President Bola Tinubu has approved the involvement of the Economic and Financial Crimes Commission (EFCC) in monitoring allocations from the Federation Account Allocation Committee (FAAC) to Nigeria’s 36 states and 774 local government areas, in a move aimed at strengthening accountability in the management of public funds.
The proposed arrangement would place greater scrutiny on how subnational governments use monthly allocations from the federation account, which have increased following the removal of the petrol subsidy and foreign exchange reforms.
The development comes amid persistent concerns about whether rising government revenues are translating into better public services, infrastructure and improved living standards across the country.
Under the proposed framework, the EFCC would monitor the release and utilisation of FAAC allocations, with particular attention to suspected diversion of funds, questionable contracts, ghost workers and other financial irregularities.
The material announcing the approval said the commission would work with relevant federal institutions, including the Office of the Accountant-General of the Federation, the Ministry of Finance, the Central Bank of Nigeria and the Independent Corrupt Practices and Other Related Offences Commission.
The proposed measures include tracking allocations from source to destination, verifying projects reportedly financed with public funds, investigating citizens’ complaints about alleged misuse of allocations and publishing periodic compliance reports.
However, details of the operational framework, including its legal basis, scope and implementation timetable, were not provided in the material available to BusinessDay.
The reported decision comes as states and local governments receive substantial transfers from the federation account, increasing pressure on public officials to demonstrate how the funds are being spent.
Despite higher allocations, concerns persist about unpaid salaries and pensions, poor road infrastructure, inadequate healthcare facilities and the limited delivery of essential services in many communities.
The gap between revenue inflows and development outcomes has intensified calls for stronger financial controls and greater transparency in subnational public expenditure.
The document announcing the initiative said the objective was to ensure that allocations intended for development were used for the benefit of citizens rather than diverted or mismanaged.
“FAAC money is not free money. It is money for the people, and it must work for the people,” the statement said.
Tinubu’s administration has also backed greater financial autonomy for local governments following the Supreme Court’s July 2024 judgment affirming the constitutional right of local governments to receive their allocations directly from the Federation Account.
The judgment was intended to reduce state governments’ control over local government finances and strengthen the ability of councils to deliver services at the grassroots.
However, the effectiveness of direct allocations depends partly on transparent financial management, functioning local institutions and mechanisms that ensure public funds are spent on approved priorities.
The EFCC monitoring initiative would now extend the focus on accountability to the use of funds after disbursement, rather than concentrating solely on the release of allocations.
The commission has been directed to conduct its work professionally and without political bias, with officials found to have misappropriated public funds potentially facing investigation and prosecution under applicable laws.
“No one will be spared, irrespective of party affiliation,” the statement said.
The proposed framework is also expected to provide a channel for citizens to report suspected diversion or misuse of allocations, although the procedures for submitting complaints and the process for resolving them have not been detailed.
The Presidency is expected to provide further details on the reported initiative, including the monitoring arrangements and responsibilities of the participating agencies.
Onyinye Nwachukwu is the Abuja Bureau Chief of BusinessDay, overseeing coverage across Abuja and Northern Nigeria. With more than two decades of experience in economic and financial journalism, she reports on business, policy, and market trends, linking local developments to the global economy. A fellow of the International Monetary Fund (IMF) and recipient of the P. Vishwanathan Memorial Award for Excellence in Financial Journalism, she is known for her insightful storytelling and interviews with senior policymakers, diplomats, and business leaders. Well traveled and globally minded, Onyinye brings depth and international perspective to her reporting.
