Following the steady decline in oil prices, we deem it fit to revise this report as the arguments herein still remain germane to the need for Nigeria to urgently address its dependence on oil revenues. This report was originally released in December 2010, following the approval for an increase in Nigeria’s minimum wage and its consequences on public sector finances, especially for the federating states. While the arguments for and against Nigeria’s debt profile continue, we believe the assessment, viability and sustainability of the current model of funding Nigeria’s federating states remains largely ignored. In our opinion, this is fundamental to Nigeria’s ability to achieve and sustain economic growth and development in the long run. At present, states receive a substantial portion of their income – average of c. N3.8 billion as of June 2014 – from the Federation Account Allocation Committee (FAAC), which is the body responsible for […]