The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has thrown its weight behind President Bola Tinubu’s recent executive order mandating the direct remittance of oil and gas revenues into the Federation Account.
In a statement issued Friday, RMAFC Chairman Dr Mohammed Shehu described the directive as a bold and constitutionally grounded intervention that will restore transparency, eliminate leakages, and strengthen the revenue base of federal, state, and local governments.
“This is a fiscally transformative intervention aimed at restoring transparency, eliminating revenue leakages, and strengthening the revenue base of the three tiers of government,” Shehu said.
The commission noted that provisions in the Petroleum Industry Act (PIA) had previously allowed deductions—such as management fees, frontier exploration allocations, and other charges—that significantly reduced net remittances to the Federation Account.
RMAFC said it had long advocated for reforms to close these loopholes, citing discussions at a recent retreat in Enugu where concerns about revenue erosion were raised.
Fiscal Impact
According to the commission, the executive order will:
- Free revenues previously subjected to multiple deductions.
- Enhance transparency and predictability of cash flows.
- Strengthen fiscal federalism by ensuring all tiers of government benefit equitably.
The commission stressed that the reform was timely given Nigeria’s fiscal pressures, including funding needs for security, infrastructure, education, healthcare, and energy transition.
RMAFC said the order would bolster its constitutional mandate to monitor accruals and disbursements from the Federation Account, pledging to work with relevant institutions to ensure effective implementation.
Earlier reports indicated that federal, state, and local governments could receive an additional ₦14.57 trillion in allocations following the directive, based on 2025 revenue inflows.
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