The Minister of State for Finance and Chairman of the Federation Account Allocation Committee (FAAC), Doris Uzoka-Anite, has urged the three tiers of government to exercise fiscal discipline amid anticipated increases in federation account revenues.
Speaking at a FAAC meeting, the minister cautioned that sudden liquidity injections into the economy could trigger inflationary pressures and destabilise macroeconomic gains if not carefully managed.
Her remarks come against the backdrop of the recently signed Presidential Executive Order to safeguard federation oil and gas revenues and provide regulatory clarity 2026, as well as the implementation of new tax laws.
Uzoka-Anite explained that the reforms are expected to drive higher monthly gross inflows into the Federation Account, boost allocations to federal, state and local governments, and increase derivation transfers to oil-producing states.
She added that a retrospective audit of relevant funds could also result in one-off recoveries, providing an additional fiscal boost.
However, she warned that without prudent management, the inflows could fuel inflation, heighten exchange rate volatility and worsen excess aggregate demand.
To mitigate the risks, the minister proposed a phased disbursement of any one-off recoveries, strengthening of the Excess Crude and Stabilisation Buffer mechanisms, and closer coordination with the Central Bank of Nigeria.
She also called on governments to prioritise capital expenditure over recurrent spending.
Uzoka-Anite further urged federal, state and local governments to channel incremental revenues into debt reduction, clearance of arrears, rebuilding fiscal buffers and investment in growth-enhancing sectors.
She warned against treating higher allocations as permanent windfalls, stressing that fiscal prudence remains critical to sustaining economic stability.
