ON February 18, 2026, President Bola Tinubu stirred up another hornet’s nest in the management of the Nigerian economy with an Executive Order mandating direct remittance of oil and gas revenues to the Federation Account.
The Executive Order, which significantly clipped the ‘broad’ wings of the Nigerian National Petroleum Company Limited, set aside key provisions of the Petroleum Industry Act 2021 in a landmark decision that could eventually be positive or negative depending on implementation, executive discipline and sincerity of purpose.
The Special Adviser to the President on Information and Strategy, Mr Bayo Onanuga, said the order was to safeguard and enhance oil and gas revenues for the Federation, curb wasteful spending, eliminate duplicative structures and redirect resources for the benefit of the Nigerian people.
This bold move, which the Presidency said was anchored on Section 44(3) of the Constitution, was communicated amid criticism trailing what many have termed ridiculously poor implementation of capital expenditure planned for key sectors of the Nigerian economy in the 2024/2025 budgets.
Section 44(3) of the Nigerian Constitution, according to Onanuga, “vests ownership, control, and derivative rights in all minerals, mineral oils, and natural gas in, under, and upon any land in Nigeria, including its territorial waters and exclusive economic zone, in the government of the federation.”
Although many informed Nigerians already know the details of the EO, it is important to highlight the key alterations to the PIA as announced by the presidential spokesperson.
“According to the Presidential Executive Order, which has been officially gazetted, NNPC Limited will no longer collect and manage the 30 per cent Frontier Exploration Fund. NNPC Limited will ensure that the 30 per cent profit from oil and gas from production sharing, profit sharing, and risk service contracts, currently earmarked for the frontier exploration fund, is henceforth transferred to the federation account.
“NNPC Limited will also no longer be entitled to the 30 per cent management fee on profit oil and profit gas revenues that should go to the federation account. In the same vein, all operators/contractors of oil and gas assets, held under a production sharing contract shall, from the date of the Executive Order, which is February 13, 2026, pay royalty oil, tax oil, profit oil, profit gas, and any other interest howsoever described, which is due to the Government of the Federation, directly to the federation account.
“President Tinubu has also suspended payments of the gas flare penalty into the Midstream and Downstream Gas Infrastructure Fund. The commission shall, from the date of the Executive Order, pay proceeds from all penalties imposed on operators for flaring gas into the federation account and cease payment of such proceeds into the Midstream and Downstream Gas Infrastructure Fund,” Onanuga said.
The President’s objective of eliminating “unjustified multiple layers of deductions” that erode revenues, which ought to accrue to the federation account and enable the three tiers of government to pursue critical national priorities, is commendable, considering the decades of rot that had given successive managers the liver to unapologetically milk Nigeria’s primary “cash cow” for personal enrichment at the expensive of the desired economic wellbeing of the country and its citizens.
Some of us are sufficiently close to those who had been saddled with the management of Nigeria’s fiscal and monetary policies in the past to appreciate the reality of the leakages being confirmed by the Presidency.
Present and past top players in the oil and gas industry also agree that under the previous structure, the group chief executive officer of the NNPC wielded enormous influence and could, to a large extent, determine Nigeria’s fiscal direction depending on how and when funds were released to the federation account after cost deductions. There have also been stories of delayed remittance of funds that created room for huge interests, shared monthly, by economic buccaneers who were feeding fat on collective wealth.
The most frustrating aspect of the anomalies surrounding the operations of the NNPC, aside from the cost deduction framework that created room for opacity, and in some instances masked what was due to the Federal Government under “operating expenses”, was that the organisation’s massive political influence made it very difficult to hold top officials accountable. One cannot forget in a hurry how some radicals in government who, in the past, tried to expose the theft going on in that organisation got their fingers burnt in the process.
These arguments should not, however, trash the position of the Petroleum and Natural Gas Senior Staff Association of Nigeria that the Executive Order is a dangerous precedent that could undermine the Petroleum Industry Act, erode investor confidence in the sector, and lead to massive job losses.
PENGASSAN President, Festus Osifo, who called for the withdrawal of the order a day after it was announced, said what the President had done was to use an Executive Order to set aside a law of the Federal Republic of Nigeria. He also described as misleading the notion that NNPC Limited was retaining up to 60 per cent of revenue in total. These are reasonable observations.
Nevertheless, while debates are ongoing on whether or not an Executive Order can restore what the Presidency described as the constitutional revenue entitlements of the federal, state, and local governments, which were removed by a law of the Federal Republic of Nigeria, apologists have said that it was the first step in the long-demanded review of the PIA 2021. But the question is: Will this latest arrangement produce any significant difference other than transfer the soup pot from the old cabals to some “new sheriffs”?
As optimistic as I am about the latest development, I am sceptical about its real impact on the Nigerian economy and the welfare of citizens if established leakages are not also blocked at the federal, state and local government levels.
Those in government have linked poor budget performance, which has impacted negatively on activities in the critical sectors of the economy, to a paucity of funds. But I would say the problem, over the years, has not been paucity of funds but a lack of patriotic leadership, especially at the state level, where governors, who have pocketed the state assemblies, spend public money with impunity and without accountability.
If all the state governors, except for a very few, have to show for allocations that have more than tripled, since the removal of fuel subsidy by the current administration, are renovated mushroom schools and health facilities that they don’t believe in, among other preposterous achievements, there is no assurance that any increased allocation will not be kept for re-election or “life after office” in the case of the outgoing ones.
At this stage of Nigeria’s democracy, leaders must think outside the box if the nation’s resources are to be redirected for maximum efficiency. Putting a notorious robber in handcuffs during a night raid while inadvertently ushering in a more daring set of robbers through the back door would only pave the way for a prolonged robbery incident with higher casualties!
- Dr Kolapo is publisher of The Point and her column, Compass, runs on the back page of the Punch newspaper on Monday. The column appears on News Point Nigeria newspaper on Tuesday.