A former President of the Nigerian Bar Association, Olisa Agbakoba, has raised concerns over what he described as a deepening financial crisis in Nigeria’s Federation Account.

Agbakoba stated that massive revenue deductions and under-remittances are weakening the nation’s economy.

In a post shared on X on Wednesday, the senior lawyer said many Nigerians were unaware of the importance of the Federation Account established under Section 162 of the 1999 Constitution to collect and distribute revenues among the federal, state and local governments.

According to him, the account, which he described as “the financial heartbeat” of the country, is facing severe challenges due to alleged revenue leakages and mounting debt obligations.

Agbakoba wrote: “Most Nigerians are unaware that the country has a vital financial institution known as the Federation Account. Created under Section 162 of the 1999 Constitution, this account is designed to collect and store every kobo of revenue generated by the federal government. From there, these funds are shared among federal, state, and local governments.

In essence, the Federation Account serves as the financial heartbeat of our nation. However, it is facing severe challenges.

“Consider these striking figures: In 2025, a staggering N14.94 trillion – almost 40% of the federation’s total revenues – was deducted before reaching the Federation Account.

“The Nigerian National Petroleum Company Limited (NNPCL) withheld N500 billion of the N1.1 trillion that was due in 2024.

A current FAAC investigation is delving into allegations of $42.37 billion in under-remittances that occurred between 2011 and 2017.

“Debt service accounted for an alarming 69% of federal revenue last year, significantly exceeding the IMF’s recommended safe benchmark of 30-40%.

“Our total public debt has now ballooned to N159.27 trillion.

In essence, we are borrowing against funds that we have already earned because that revenue never reaches the Federation Account.

“To address this urgent situation, I have crafted a policy reform proposal for the President @officialABAT to enhance Executive Order 9. This step is crucial for ensuring the financial integrity of our federation.

“Let’s engage in meaningful dialogue about how we can restore the heartbeat of our nation’s finances.”