The Capital Market Academics of Nigeria (CMAN) commends President Bola Ahmed Tinubu for his bold and historic decision to restore 60% of the proceeds from profit oil and gas under Production Sharing Contracts (PSCs) back to the Federation Account. This marks one of the most courageous reforms of his administration and a decisive step toward strengthening fiscal transparency and equity in revenue distribution.
Since 2021, when the Petroleum Industry Act (PIA) was implemented, the Federation Account shared by the Federal, State, and Local Governments, received only 40% of these proceeds, while the Nigerian National Petroleum Company Limited (NNPCL) retained 60% through the Frontier Exploration Fund (30%) under their expenditure oversight and a management fee of 30%. This imbalance undermined the principle of collective ownership of national resources. By correcting this anomaly, the President has ensured that all tiers of government benefit equitably from the nation’s oil and gas wealth.
CMAN further notes that as a limited liability company, NNPCL must operate independently on its own revenues rather than relying on public funds. The President’s decision is a bold move in this direction. However, CMAN emphasizes that the reform process should continue, particularly with regard to Joint Venture (JV) assets, which should also be returned to the Federation Account.
This development is a victory for the Federation Accounts Allocation Committee (FAAC) and for fiscal justice in Nigeria. It will significantly boost revenues available to all tiers of government, thereby enhancing their capacity to deliver services to the people, generate economic activities, and boost the capital markets.
CMAN stands firmly behind this decision and calls on all stakeholders to support the President’s reform agenda. We remain committed to advocating for policies that strengthen transparency, accountability, and fairness in the management of Nigeria’s resources.
CMAN also underscores the importance of including the Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) on the Committee overseeing the implementation of the Executive Order, to ensure transparency and accountability.