Tinubu: Growing The Federation Account

NNPC Ltd. remitted N14.6 trillion to the federation account in 2025, N10 trillion in 2024, and about N4.5 trillion from January to September of 2023. In 2022, there were no remittances due to subsidy payments, even though the company reported a profit of N2.5 trillion.

The removal of the subsidy has loosened up trillions of naira for the federation account, which is shared by the three tiers of government. Since the removal, close to 2 trillion is shared each month by federal, state, and local governments. Before President Bola Ahmed Tinubu removed the subsidy in 2023, the naira was at about N800 to a dollar. This was consolidated by the elimination of a dual exchange rate, and the twin reforms took the dollar up to about N1900 to one dollar.

The rate has crept back to about N1350, and manufacturers and industrial experts like Aliko Dangote, and govt officials, including the Vice-President, Sen. Kashim Shettima, have all predicted a fall in the dollar or a rise in the value of the naira to about N1,000 to $1. The CBN has had to mop up excess dollar liquidity in the market to maintain a balance and a steady rise in the value of the naira. The Petroleum Industry Act, PIA 2021, the removal of subsidy and the elimination of dual or arbitrary exchange rates were tumultuous for a third-world country in the short term, but have yielded unbelievable results in the mid-term, and look even brighter in the next year or two.

Is the naira truly gaining value? It is regaining its true value as the economy is experiencing real growth. The Federal Govt is not “profusely” defending the naira, and neither is it “ways and meansing it”! It is organically growing it, hence the naira’s renewed growth. Our GDP is growing fast, at a little over 4% in 2025, with better prospects in 2026 and beyond. For the 1st time, global economic experts forecast that the African economy will outpace Asia, with Nigeria set to climb to the 3rd-largest African economy, ahead of Algeria. With a growth rate of 4.4%, faster than the global average of 3.1%, Nigeria’s GDP is rising to about $334 billion. Finance Educator and Analyst Toby of the Tomola group says the world is focusing on Africa, and only Africans don’t see it. The CBN says Nigeria’s foreign reserves are now put at $50 billion, following a recent surge of about 4.93%.

The Nigerian stock market is not doing so badly, either, with the capital market contribution to GDP rising to 33%. This is estimated at N123 trillion. With this development, the Nigerian stock market is officially the best-performing market in Africa at the moment, and the naira is the 2nd-best-performing currency this year. Nigeria is no longer playing catch-up, but is fast becoming a global leader. We are ranked 6th among the top contributors to global real GDP growth. Our economic reforms are real and organic, with a positive global outlook.

Notwithstanding this positive global outlook, we have not yet reached the status of a non-oil-dependent economy. NNPC Ltd remains a cash cow for the federation. While the PIA 2021 has put so many issues into perspective and have streamlined the activities of the old oil behemoth NNPC into a new global oil company with various subsidiaries to regulate and maintain the industry, it is not to say that it is a perfect Act that cannot be amended or improved for enhanced productivity and global competitiveness – all this while advancing transparency in its operations.

President Bola Ahmed Tinubu, in another bold reform initiative, issued an Executive Order to safeguard oil and gas revenues and enhance regulatory clarity. The order primarily suspends the collection of management fees by the NNPC and frontier exploration fees. It also directs that taxes, royalties, and profits under production-sharing contracts be paid to the appropriate fiscal authorities. It also clarifies the delineation of responsibilities between the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, and the Nigeria Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, providing greater regulatory certainty for operators and investors. This, Mr President said, was necessary to address the continued decline in oil and gas revenue inflows into the federation account. This is Mr President putting on his chartered accountant hat in an industry he has loads of experience in, as Senior Auditor, Audit Manager and Treasurer of Exxonmobil; needless to say, a giant global oil company.

The public space has become rancorous, and the owners of the leaks Mr President is trying to plug have started playing the cabal’s cards once again. They obviously control the 30% management fees retained by NNPCL and the 30% frontier fees as stipulated in the PIA of 2021. It is envisaged that these funds of the NNPCL and others will be paid directly to the federation account. It is estimated to be between N1.5 trillion and N15 trillion, depending on which revenue streams are eventually paid directly into the federation account. This will be additional revenue for the three tiers of government. The lead arguments against Mr President’s EO9 of 2026 have been about the future of frontier fields exploration fees.

But what really are the successes recorded since the provision of those fees? How transparently have they been applied? Are they being recouped from the fields already after all these years? Exploration is big business, but come on, technology continues to provide more innovative ways in the search and development of oil fields. It may be another apparatus for cabals and phantom oil searches that can go on for years. Possibly an exploitation instead of exploration. Those funds are safer in the federation account, where all can see and understand what goes where and who holds what. There is currently a forensic audit of the NNPCL accounts, which comes not long after a staggering statement by the National Assembly about hundreds of trillions of naira that remain unremitted from the NNPCL. Mr President has done away with the fraudulent subsidy regime and the attendant loss of forex to fuel imports. He is now looking at the proper management of the revenues the NNPCL generates on behalf of the federation. The more trillions can be recovered from NNPCL and remitted to the federation account, the better for Nigerians.