RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows
The Revenue Mobilisation Allocation and Fiscal Commission has thrown its weight behind President Bola Tinubu’s latest directive on oil and gas revenue remittances, describing the move as a decisive fiscal reform capable of strengthening public finance transparency and increasing allocations to the three tiers of government.
In a detailed statement issued by its Chairman, Dr Mohammed Shehu, the Commission argued that the presidential directive mandating direct remittance of key oil and gas revenues into the Federation Account would eliminate structural deductions that have historically reduced distributable earnings.
At the centre of the Commission’s position is a clear assertion: RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows as a constitutionally anchored intervention aligned with fiscal accountability objectives.
Constitutional grounding and legal rationale
According to the Commission, the Executive Order derives its authority from Section 5 of the 1999 Constitution (as amended), which empowers the President to exercise executive powers of the Federation. It is further anchored on Section 44(3), which vests ownership and control of mineral resources—including oil and gas—in the Government of the Federation for the collective benefit of Nigerians.
RMAFC maintained that the constitutional framework provides sufficient legal grounding for measures designed to ensure that revenues due to the Federation are not diluted through layered deductions or retained outside statutory channels.
Prior to the directive, certain provisions within the Petroleum Industry Act (PIA) permitted deductions such as management fees and frontier exploration allocations before remittances reached the Federation Account. The Commission contends that these deductions reduced the net pool available for distribution to federal, state and local governments.
By affirming that RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows, the Commission positions the reform as both corrective and transformative.
Fiscal implications for federal allocations
Preliminary revenue modelling suggests that the new remittance structure could materially increase distributable income under the Federation Account Allocation Committee framework. Analysts estimate that additional inflows could reach trillions of naira annually, depending on production volumes and realised oil prices.
Data drawn from recent FAAC submissions indicate that substantial sums—running into hundreds of billions of naira—were previously allocated to management fees and frontier exploration funding. Under the revised framework, revenues including royalty oil, tax oil, profit oil, profit gas, and gas flaring penalties are to be paid directly into the Federation Account before statutory distribution.
RMAFC argues that enhanced direct remittance will improve cash flow predictability, facilitate more accurate fiscal planning, and strengthen the transparency of revenue monitoring mechanisms.
The Commission reiterated that RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows because it reinforces the constitutional architecture governing national revenue collection and distribution.
Oversight mandate and monitoring capacity
The Commission emphasised that the reform directly supports its constitutional oversight role under Paragraph 32 of Part I of the Third Schedule to the Constitution. This provision mandates RMAFC to monitor accruals to and disbursement of revenue from the Federation Account.
By simplifying remittance channels and eliminating intermediate deductions, the Executive Order is expected to enhance audit trails and reduce ambiguity in revenue reconciliation.
Officials noted that fragmented revenue flows in the past complicated oversight processes and created discrepancies between projected and actual distributable balances. The revised structure, they argue, aligns revenue collection more closely with constitutional reporting obligations.
Thus, the repeated declaration that RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows reflects both institutional and fiscal considerations.
Broader macroeconomic context
Nigeria continues to grapple with mounting fiscal pressures, including rising debt service obligations, infrastructure deficits, security expenditure, and social sector funding requirements. With oil and gas revenues still accounting for a substantial share of foreign exchange earnings and government income, improving remittance efficiency is viewed as a strategic priority.
Fiscal analysts observe that predictable inflows into the Federation Account can reduce short-term borrowing needs and enhance budget execution efficiency at subnational levels. Increased allocations could also stabilise state finances, particularly in regions heavily dependent on federal transfers.
RMAFC characterised the Executive Order as timely, given ongoing public financial management reforms aimed at strengthening revenue mobilisation and reducing leakages across government institutions.
The Commission’s endorsement—RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows—underscores its alignment with these reform objectives.
Implementation and institutional coordination
While the directive sets out a new remittance pathway, effective implementation will depend on inter-agency coordination among revenue-generating bodies, regulatory institutions, and financial oversight agencies.
RMAFC pledged to collaborate with relevant stakeholders to ensure compliance and safeguard the integrity of the Federation Account. Monitoring frameworks are expected to be reinforced to track remittance patterns and identify discrepancies in real time.
Fiscal policy observers note that the reform’s long-term success will hinge on transparent reporting, consistent enforcement, and the avoidance of administrative bottlenecks that could create fresh inefficiencies.
Nevertheless, the Commission remains confident that the directive will streamline revenue management and enhance distributable capacity across all tiers of government.
As debate continues within policy and industry circles regarding the broader implications of the Executive Order, RMAFC’s position provides institutional backing for the Federal Government’s reform agenda.
By reiterating that RMAFC backs Tinubu’s executive order to curb leakages, boost Federation Account inflows, the Commission signals its belief that the measure strengthens fiscal federalism, enhances transparency, and improves the sustainability of Nigeria’s public finance framework.
If effectively implemented, the directive could mark a pivotal shift in oil and gas revenue governance—ensuring that constitutionally mandated funds flow directly into the Federation Account for equitable distribution and national development priorities.
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