Nigeria Oil Revenue Reform: RMAFC, PETROAN Back Tinubu's Direct Remittance Order
The Revenue Mobilisation Allocation and Fiscal Commission and Petroleum and Natural Gas Senior Staff Association endorse President Tinubu's executive order mandating direct oil revenue remittance, citing improved fiscal transparency and potential for enhanced investor confidence.
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Nigeria's Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PETROAN) have endorsed President Bola Tinubu's executive order requiring direct remittance of oil revenues to government coffers, marking a significant shift in the country's petroleum revenue management framework.
The executive order, which mandates oil revenue flows directly into designated government accounts rather than through intermediary channels, represents the latest in a series of fiscal reforms aimed at addressing long-standing transparency concerns in Africa's largest oil producer. Nigeria's petroleum sector accounts for approximately 90 percent of foreign exchange earnings and over 50 percent of government revenues, making effective revenue collection critical to fiscal stability.
Industry Bodies Signal Support for Transparency Measures
PETROAN characterized the directive as "a reform-driven step to boost accountability and investors' confidence in Nigeria's energy sector," according to statements released following the order's announcement. The association's backing carries weight given its representation of senior-level personnel across Nigeria's upstream, midstream, and downstream petroleum operations.
The RMAFC, Nigeria's constitutional body responsible for revenue allocation formulas among the three tiers of government, similarly welcomed the measure as a mechanism to enhance fiscal discipline. The commission has historically advocated for streamlined revenue collection processes to minimize leakages and improve transparency in oil proceeds distribution.
Nigeria has struggled with oil revenue accountability for decades, with the Nigerian Extractive Industries Transparency Initiative reporting significant discrepancies between production volumes and remitted revenues in previous audits. The country's oil production averaged 1.42 million barrels per day in January 2026, according to OPEC secondary sources, below its 1.5 million bpd quota and well beneath its production capacity of approximately 2.5 million bpd.
Implications for Investment Climate and Fiscal Management
The direct remittance framework addresses investor concerns regarding revenue transparency, a factor that has complicated Nigeria's efforts to attract foreign capital into its petroleum sector. International oil companies and indigenous operators have cited opacity in government revenue handling as a risk factor in project financing and partnership negotiations.
Nigeria's oil sector has faced declining investment over the past decade, with major international operators including Shell, ExxonMobil, and Equinor divesting onshore and shallow-water assets. Total foreign direct investment into Nigeria's oil and gas sector fell to $468 million in the first nine months of 2025, according to National Bureau of Statistics data, down from $1.2 billion in the corresponding period of 2024.
The executive order's implementation may require coordination with the Nigerian National Petroleum Company Limited (NNPCL), which manages joint venture arrangements with international operators and handles crude oil marketing. NNPCL has historically retained portions of oil revenues to cover operational costs and subsidy obligations before remitting balances to the Federation Account, a practice that has generated controversy regarding transparency.
Broader Reform Context and Implementation Challenges
President Tinubu's administration has pursued multiple energy sector reforms since assuming office in May 2023, including the removal of fuel subsidies and the liberalization of foreign exchange markets. These measures have generated significant economic disruption, with inflation reaching 34.8 percent year-on-year in December 2025, according to the National Bureau of Statistics.
The direct remittance order aligns with International Monetary Fund recommendations for improved public financial management in resource-dependent economies. The IMF's 2025 Article IV consultation with Nigeria emphasized the need for enhanced oil revenue transparency and predictable fiscal frameworks to support macroeconomic stability.
Implementation will likely require regulatory clarifications regarding the treatment of cost recovery provisions in production sharing contracts, joint venture cash call obligations, and petroleum profit tax remittances. The Nigerian Upstream Petroleum Regulatory Commission and the Federal Inland Revenue Service will need to coordinate on technical aspects of the direct remittance mechanism.
The endorsement from RMAFC and PETROAN may facilitate smoother implementation by signaling broad stakeholder acceptance, though questions remain regarding operational details and the timeline for full deployment across Nigeria's complex petroleum revenue architecture.