The Capital Market Academics of Nigeria (CMAN) has commended President Bola Ahmed Tinubu for issuing an Executive Order directing the restoration of 60 per cent of proceeds from profit oil and gas under Production Sharing Contracts (PSCs) to the Federation Account.
In a press statement signed by its President, Prof. Uche Uwaleke, the group described the move as “bold and historic,” noting that it represents one of the most courageous reforms of the current administration and a decisive step toward strengthening fiscal transparency and equity in revenue distribution.
CMAN explained that since the implementation of the Petroleum Industry Act (PIA) in 2021, only 40 per cent of proceeds from profit oil and gas under PSCs had been remitted to the Federation Account for sharing among the federal, state and local governments. The remaining 60 per cent, it said, was retained by the Nigerian National Petroleum Company Limited (NNPCL), with 30 per cent allocated to the Frontier Exploration Fund under its expenditure oversight and another 30 per cent as management fees.
According to the academics, the arrangement created an imbalance that undermined the principle of collective ownership of Nigeria’s natural resources. By reversing the formula and restoring 60 per cent to the Federation Account, CMAN said the President has corrected what it described as an anomaly and ensured that all tiers of government benefit more equitably from the nation’s oil and gas wealth.The group further argued that as a limited liability company, NNPCL is expected to operate independently and fund its operations from its own revenues rather than rely on public funds. It described the Executive Order as a significant step in that direction.
However, CMAN maintained that further reforms are necessary. It called for Joint Venture (JV) assets to also be returned to the Federation Account to deepen transparency and accountability in the management of oil and gas revenues.
Describing the development as a victory for the Federation Accounts Allocation Committee (FAAC) and for fiscal justice in Nigeria, the group said the decision would significantly boost revenues available to the three tiers of government. It added that increased allocations would enhance the capacity of governments to deliver public services, stimulate economic activity and strengthen the capital market.
CMAN also urged the inclusion of the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) on the committee overseeing the implementation of the Executive Order to guarantee transparency and accountability.
The academics pledged continued support for policies aimed at promoting fairness, transparency and prudent management of Nigeria’s resources, while calling on stakeholders to rally behind the President’s reform agenda.