The Capital Market Academics of Nigeria (CMAN) has thrown its weight behind President Bola Ahmed Tinubu’s Executive Order mandating the direct remittance of oil and gas revenues to the Federation Account, describing the move as a historic correction of fiscal imbalances and a major boost for transparency, equity and capital market development.

In a statement signed by its President, Uche Uwaleke, the group commended the President for what it termed a “bold and courageous” reform that restores 60 per cent of profit oil and gas proceeds under Production Sharing Contracts (PSCs) to the Federation Account.

According to CMAN, since the implementation of the Petroleum Industry Act in 2021, only 40 per cent of such proceeds had accrued to the Federation Account shared by the Federal, State and Local Governments, while the Nigerian National Petroleum Company Limited retained 60 per cent through a combination of management fees and the Frontier Exploration Fund.

The academics argued that the imbalance undermined the principle of collective ownership of Nigeria’s natural resources and constrained the fiscal capacity of subnational governments. By reversing the structure, they said, the Executive Order would significantly raise distributable revenues, enhance public service delivery and stimulate economic activity across the tiers of government.

The Executive Order, signed on February 13, 2026 and gazetted by the Presidency, eliminates the 30 per cent management fee previously retained by NNPC Limited on Profit Oil and Profit Gas under Production Sharing, Profit Sharing and Risk Service Contracts. It also ends the 30 per cent allocation of profit oil and gas to the Frontier Exploration Fund and mandates that Royalty Oil, Tax Oil, Profit Oil, Profit Gas and other government entitlements be paid directly into the Federation Account.

In addition, proceeds from gas flare penalties, previously paid into the Midstream and Downstream Gas Infrastructure Fund, will now be remitted to the Federation Account, while expenditures from the fund must comply strictly with public procurement laws.

The Presidency said the multiple deductions under the PIA framework had far exceeded global norms and effectively diverted more than two-thirds of potential oil and gas remittances, contributing to declining net revenue inflows.

President Tinubu anchored the order on Sections 5 and 44(3) of the Constitution, which vest ownership and control of mineral resources in the Government of the Federation. He also approved the establishment of an inter-ministerial implementation committee to oversee the reforms and signalled a broader review of the PIA to address structural and fiscal anomalies.

While applauding the reform, CMAN urged that similar corrective measures be extended to joint venture assets and called for the inclusion of the Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission on the implementation committee to strengthen oversight further.

For fiscal authorities and market participants, the development signals a potential surge in Federation allocations amid heightened budgetary pressures, reinforcing expectations of improved liquidity across the public sector and positive spillovers for Nigeria’s capital market.

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