must be measured by how effectively public resources are managed for citizens’ welfare.
