FAAC Urges Fiscal Discipline as Presidential Executive Order and Tax Reforms Promise Higher Federation Allocation
Abuja, Nigeria — February 22, 2026
The Minister of State for Finance and Chairman of the Federation Account Allocation Committee (FAAC), , has called on the three tiers of government to exercise fiscal discipline in managing anticipated increases in federation account revenues, warning that poorly managed liquidity injections could trigger inflationary pressures and macroeconomic instability.
Addressing members at a meeting of the , Dr. Uzoka-Anite spoke against the backdrop of the recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity 2026, alongside the implementation of newly enacted tax laws.
According to the Minister, the reforms are expected to significantly boost monthly gross inflows into the Federation Account. This, she said, would translate into higher statutory allocations to the Federal Government, States, and Local Government Councils, as well as increased derivation transfers to oil-producing states. She added that a retrospective audit of relevant funds could yield one-off recoveries, potentially providing an additional fiscal stimulus.
While acknowledging the positive revenue outlook, Dr. Uzoka-Anite cautioned that sudden surges in public spending could destabilize the economy if not carefully managed.
“An abrupt injection of large volumes of liquidity into the economy, particularly if directed toward recurrent expenditure, may fuel inflationary pressures, heighten exchange rate volatility, and create excess aggregate demand,” she warned.
To mitigate such risks, the FAAC Chairman proposed a series of coordinated fiscal safeguards, including:
Phased disbursement of any one-off recoveries arising from retrospective audits;
Strengthening the Excess Crude and Stabilisation Buffer mechanism to cushion against external shocks;
Closer coordination with the to align fiscal and monetary policy responses; and
Prioritisation of capital expenditure over recurrent spending across all tiers of government.
Dr. Uzoka-Anite further urged governments to channel incremental revenues toward reducing public debt, clearing salary and contractor arrears, rebuilding fiscal buffers, and investing in growth-enhancing sectors such as infrastructure, agriculture, manufacturing, and human capital development.
She emphasized that higher allocations should not be treated as permanent windfalls but as an opportunity to strengthen Nigeria’s fiscal resilience.
“This is a moment for prudence and strategic investment, not profligacy,” she stated. “The sustainability of these gains will depend on disciplined management and a shared commitment to long-term macroeconomic stability.”
The Minister reaffirmed FAAC’s commitment to transparency, accountability, and intergovernmental collaboration to ensure that the anticipated revenue gains translate into sustainable development outcomes for Nigerians.
