Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), M. B. Shehu, has commended President Bola Ahmed Tinubu, GCFR, for signing the Executive Order directing the direct remittance of oil and gas revenues to the Federation Account.
The Commission in a statement on Friday described the Executive Order as a bold, constitutionally grounded, and fiscally transformative intervention aimed at restoring transparency, eliminating revenue leakages, and strengthening the revenue base of the three tiers of government.
The Executive Order, signed pursuant to Section 5 of the Constitution of the Federal Republic of Nigeria (as amended) and anchored on Section 44(3) of the Constitution, reinforces the constitutional principle that ownership, control, and derivative rights in all minerals, mineral oils, and natural gas in Nigeria are vested in the Government of the Federation for the collective benefit of the Nigerian people.
The Commission noted that before this Executive Order, several structural and legal provisions within the Petroleum Industry Act (PIA) created channels through which substantial Federation revenues were subject to multiple deductions, including management fees, frontier exploration allocations, and other layered charges. These deductions significantly reduced net remittances to the Federation Account and constrained fiscal capacity across the federal, state, and local governments.
RMAFC wished to state that the Commission has consistently advocated the review of statutory and regulatory provisions that create opportunities for revenue leakage, erosion, or retention outside the Federation Account, as evidenced by the recent Retreat held on 9th of February, 20226 in Enugu State. The Executive Order has now decisively addressed these structural concerns.
The Commission considered this reform timely and necessary, particularly in light of the pressing fiscal demands facing the nation, including security, infrastructure, education, healthcare, the energy transition, and economic stabilisation.
“By freeing revenues previously subjected to layered deductions and fragmented oversight, the Executive Order enhances transparency, improves cash flow predictability, strengthens fiscal federalism, and restores the constitutional revenue rights of the Federal, State, and Local Governments”, it said.
The Chairman emphasised that this reform significantly enhances the Commission’s ability to discharge its constitutional mandate under Paragraph 32 of Part I of the Third Schedule to the Constitution, particularly in monitoring the accruals to and disbursement of revenue from the Federation Account.
“With this Executive Order, the constitutional architecture of revenue remittance is strengthened. It closes structural leakages, eliminates duplicative deductions, and ensures that revenues due to the Federation are remitted transparently. This directly supports the Commission’s oversight and monitoring responsibilities,” the Chairman stated.
RMAFC reiterated its full support for the Federal Government’s ongoing reforms aimed at strengthening public financial management, enhancing accountability, and repositioning Nigeria’s revenue system in line with global best practices.
The Commission remained committed to working collaboratively with all relevant institutions to ensure the effective implementation of this Executive Order and to safeguard the integrity of the Federation Account for the benefit of all Nigerians.