NGF Endorses Direct Payment of Oil, Gas Proceeds into Federation Account

NGF Endorses Direct Payment of Oil, Gas Proceeds into Federation Accoun

 

The Nigeria Governors’ Forum (NGF) has expressed strong support for ongoing reforms requiring the direct remittance of oil and gas revenue entitlements into the Federation Account, describing the initiative as crucial for fiscal transparency, predictability, and adherence to constitutional provisions.

This position was outlined in a press statement issued on March 2, 2026, by Yunusa Tanko Abdullahi, Director of Media and Strategic Communications of the NGF.
The Forum acknowledged Executive Order 9, signed on February 13, 2026, by President Bola Tinubu, which aims to realign oil and gas revenue flows with constitutional guidelines while clarifying regulatory responsibilities within the petroleum industry.
According to the NGF, the Executive Order stipulates that government entitlements arising from production-sharing and related agreements—including royalty oil, tax oil, profit oil, and profit gas—must be paid directly into the Federation Account. It also reinforces clearer separation of regulatory roles within the sector.
Chairman of the Forum and Governor of Kwara State, AbdulRahman AbdulRazaq, emphasized that the stability and predictability of Federation Account inflows are fundamental to Nigeria’s fiscal federalism.
“The Federation Account remains the cornerstone of Nigeria’s intergovernmental fiscal framework. Clear structures governing the remittance of nationally owned resources enhance fiscal stability at all levels of government. Predictability strengthens planning, and effective planning enhances service delivery,” AbdulRazaq said.
The Forum noted that oil and gas revenues continue to account for a significant share of Nigeria’s distributable national income, directly influencing capital budgeting, debt management, infrastructure expansion, and public service provision at the federal, state, and local government levels.
It further referred to recent communiqués of the Federation Account Allocation Committee (FAAC), which highlighted gaps between gross revenue collections and the amounts eventually distributed. The NGF pointed out that it is the distributable figure that ultimately shapes the fiscal capacity of subnational governments.
The governors cautioned that when remittance procedures are overly complex or difficult to reconcile, fiscal predictability suffers, thereby disrupting capital planning cycles across all tiers of government.
With Nigeria’s population now estimated at over 220 million, the Forum stressed that states remain at the forefront of delivering essential services such as education, primary healthcare, infrastructure, and security. It maintained that consistent and predictable revenue inflows are critical to meeting these expanding obligations.
The NGF reaffirmed its commitment to continued collaboration with the Federal Government and relevant stakeholders to ensure that fiscal reforms produce measurable development benefits for Nigerians.