By George Omagbemi
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that increased federal allocations alone cannot guarantee prosperity for Nigeria’s states, urging governors to build productive economies and develop sustainable sources of internally generated revenue.
Oyedele made the remarks on Wednesday, August 19, 2026, at the 2026 National Council on Finance and Economic Development (NACOFED) conference in Owerri, Imo State.
He said Nigeria must move away from an “allocation-dependent economy” and focus more on production, investment and job creation.
According to the minister, monthly Federation Account allocations have risen significantly, from between ₦300 billion and ₦600 billion before 2023 to more than ₦2 trillion, following economic reforms including the removal of fuel subsidy and the unification of the foreign exchange market.
Oyedele said the reforms generated an estimated ₦15.8 trillion between June 2023 and December 2025, with ₦5.43 trillion accruing to the Federal Government, ₦6.52 trillion to states and ₦3.88 trillion to local governments.
However, he stressed that the ₦15.8 trillion should not be interpreted as cash sitting unused in government accounts.
He said the Federal Government recorded about ₦20.4 trillion in additional resources during the period but spent approximately ₦30.64 trillion on wages, debt servicing, infrastructure, electricity subsidies and other obligations.
Oyedele therefore argued that the subsidy savings primarily helped to reduce fiscal pressure and borrowing needs, rather than creating a large pool of disposable funds.
He called for stronger fiscal federalism, economic diversification and improved revenue generation at the state level.
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