The Federal Government has approved plans to slash the percentage of revenue that key government agencies are allowed to retain, in a bid to boost national savings and free up funds for economic growth.

The decision was taken at Wednesday’s Federal Executive Council (FEC) meeting, chaired by President Bola Ahmed Tinubu at the Presidential Villa, Abuja.

According to the Minister of Finance, Wale Edun, the review aims to curb wasteful spending, strengthen fiscal discipline, and channel more resources toward development projects.

The affected revenue-generating agencies include:

Nigerian National Petroleum Company Limited (NNPCL)

Federal Inland Revenue Service (FIRS)

Nigeria Customs Service (NCS)

Nigerian Upstream Petroleum Regulatory Commission (NUPRC)

Nigerian Maritime Administration and Safety Agency (NIMASA)

President Tinubu specifically called for a reassessment of NNPC’s 30% management fee and 30% frontier exploration deduction provided under the Petroleum Industry Act (PIA), suggesting these allocations be reduced to improve federal revenue inflows.

This policy shift follows the government’s recent directive barring ministries, departments, and agencies from issuing capital contracts without proper authority to incur expenditure.

The move also comes against the backdrop of complaints from contractors over delayed payments, an issue highlighted last year by Senator Abdul Ahmed Ningi.

By cutting retention rates and improving oversight, the government hopes to unlock more funds for critical infrastructure, public services, and economic reforms.