60% Executive Order For Direct Remittance Of Oil, Gas Revenues Will Boost Fiscal Justice’

The Capital Market Academics of Nigeria (CMAN) has commended President Bola Tinubu’s decision to restore 60 per cent of oil and gas proceeds to the Federation Account, describing it as a victory for fiscal justice, boosting revenues for all tiers of government.

The president of CMAN, Prof Uche Uwaleke, gave the commendation, Tinubu for this landmark initiative, which represents a pivotal reform during his administration and an important move towards enhancing fiscal transparency and fairness in revenue sharing.

He noted that “implementation of the Petroleum Industry Act (PIA) in 2021 led to a situation where only 40 per cent of these proceeds were shared among the federal, state, and local governments, while the Nigerian National Petroleum Company Limited (NNPCL) retained 60 per cent through the Frontier Exploration Fund and management fees. This disparity posed challenges to collective ownership of national resources. By addressing this issue, the President has taken a crucial step to ensure equitable benefits from the nation’s oil and gas wealth for all tiers of government.”

Uwaleke emphasised that as a limited liability company, NNPCL should prioritise generating its own revenue without relying extensively on public funds, making the President’s decision a proactive move in that direction.

While acknowledging this progress, CMAN encouraged continued reform, particularly in relation to Joint Venture (JV) assets, with the goal of bringing those proceeds into the Federation Account as well.

According to Uwaleke, this initiative is a positive development for the Federation Accounts Allocation Committee (FAAC) and an important stride towards achieving fiscal justice in Nigeria. It is expected to significantly enhance the revenue available to all levels of government, thereby improving their ability to provide essential services, stimulate economic activities, and strengthen the capital markets.

“CMAN fully supports this decision and urges all stakeholders to rally behind the President’s reform agenda. The organization remains dedicated to advocating for policies that promote transparency, accountability, and fairness in the stewardship of Nigeria’s resources.”

He highlighted the importance of including the Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) on the implementation committee for the Executive Order, ensuring that the processes are conducted with transparency and accountability.