The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has urged state governments to reduce their dependence on federal allocations by strengthening internally generated revenue, attracting investments and creating jobs.
Oyedele made the call on Wednesday in Owerri, Imo State, at the ongoing 2026 National Council on Finance and Economic Development Retreat.
Speaking on the theme, “Strengthening Fiscal Federalism for Equity, Sustainable Development and Economic Resilience in a Volatile Global Economy,” the minister said Nigeria needed to rethink its revenue allocation and derivation framework while promoting greater fiscal responsibility among the three tiers of government.
He said recent economic reforms, including the removal of fuel subsidy and the unification of the foreign exchange market, had significantly increased revenues available for distribution through the Federation Account.
According to him, monthly Federation Account allocations, which averaged between N300 billion and N600 billion before 2023, had risen above N2 trillion.
He cited June 2026 as an example, when the Federation Account Allocation Committee distributed N2.8 trillion to the federal, state and local governments.
Oyedele, however, warned that increased allocations alone would not translate into development unless governments channelled the additional revenue into infrastructure, human capital, productivity and improved public services.
“Nigeria must move from an allocation-dependent economy to one driven by production, investment and job creation,” he said.
The minister also called for prudent borrowing and greater transparency in public finance, cautioning governments against accumulating liabilities without credible repayment plans.
He urged participants at the retreat to ensure that discussions on fiscal federalism were based on evidence and adapted to Nigeria’s changing economic realities.
Imo State Governor, Hope Uzodimma, represented by his deputy, Chinyere Ekomaru, also called for greater fiscal autonomy and improved revenue generation by states.
Uzodimma said continued dependence on oil revenue was no longer sustainable, adding that states needed to improve their ability to generate and manage resources efficiently.
He said Imo had digitised its revenue collection system, blocked revenue leakages and increased its IGR as part of efforts to achieve his administration’s “shared prosperity” agenda.
The governor said the state was also investing in agriculture, the digital economy, tourism, power, education, small and medium-sized enterprises and infrastructure to create jobs and expand opportunities for young people.
Earlier, the Permanent Secretary, Special Duties, Federal Ministry of Finance, Mohammed Sanusi, described the retreat as timely, given the ongoing economic reforms and the need to strengthen Nigeria’s fiscal system.
The event was attended by the Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission, Mohammed Shehu; Accountant-General of the Federation, Shamsudeen Ogunjimi; Chairman of the Forum of State Commissioners for Finance, Akintunde Oyebode; and Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, among others.
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