Oil revenue overhaul: States endorse President Bola Tinubu’s Executive Order

The Chairman of the Forum of State Commissioners of Finance, Akintunde Oyebode, has said that President Bola Tinubu’s Executive Order 9 on the direct remittance of oil and gas revenues would add an estimated ₦1.5 trillion to the Federation Account, stressing that the real concern lies in enforcing constitutional provisions and addressing revenue leakages arising from the Petroleum Industry Act framework.

Oyebode, who also serves as Ekiti State Commissioner for Finance, made the remarks during an interview on Arise News on Tuesday.
He explained that the expected inflow from management fees, frontier exploration fees and gas flaring penalties was modest when viewed against the size of the Federation Account.

“In monetary terms, this is not a significant increase. We estimate that about ₦1.5 trillion will be added to the Federation Account,” he said, noting that with annual inflows exceeding ₦30 trillion, the impact would be in single digits. He emphasised, however, that the objective of the order was not revenue expansion but constitutional compliance.

Executive Order 9, signed in February 2026, requires that oil and gas revenues due to the Federation be paid directly into the Federation Account. It limits deductions by agencies and mandates that statutory revenues be remitted in full before any expenditure or appropriation.

The directive has sparked debate within the petroleum sector and opposition from labour unions, including the Petroleum and Natural Gas Senior Staff Association of Nigeria, which warned that the order could negatively affect the industry and investor confidence, urging the President to reconsider it.

Responding to suggestions that states would benefit financially from the new remittance structure, Oyebode rejected the idea of a windfall, insisting the issue was about proper custody and distribution of federation revenues as required by the Constitution. The Presidency has similarly maintained that EO9 is an enforcement of existing constitutional provisions, not an act of executive lawmaking.

Addressing concerns over possible executive overreach and its implications for lenders and investors, Oyebode declined to offer a legal opinion but said any disputes should be resolved through judicial interpretation.

“If there are legal concerns, the appropriate step is for the parties involved to seek clarification from the courts,” he said.
He added that investor reaction would depend on how the policy is implemented, noting that an implementation committee had been set up and urging stakeholders to await its guidelines. According to him, valid contracts and repayment obligations would not be affected.

Oyebode also argued that investment conditions in the oil and gas sector had improved, citing about $10 billion in new investments and several major project approvals as evidence of renewed momentum.

Beyond EO9, the discussion touched on broader concerns about state finances. Oyebode dismissed claims that the Federal Government was “giving” money to states, stating that funds in the Federation Account belong to the federation and are shared according to constitutional provisions.

He said many states had reduced their domestic debt by between 15 and 20 per cent over the past two years, explaining that increases in the naira value of foreign debt were largely due to exchange-rate movements.

On borrowing practices, he said states typically follow approved borrowing plans and that loans, particularly from multilateral institutions, are mainly used to fund infrastructure and development projects in areas such as water, agriculture and environmental programmes.

He also highlighted transparency reforms under the World Bank-supported State Fiscal Transparency, Accountability and Sustainability programme, noting that states now publish budgets, procurement data, budget performance reports and audited financial statements, while encouraging civil society and analysts to scrutinise public finances and hold governments accountable.