THE DISCOVERY of petroleum in Nigeria has had a paradoxical impact, often referred to as a “resource curse.” Despite being a major oil-producing nation, Nigeria struggles to utilise the revenue generated from oil to drive development and provide basic infrastructure.
The mismanagement of oil revenues and lack of transparency have led to significant financial losses, with trillions of naira disappearing without accountability. This has hindered the country’s progress and development.
Given the country’s track record of mismanaging oil revenue, concerns arise about its ability to effectively manage new revenue streams. The same individuals with a propensity for exploiting collective resources for personal gain seem to be at the helm, offering little hope for change.
Our public sector has always been a very fertile ground for instant wealth and criminal enrichment. From civil political leaders to military juntas and even civil servants, corruption and fiscal indiscipline are the common currency that binds all together.
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Corruption cuts across all spheres of our economic, political, social and religious life. Surprisingly, the oil sector, which generates most of the country’s revenue, and is expected to be properly guarded is unfortunately plagued by monumental corruption, despite expectations of stricter financial management. The sector is today the darkest area of the economy.
Determining the exact amount of money ‘missing’ in Nigeria’s oil sector since exploration began in 1958 and the establishment of NNPC in 1977 is challenging due to inconsistent audits and investigations, which have yielded varying figures.
The lack of transparency and disorganisation in the system has hindered efforts to accurately quantify the missing funds. Trillions of naira have disappeared without trace. While privileged individuals are growing fatter, the nation is going down at a fast speed.
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Despite Nigeria’s daily oil production of 1.7-1.8 million barrels, generating significant revenue, the government continues to borrow heavily. In fact, the current administration has borrowed more in two years than any previous government since independence.
Meanwhile, the daily savings from fuel subsidy removal, estimated at N22-41.6 billion, has not translated to improved living standards for Nigerians, raising concerns about resource management and allocation.
While oil wealth has driven economic growth and development in countries like Angola, Libya, Qatar, Iran, Iraq, and Saudi Arabia, Nigeria’s experience has been starkly different.
Despite being a major oil producer, Nigeria’s oil revenue has not translated to economic prosperity or functional infrastructure, largely due to corruption. Unlike other oil-producing nations, Nigeria’s lack of functional refineries exemplifies the country’s mismanagement of its oil resources.
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Nigeria’s vast oil and gas reserves hold promise, but benefits largely elude the majority, who suffer while a privileged few reap the rewards.
Our challenge isn’t a lack of wealth, but rather the unchecked greed of public officials who prioritise personal gain over public good. Without tackling corruption, the new tax regime will likely fail to yield expected revenue, and the government will be forced to seek alternative sources. The risk is that corruption will simply shift from one revenue stream to another, replicating the problems seen in the oil sector. Hopefully, the tax well cannot be deeper than the oil well.
Given the country’s track record of mismanaging oil revenue, concerns arise about its ability to effectively manage new revenue streams. The same individuals with a propensity for exploiting collective resources for personal gain seem to be at the helm, offering little hope for change.
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The Lagos State Government’s experience with expanding its tax network, has its own bitter story. Despite that, it was likely a factor in bringing in Babatunde Fowler to lead the Federal Inland Revenue Service (FIRS).
Given the corruption allegations during his tenure, it is concerning that the new tax regime may create more opportunities for corruption and economic mismanagement. It may also lead to the creation of many BETAs of both ALPHA and OMEGA. We cannot forget in a hurry the allegations against Alpha Beta Consulting by a former Managing Director of the firm, Oladapo Apara. It is paradoxical that a nation struggling to manage oil revenues is now tasked with managing tax proceeds, which may only serve to create a new class of economic elites.
Corruption is already entrenched in Nigeria’s Federal Inland Revenue Service (FIRS), with allegations of bribery, tax evasion, and financial misconduct. Given this context, expanding the tax net may only exacerbate corruption. It is unrealistic to expect the Federal Government to suddenly adopt fiscal discipline when corruption remains unchecked at the highest levels.
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With the January 2026 tax implementation looming, concerns are rising about potential tax evasion. Nigeria’s tax system faces challenges, as many elites and politicians don’t pay tax, and a significant portion of the population is unemployed or works in the informal sector, making it difficult to track and collect taxes from market women, petty traders, and others.
Our challenge isn’t a lack of wealth, but rather the unchecked greed of public officials who prioritise personal gain over public good. Without tackling corruption, the new tax regime will likely fail to yield expected revenue, and the government will be forced to seek alternative sources. The risk is that corruption will simply shift from one revenue stream to another, replicating the problems seen in the oil sector. Hopefully, the tax well cannot be deeper than the oil well.
