Nigeria announced a major fiscal restructuring with the implementation of Executive Order 9, signed by President Bola Ahmed Tinubu, which redirects all oil and gas revenues directly to the Federation Account. This measure seeks to correct distortions that for years have depleted national revenues through prior deductions and overlapping charges.
A change in the way oil money is managed
Until now, revenues derived from royalties, taxes and oil benefits were subject to multiple deductions before entering the national common fund, which affected not only the federal government, but also the states and municipalities, which receive a proportional share of that account. With the new provision, the additional 30% management fee and the equivalent Border Exploration deduction are eliminated, increasing the money available for national projects.
The measure also transforms the role of the Nigerian National Petroleum Company Limited (NNPC Limited), which will operate solely as a trading company. It will no longer be able to apply deductions or act as a collection authority, in compliance with the law governing its operation.
Legal review underway
Tinubu also announced the creation of an Implementation Committee to oversee full compliance with this policy. In addition, his administration will initiate a comprehensive review of the Petroleum Industry Act (PIA), with the aim of correcting structural and fiscal anomalies that have weakened the country’s revenues.
The reform aims not only at revenue efficiency, but also at ensuring that every naira derived from oil benefits the population, in line with national objectives such as improving security, expanding education, strengthening the health system and advancing the energy transition. energy transition.
Market support and fiscal vision
From the financial sector, capital market experts supported the President’s decision, calling it a necessary move to restore the credibility of the fiscal system and improve the confidence of local and international investors. The measure is seen as a step to close fiscal gaps and reduce dependence on loans to finance the national budget.
Source: X
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