• Super Admin
• 07 Mar, 2026

The Executive Order 9, signed by President Bola Ahmed Tinubu on February 13, 2026, may be considered one of the significant bold steps taken to deal with the perennial challenge of revenue leakages in the sector. But there is a caveat! Many pundits and millions of Nigerians are agitated by President Tinubu's unlimited urge to generate and direct revenues into a single basket at a time questions are being asked on what is being done with the monies. Some are even alluding that all the moves are meant to save a lot of money for campaigns ahead of 2027. While we don't want to join that school of thought, we are compelled to crave the indulgence of the government to explain what it did with the trillions of naira generated from different sources. In the last three years, budget performances have been dismal and the life of the citizens has not improved. Where is the money? Back to the issue of Executive Order 9, we were told that it is designed to overhaul Nigeria's oil and gas revenue framework by mandating the direct remittance of all petroleum proceeds into the Federation Account. It effectively bypasses previous retention mechanisms that allowed the Nigerian National Petroleum Company Limited (NNPCL) and other agencies to deduct significant fees before remitting funds to the common pool. The statement that announced the signing of the Executive Order referred to what it called the president's attempt to "safeguard and enhance oil and gas revenues for the Federation, curb wasteful spending, eliminate duplicative structures in this critical sector of the national economy and redirect resources for the benefit of the Nigerian people." The new law requires all oil and gas operators and contractors to pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas and other government entitlements directly into the Federation Account. It ends NNPCL's collection of the 30 per cent management fee on profit oil and gas revenues, and scraps the 30 per cent Frontier Exploration Fund (FEF) previously retained by NNPCL for inland basin exploration. Such funds must now be paid directly to the Federation. The new law also suspends the payment of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF), directing them instead to the Federation Account. It further mandates that revenue-generating agencies like the Nigeria Revenue Service (NRS) and Nigeria Customs Service remit all collections without deducting "cost of collection" fees. The Executive Order further establishes a high-level committee chaired by the minister of finance to oversee the transition and ensure compliance. The Executive Order was a deliberate response to the confusion created about remittances by the NNPCL to the Federation Account since the implementation of the Petroleum Industry Act (PIA) in 2021. Contrary to expectations that the PIA would boost revenues and eliminate leakages, the regime led to a drastic and shocking reduction that set the Nigerian Governors Forum (NGF), the Nigeria Extractive Industries Transparency Initiative (NEITI) and civil society organisations in the extractive sector on war path with the NNPCL. For instance, section 64(c) of the PIA assigns the NNPCL the responsibility to lift and sell oil, with a management fee of 30 per cent and FEF. The lack of clarity as to whether the 30 per cent applies to both management fee and FEF, or whether it was 30 per cent for each line item, has led the NNPCL deducting 60 per cent (30 per cent management fee and another 30 per cent FEF) from oil revenue since August 2022. By implication, the NNPCL has been taking 60 per cent of oil revenues and paid only 40 per cent to the Federation Account. The foregoing has several implications for the Federation. For example, the Federation received $11.9 billion from Joint Venture sales in 2021, but received only $1.8 billion in 2023. Also, Federation's entitlement from crude oil sales dropped from 74.43 per cent in 2021 to 14.14 per cent in 2023, while the NNPCL's revenue contribution to the Federation reduced from eight streams in 2021 to three in 2023, totaling $5.01 billion. Meanwhile, the oil company paid dividends of only $1.13 billion in 2023, which was considered very low, compared to the revenue it generated. Also, despite high production of oil in 2023, Federation's share of Joint Venture crude oil revenue fell by 79 per cent, a shortfall attributed to the implementation of the PIA. Although the Executive Order 9 has been hailed as a step towards reducing the NNPCL's burgeoning purse and opaque book-keeping that have always been suspect, stakeholders have raised concern about its impact on the sector. The NGF expressed strong support, describing the order as a vital reform to strengthen fiscal transparency and constitutional alignment. The governors anticipate a significant increase in monthly FAAC allocations. But we challenge them to also look inwards. Since the removal of fuel subsidy in 2023, the three tiers of government have had their monthly allocations tripled, but there is no commensurate provision of social services to the people. Unless they assess themselves truthfully, additional revenues to them will be additional bazaar for needless spending with less attention to the needs of the masses. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has already rejected the directive, arguing that it contradicts the PIA and could jeopardise roughly 4,000 jobs and investor confidence. The labour union called for urgent stakeholder engagement to clarify the implications of EO9 for oil workers. Of course, NEITI hailed the presidential order as a "bold step" toward improving financial accountability. In order to have a middle ground, we encourage the federal government to sponsor an executive bill to the National Assembly for an amendment of the controversial sections of the PIA. This measure alone will guarantee that the presidential directive is not exposed to political vagaries. In its nature, an Executive Order allows the president to bypass the National Assembly for swift policy action, but it carries significant drawbacks: it can be overturned by courts or future administrations. This makes it less stable and less democratic, compared to laws passed through the legislative process. Furthermore, we call on the federal government to come up with a template on how the additional funds that will dovetail the EO9 should be utilised by states and local governments. Source: https://dailytrust.com/how-to-apply-windfall-from-executive-order-9/