According to Vanguard reporting, President Bola Ahmed Tinubu has issued a landmark executive order mandating that all oil and gas revenues, including royalties and profit oil, be paid directly into the Federation Account. This move is designed to eliminate the long-standing practice of “dividend substitution” and ensure a more transparent distribution of national wealth among the three tiers of government.
Presidency sources suggest that this directive serves as the foundational step for a broader legislative overhaul. The administration is reportedly preparing a comprehensive amendment to the Petroleum Industry Act (PIA) to rectify structural and fiscal gaps that have hindered the sector’s efficiency since its enactment.
The shift toward a “fiscal reset” aims to strengthen Nigeria’s fiscal federalism by ensuring that states and local governments receive their rightful shares of mineral revenues promptly. This policy change is expected to significantly reduce the discretionary powers previously held by state-owned entities over petroleum proceeds.
The policy has gained traction across other platforms, with The Nation noting that “the executive order effectively ends the era of revenue withholding by agencies,” while Leadership quoted a finance expert saying, “this is the transparency the international community has been waiting for to reinvest in our energy sector.”
Echotitbits take: This is a bold move toward fiscal transparency that could end the perennial friction between the federal government and states over the sharing of oil proceeds. Watch for the upcoming PIA review, which will likely trigger intense debates in the National Assembly regarding the autonomy of the NNPCL.
Source: BusinessDay – https://businessday.ng/life/article/tinubus-oil-revenue-directive-set-to-deepen-fiscal-federalism-empower-states/, March 1, 2026
Photo credit: BusinessDay
