Mohammed Shehu, the chairman of the Revenue Mobilisation Allocation And Fiscal Commission says President Bola Tinubu’s order on direct oil revenue remittance will increase funds for the three tiers of government.
In a statement he personally signed in Abuja, Shehu described the directive as a major fiscal reform that would enhance transparency and block revenue leakages in the oil and gas sector.
The Executive Order mandates the direct remittance of oil and gas revenues into the Federation Account, a move the RMAFC boss said would improve cash flow predictability and strengthen fiscal federalism.
According to him, “by freeing revenues previously subjected to layered deductions and fragmented oversight, the Executive Order enhances transparency, improves cash flow predictability, strengthens fiscal federalism, and restores the constitutional revenue rights of the Federal, State, and Local Governments.”
He added that the order would close structural gaps that had enabled multiple deductions before funds reached the Federation Account.
“With this Executive Order, the constitutional architecture of revenue remittance is strengthened. It closes structural leakages, eliminates duplicative deductions, and ensures that revenues due to the Federation are remitted transparently. This directly supports the commission’s oversight and monitoring responsibilities,” he stated.
Shehu explained that certain provisions under the Petroleum Industry Act had previously allowed deductions such as management fees and frontier exploration allocations, which reduced net remittances to the three tiers of government.
He described the reform as timely, citing mounting fiscal pressures in areas such as security, infrastructure, education, healthcare and economic stabilisation.
The RMAFC chairman reaffirmed the commission’s commitment to working with relevant institutions to ensure effective implementation of the order and to safeguard the integrity of the Federation Account.
