The Federal Government’s economic policies came under renewed criticism on Tuesday after the African Democratic Congress accused President Bola Tinubu and governors elected on the platform of the All Progressives Congress of allegedly diverting more than N800 billion from Federation Account Allocation Committee allocations for political activities ahead of the 2027 general elections.
The allegation surfaced amid reports that the Federal Government had reopened discussions with the World Bank over a proposed $1.25 billion loan facility to support economic reforms, job creation and competitiveness.
The development has intensified concerns over fiscal transparency, public finance management and the worsening economic hardship facing many Nigerians under the administration’s reform policies.
While the ADC alleged that public resources were being converted into a political “war chest” for future elections, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, defended the administration’s economic reforms, insisting that Nigeria could no longer depend heavily on borrowing to finance development.
In a statement issued by its National Publicity Secretary, Bolaji Abdullahi, the ADC described the alleged diversion of FAAC funds as “shameless, cruel and criminal.”
According to the party, reports alleging that over N800 billion was raised through deductions from FAAC allocations confirmed long-standing fears that the ruling APC was using public resources to finance its political ambitions ahead of the 2027 elections.
“The report alleging that over N800 billion was raised through deductions from FAAC allocations for political purposes confirms what Nigerians have long suspected, that while the administration continues to tell the people to endure the pains of its ill-fated economic reforms, the APC has been converting public resources into a war chest for 2027 politics,” the statement read.
The opposition party argued that despite the increase in allocations to states following the removal of fuel subsidy and the devaluation of the naira, living conditions for ordinary Nigerians had continued to deteriorate.
“Under this APC government, states are receiving more money than at any other period in Nigeria’s history, yet Nigerians are poorer, hungrier and more desperate than ever before,” the party stated.
“Roads are still collapsing. Hospitals are still empty. Schools are still underfunded. Workers are underpaid. Communities remain unsafe. The only thing growing is the political appetite of the ruling party.”
The ADC maintained that if the allegations published by The Will newspaper were accurate, they would amount to large-scale political corruption and diversion of resources intended for public welfare and development projects.
“FAAC allocations are meant for development, salaries, healthcare, education, infrastructure, security and the welfare of citizens, not for financing the re-election plans of one man,” the statement added.
The party also demanded an independent investigation into the alleged deductions and accounts reportedly linked to the operation.
The allegations came as Oyedele warned that Nigeria must urgently build a sustainable fiscal structure capable of financing critical sectors without relying excessively on debt.
Speaking at the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria in Abuja, the minister said government revenues remained insufficient to meet the country’s growing development demands.
“Nigeria cannot continue to finance development primarily through borrowing. We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security and social protection,” he said.
Oyedele explained that the administration’s ongoing tax reforms were aimed at improving fiscal sustainability, encouraging investment and reducing structural distortions in the economy.
According to him, Nigeria’s tax system had suffered for years from multiple taxation, fragmented administration, weak compliance and overdependence on a narrow revenue base.
“Businesses faced overlapping debts, unpredictable enforcements and rising compliance costs. Citizens often perceived the tax system as unfair because the burden was unevenly distributed,” he said.
The minister disclosed that minimum wage earners had been exempted from personal income tax under the reforms, while tax burdens on low- and middle-income earners had also been reduced.
He added that the government was proposing cuts in companies’ income tax rates to improve Nigeria’s attractiveness to investors, while also modernising the Value Added Tax system through expanded input VAT credits and exemptions on essential goods and services.
Oyedele further stated that the Federal Government was collaborating with states to harmonise taxes and eliminate multiple levies imposed on businesses, revealing that 15 states had already enacted tax harmonisation laws.
He, however, acknowledged persistent challenges, including weak institutional capacity, public distrust and the difficulty of integrating the informal sector into the tax system.
Also speaking at the conference, Vice President Kashim Shettima and Senator Adams Oshiomhole called for greater patriotism in tax compliance and increased public trust in the government’s fiscal reforms.
Represented by Special Adviser to the President on Economic Affairs, Tope Fasua, Shettima said the administration’s economic policies were focused on inclusive growth, innovation and efficient taxation.
He stated that the government’s broader goal was to move Nigeria away from dependence on raw material exports toward a diversified, innovation-driven economy capable of creating opportunities across different sectors.
The Vice President also stressed the importance of infrastructure development, especially rail and urban transportation systems, in boosting commerce and economic integration.
Shettima admitted that many Nigerians were still unaware of key provisions of the reforms, including tax exemptions for individuals earning N1 million or less annually and small businesses with turnover below N100 million.
“These reforms are deliberately pro-poor and pro-business,” he said, while urging improved public communication to counter misinformation and strengthen confidence in the policies.
He also described tax payment as an act of patriotism and urged Nigerians to view compliance as a contribution to national development rather than a burden.
In his remarks, Oshiomhole described taxation as the foundation of governance and advocated a more progressive tax system that would impose higher tax rates on wealthy individuals and owners of luxury assets.
According to him, it was unfair for high-income earners to pay nearly the same effective tax rates as average workers, adding that reforms should correct such imbalances to improve fairness and boost revenue generation.
He also called for the revival of civic responsibility in tax payment, noting that tax compliance was once regarded as a moral obligation before Nigeria became heavily dependent on oil revenues.
Other stakeholders at the conference stressed the importance of transparency, accountability and professionalism in implementing the ongoing reforms.
Chairman of the Presidential Committee on Tax Policy Implementation and incoming Minister of Power, Joseph Tegbe, described the reforms as the most ambitious restructuring of Nigeria’s tax system in decades.
Similarly, CITN President, Innocent Ohagwa, said the reforms reflected a collective commitment to building a stronger and more sustainable fiscal framework for the country.
