The Revenue Mobilisation Allocation and Fiscal Commission has expressed confidence that President Bola Tinubu’s newly signed Executive Order mandating the direct remittance of oil and gas revenues into the Federation Account will significantly curb revenue leakages and strengthen government earnings.
In a statement released on Friday, the Chairman of the Commission, Dr. Mohammed Shehu, described the directive as a decisive and transformative step toward improving transparency and accountability in the management of oil and gas revenues.
According to Shehu, the order—issued under Section 5 of the 1999 Constitution (as amended) and supported by Section 44(3), which vests control of mineral resources in the Federal Government for the collective benefit of Nigerians—aims to eliminate long-standing structural leakages and boost the revenue base of the federal, state, and local governments.
The Commission noted that prior to the directive, certain provisions within the Petroleum Industry Act allowed for multiple deductions from oil and gas revenues, including management fees, frontier exploration funds, and other charges. These deductions, it said, reduced the net remittances to the Federation Account and limited the fiscal capacity of the three tiers of government.
RMAFC stated that it had consistently pushed for a review of such statutory and regulatory frameworks that created room for revenue retention or leakages outside the Federation Account. It recalled that the issue was raised during its retreat held on February 9, 2026, in Enugu State, adding that the Executive Order has now addressed those concerns.
Describing the move as timely amid mounting fiscal pressures—ranging from security and infrastructure funding to education, healthcare, energy transition, and economic stabilisation—the Commission said the reform would enhance transparency, improve cash flow predictability, and strengthen fiscal federalism.
Shehu added that the order reinforces the constitutional framework governing revenue remittances by eliminating duplicative deductions and ensuring transparent payment of funds due to the Federation. He said this would also improve the Commission’s oversight responsibilities, particularly in monitoring revenue accruals and disbursements from the Federation Account as provided in the Constitution.
The Commission pledged its support for the Federal Government’s ongoing public financial management reforms and promised to collaborate with relevant agencies to ensure effective implementation of the directive.
Meanwhile, earlier reports indicate that the Executive Order could lead to an estimated N14.57tn increase in revenue allocations to the federal, state, and local governments. The projection, based on 2025 revenue data submitted to the Federation Account Allocation Committee, suggests that funds previously deducted—such as management fees and frontier exploration allocations will now be paid directly into the Federation Account.
Estimates show that the Nigerian National Petroleum Company is expected to remit about N906.91bn in management fees and frontier exploration funds, while oil and gas royalties totalling N7.55tn and gas flaring penalties amounting to N611.42bn, collected by the Nigerian Upstream Petroleum Regulatory Commission, will also be paid directly into the Federation Account under the new directive.
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