Tinubu Executive Order Mandates Direct Oil Revenue Remittance

Nigeria’s Minister of State for Finance, Dr. Doris Uzoka-Anite, and the Chairman of the Federation Account Allocation Committee (FAAC) have commended President Bola Tinubu’s recent executive order mandating the direct remittance of certain oil and gas sector revenues to the Federation Account. The officials described the order as a critical step toward safeguarding national petroleum revenues and restoring constitutional discipline in their management.

Speaking to FAAC members in Abuja, the minister explained that the executive order, signed on February 13, suspends the 30 per cent allocation to the Frontier Exploration Fund (FEF) and the 30 per cent management fee previously payable to NNPC Limited. It also directs that gas flare penalties be paid into the Federation Account and mandates the full remittance of petroleum revenues without unconstitutional deductions. This marks a policy shift from a retention-based model to a gross remittance, “federation-first” approach.

The minister projected that the order would significantly increase monthly gross inflows into the Federation Account, thereby boosting distributions to Nigeria’s federal, state, and local governments. She noted that gas flare penalties will now become distributable revenue, and previously retained management fees will no longer reduce remittable inflows. Additionally, a retrospective audit of the FEF and Midstream/Downstream Gas Infrastructure could yield recoveries, potentially providing a one-off fiscal boost.

However, Uzoka-Anite cautioned that sudden, large liquidity injections from increased revenues pose macroeconomic risks, including inflationary pressures, exchange rate stress, and asset price distortions. To mitigate these, she proposed a phased disbursement of any one-off recoveries, staggering injections rather than releasing them in bulk. She recommended temporarily warehousoing a portion in a stabilisation buffer and strengthening the excess crude and stabilisation fund mechanism to create a fiscal stabilisation window. Enhanced coordination with the Central Bank of Nigeria (CBN) was also urged to align fiscal injections with monetary management tools.

The minister stressed that increased revenues must not lead to fiscal complacency. She urged government ministries, departments, and agencies (MDAs), particularly at state and federal levels, to prioritise capital expenditure in infrastructure, agriculture, and energy over recurrent spending or unsustainable wage increases. “Productive spending expands supply capacity and mitigates inflation,” she stated.

To enhance transparency, the government plans to introduce monthly revenue transparency dashboards and production-to-remittance reconciliation reports, clearly detailing incremental inflows from both the executive order and ongoing tax reforms. Uzoka-Anite framed the reforms as an opportunity to deepen fiscal federalism, enhance distributable revenue, and rebuild trust among government tiers, while emphasising the need for prudent debt management, arrears clearance, and buffer accumulation.

The executive order is positioned as a core component of broader structural reforms aimed at broadening the tax base, improving compliance, and enhancing administrative efficiency—factors already contributing to an improved revenue outlook. The FAAC’s operations are expected to undergo significant adjustment as these changes take effect, with long-term implications for Nigeria’s intergovernmental fiscal relations.