ADC Presidential candidate, Atiku Abubakar
A spokesman for former Vice President Atiku Abubakar, Paul Ibe, has questioned claims that Nigeria’s rising Federation Account Allocation Committee (FAAC) revenues show major economic improvement, arguing that the value of money should be measured by what it can actually buy.
Ibe, in a statement shared on Monday, said comparing today’s higher naira figures with previous allocations without considering inflation, exchange rates and purchasing power could give Nigerians a misleading picture of the economy.
Reacting to claims that monthly FAAC allocations have risen from about ₦300 billion before President Bola Ahmed Tinubu assumed office to more than ₦2 trillion under the current administration, Ibe described the argument as an “Animal Farm” style claim that focuses only on bigger numbers.
“The ‘Animal Farm’ styled claim that economic reforms have increased monthly FAAC allocations from about ₦300 billion to more than ₦2 trillion sounds impressive. But nominal figures alone do not tell Nigerians how much economic value that money actually represents,” Ibe said.
He argued that the key question Nigerians should ask is what the previous allocation could buy compared with what the current figure can purchase today.
According to him, ₦300 billion in May 2023, when the naira exchanged at about ₦464.51 to the dollar, was worth approximately $646 million.
He added that ₦2 trillion using an exchange rate of about ₦1,328 to the dollar represents about $1.5 billion, meaning the increase in dollar value is much smaller than the rise in naira terms.
“While ₦2 trillion is about 6.7 times ₦300 billion in nominal naira terms, its dollar value is only about 2.3 times as large,” he said.
Ibe also compared the value of the allocations using petrol prices, noting that the purchasing power difference becomes smaller when measured against essential commodities.
He referenced National Bureau of Statistics data showing that petrol sold at an average retail price of ₦238.11 per litre in May 2023.
“At that price, ₦300 billion could purchase approximately 1.26 billion litres,” he said.
The former vice president’s aide added that with petrol prices reaching about ₦1,400 per litre in some major cities, ₦2 trillion could buy approximately 1.43 billion litres.
“In other words, ₦2 trillion is nearly seven times ₦300 billion nominally, but on this petrol-purchasing-power measure it buys only about 13 per cent more,” he stated.
Ibe said economic assessments should go beyond revenue figures and focus on how increased government income affects citizens’ daily lives.
“That is why nominal revenue figures should be considered alongside purchasing power,” he added.
He asked the government and economic analysts to consider whether increased allocations have translated into better public services, improved infrastructure and higher living standards for Nigerians.
“The relevant economic questions are: What is the real value of the increased allocations? What goods and services can they purchase? And to what extent have higher revenues translated into improved public services, infrastructure and household living standards?” he said.
The statement comes amid continued debate over the impact of President Tinubu’s economic reforms, including changes in fuel subsidy policy, foreign exchange management and government revenue generation.
Supporters of the reforms have argued that improved government revenues have strengthened states’ financial capacity, while critics maintain that rising costs of living have reduced the benefits felt by ordinary Nigerians.
Ibe’s comments add to the wider national conversation on whether higher government earnings are translating into meaningful improvements in the lives of citizens.
