FG defends Executive Order 9 as oil revenue safeguard
The Federal Government has intensified its defence of its latest fiscal directive, insisting that FG defends Executive Order 9 as oil revenue safeguard in line with constitutional provisions and not as an overreach of executive authority.
The Director-General of the Budget Office of the Federation, Tanimu Yakubu, maintained that Executive Order 9 (EO9), recently signed by Bola Tinubu, is designed to reinforce constitutional custody of federation revenues, particularly within the oil and gas sector.
According to Yakubu, arguments suggesting that the President is “making law” through EO9 misinterpret both the 1999 Constitution and the fiscal intent behind the directive. He stressed that the order does not introduce new legislation but rather enforces existing constitutional mandates governing public revenue.
Constitutional foundation of EO9
As FG defends Executive Order 9 as oil revenue safeguard, the government has anchored its position on Sections 80 and 162 of the Constitution of the Federal Republic of Nigeria (as amended).
Section 80(1) mandates that all revenues raised or received by the Federation must be paid into and form part of the Consolidated Revenue Fund of the Federation, except where otherwise provided by the Constitution.
Section 162 complements this requirement by directing that all revenues accruing to the Federation be paid into the Federation Account for distribution among the federal, state, and local governments in accordance with prescribed allocation principles.
Yakubu explained that EO9 operationalises these provisions by mandating the direct remittance of petroleum-related revenues — including royalties, taxes, profit oil, profit gas, penalties, and other associated receipts — into constitutionally recognised accounts before any appropriation or expenditure.
“The order of legality is clear,” he stated. “Revenue must first enter constitutionally recognised accounts before it can be appropriated, shared, or spent.”
Addressing concerns over legislative encroachment
A key area of contention among critics has been whether the executive order intrudes upon legislative authority or alters statutory frameworks such as the Petroleum Industry Act.
However, as FG defends Executive Order 9 as oil revenue safeguard, Yakubu clarified that the directive does not amend any statute nor interfere with the procedural autonomy of the National Assembly as preserved under Section 60 of the Constitution. Instead, it is issued pursuant to Section 5, which empowers the President to execute and maintain the Constitution and existing laws.
He added that any dispute regarding the validity of EO9 should be resolved through judicial interpretation, underscoring that until a court pronounces otherwise, the executive remains duty-bound to safeguard federation revenues.
Revenue leakages and PIA deductions
The Federal Government’s position is partly rooted in concerns over revenue retention and deductions under the Petroleum Industry Act framework.
In announcing the order, the Presidency, through Special Adviser on Information and Strategy, Bayo Onanuga, noted that multiple deductions and management fees were significantly reducing net remittances into the Federation Account.
Under the current structure, the Nigerian National Petroleum Company Limited retains 30 per cent of the Federation’s oil revenues as a management fee on profit oil and profit gas derived from Production Sharing Contracts and other arrangements. Additionally, the company retains 20 per cent of its profits for working capital and future investments.
Government officials argue that the additional 30 per cent retention is excessive, particularly given the existing 20 per cent profit retention. As FG defends Executive Order 9 as oil revenue safeguard, the administration contends that tighter remittance controls are necessary to restore constitutionally guaranteed revenue flows to all tiers of government.
Implications for FAAC and fiscal stability
The broader fiscal context is central to the government’s defence. Federation revenues form the basis for monthly allocations distributed through the Federation Account Allocation Committee, which finances subnational budgets and public services nationwide.
Any reduction in gross remittances has direct implications for state and local government funding, infrastructure development, and debt sustainability metrics.
Yakubu emphasised that EO9 aims to strengthen transparency, improve reconciliation processes, and enhance reporting standards across revenue collection and custody chains. By eliminating duplicative structures and curbing wasteful spending, the directive is positioned as part of a broader fiscal consolidation strategy.
As FG defends Executive Order 9 as oil revenue safeguard, officials have framed it as essential to maintaining budget credibility and macroeconomic stability, particularly at a time when oil revenue volatility continues to affect fiscal planning.
The Budget Office Director-General reiterated that Nigeria’s constitutional framework provides mechanisms for resolving disputes over executive actions. Should any stakeholder challenge EO9’s legality, the judiciary remains the appropriate forum for adjudication.
In the interim, the executive branch maintains that it is constitutionally obligated to act in protection of public funds. “Pending any judicial pronouncement, the executive is duty-bound to protect Federation revenues and uphold constitutional supremacy,” Yakubu stated.
This stance underscores the administration’s broader fiscal reform agenda, which includes revenue mobilisation, expenditure rationalisation, and improved governance of state-owned enterprises.
Oil revenue remains Nigeria’s dominant foreign exchange earner and a critical contributor to public finances. Ensuring that proceeds are transparently collected, accurately reported, and constitutionally remitted is central to restoring investor confidence and stabilising public finances.
As FG defends Executive Order 9 as oil revenue safeguard, the government appears committed to recalibrating revenue management structures without seeking legislative amendment. Whether the order withstands legal scrutiny, if challenged, will shape the next phase of fiscal governance reforms.
For now, the administration insists that EO9 represents not an expansion of executive power but a reaffirmation of constitutional discipline in managing Nigeria’s most strategic revenue stream.
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