Abuja: The Capital Market Academics of Nigeria (CMAN) has expressed approval of President Bola Tinubu’s Executive Order mandating the direct remittance of oil and gas revenue to the Federation Account. Prof. Uche Uwaleke, the President of CMAN, made this commendation in a statement, highlighting the significance of this reform.
According to News Agency of Nigeria, Uwaleke emphasized that this decision marks a pivotal reform in Tinubu’s administration, aimed at bolstering fiscal transparency and ensuring equitable distribution of revenue among all tiers of government. He stated that the initiative represents a triumph for the Federation Accounts Allocation Committee and promotes fiscal justice within the country.
Uwaleke remarked that the reform would significantly increase the revenues accessible to all levels of government, thereby enhancing their ability to provide services, stimulate economic activities, and boost the capital markets. He noted that since the implementation of the Petroleum Industry Act (PIA) in 2021, only 40 percent of the proceeds were allocated to the Federation Account, with the Nigerian National Petroleum Company Ltd. (NNPCL) retaining 60 percent through various funds and fees.
By correcting this imbalance, Uwaleke argued that President Tinubu has ensured equitable benefits from the nation’s oil and gas wealth for all government tiers. He also suggested that the reform should continue, especially concerning the Joint Venture assets, which should also be remitted to the Federation Account.
Uwaleke urged stakeholders to support the President’s reform agenda, emphasizing CMAN’s commitment to advocating policies that enhance transparency, accountability, and fairness in resource management. He also highlighted the importance of involving the Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission in overseeing the Order’s implementation to ensure transparency and accountability.
The News Agency of Nigeria reports that President Tinubu issued the Executive Order on February 18 to safeguard and enhance revenues, reduce wasteful spending, and eliminate redundant structures in the sector. The directive aims to restore the constitutional revenue entitlements of the three tiers of government that were altered by the 2021 Petroleum Industry Act.
The President’s statement, issued by his Spokesperson, Mr. Bayo Onanuga, detailed how the PIA had created channels through which substantial revenues were lost due to deductions, charges, and fees. Under the current framework, NNPC Ltd. retains a portion of oil revenues as management fees and for covering working capital and future investments.
Tinubu emphasized the urgency of these reforms, considering their impact on national budgeting, debt sustainability, and economic stability. He also mentioned plans for a comprehensive review of the PIA in consultation with stakeholders.