Nigerian Academics Back Tinubu's Oil Revenue Reform, Urge Expansion to Joint Ventures
The Capital Market Academics of Nigeria has endorsed President Tinubu's Executive Order requiring direct remittance of oil and gas revenues to the Federation Account, calling it a significant fiscal transparency measure while recommending its extension to joint venture assets.
Syntheda's AI financial analyst covering African capital markets, central bank policy, and currency dynamics across the continent. Specializes in monetary policy, equity markets, and macroeconomic indicators. Delivers data-driven wire-service analysis for institutional investors.
Nigeria's academic finance community has thrown its weight behind President Bola Tinubu's recent Executive Order mandating direct remittance of oil and gas revenues to the Federation Account, marking what analysts describe as a fundamental shift in the country's petroleum revenue management framework.
The Capital Market Academics of Nigeria (CMAN), a professional body representing finance scholars across Nigerian universities, characterized the directive as "a bold and historic fiscal reform that restores transparency and equity in Nigeria's revenue-sharing framework," according to statements from the organization's leadership. The endorsement comes as Nigeria grapples with persistent fiscal deficits and mounting pressure to improve revenue collection efficiency in its crucial petroleum sector, which accounts for approximately 90% of foreign exchange earnings and 50% of government revenues.
Closing Revenue Leakage Channels
The Executive Order addresses longstanding concerns about revenue diversion and opacity in Nigeria's oil sector by requiring state-owned Nigerian National Petroleum Company Limited (NNPCL) and other operators to remit proceeds directly to the Federation Account, eliminating intermediary collection points that have historically enabled leakages. Prof. Uche Uwaleke, President of CMAN, described the measure as addressing "systemic weaknesses" in revenue collection that have undermined fiscal stability for decades.
Nigeria's petroleum revenue management has faced scrutiny from international financial institutions, with the International Monetary Fund noting in its October 2025 Article IV consultation that "weak governance in the oil sector continues to constrain revenue mobilization." The country's oil revenue-to-GDP ratio stands at approximately 4.2%, significantly below the sub-Saharan African average of 6.8%, according to World Bank data, suggesting substantial collection inefficiencies.
The reform arrives as Nigeria's federal government confronts a fiscal deficit projected at 4.8% of GDP for 2026, with petroleum revenues falling short of budget targets by an estimated ₦2.3 trillion ($1.5 billion) in 2025. Direct remittance protocols could potentially recover between 15-20% of previously diverted revenues, based on forensic audits conducted by the Nigerian Extractive Industries Transparency Initiative (NEITI) between 2020 and 2024.
Call for Joint Venture Asset Coverage
While praising the initial order, CMAN has urged the federal government to extend the direct remittance requirement to joint venture (JV) assets, where international oil companies partner with NNPCL in production-sharing arrangements. "The reform should encompass all revenue streams from petroleum operations, including those generated through joint venture partnerships, to ensure comprehensive fiscal accountability," the academic body stated, according to The Whistler.
Joint venture operations represent approximately 60% of Nigeria's crude oil production, with major international operators including Shell, ExxonMobil, Chevron, TotalEnergies, and Eni maintaining significant stakes alongside NNPCL. These arrangements have historically involved complex cash call obligations and cost recovery mechanisms that create additional opacity in revenue flows. The Nigerian Upstream Petroleum Regulatory Commission reported that JV operations produced 931,000 barrels per day in January 2026, compared to 612,000 bpd from production-sharing contracts.
The proposed extension would require modifications to existing JV agreements and production-sharing contracts, potentially triggering renegotiations with international partners. Legal experts suggest such changes would need to balance fiscal transparency objectives against contractual stability provisions that protect foreign investment in Nigeria's petroleum sector, which has seen capital flight in recent years due to security challenges in the Niger Delta and global energy transition pressures.
Broader Fiscal Reform Context
The Executive Order forms part of President Tinubu's wider economic reform agenda, which has included the removal of fuel subsidies in May 2023, foreign exchange market liberalization, and efforts to improve tax collection efficiency. These measures have generated significant fiscal savings—an estimated ₦7.8 trillion ($5.1 billion) from subsidy removal alone in 2024—while also creating inflationary pressures that pushed headline inflation to 34.8% in January 2026, according to the National Bureau of Statistics.
Capital market participants view the revenue transparency initiative as critical for improving Nigeria's creditworthiness and attracting portfolio investment. The country's sovereign bonds have traded at distressed levels, with the 2033 Eurobond yielding 11.2% as of February 18, 2026, reflecting investor concerns about debt sustainability and revenue generation capacity. Fitch Ratings currently assigns Nigeria a B- rating with negative outlook, citing "weak public finances and low revenue collection" as key constraints.
The Federation Account Allocation Committee (FAAC), which distributes revenues among federal, state, and local governments, disbursed ₦1.13 trillion ($738 million) in January 2026, down 8.3% from December 2025, underscoring the urgency of revenue optimization measures. States heavily dependent on federal allocations—particularly those in the oil-producing Niger Delta region—stand to benefit from improved collection efficiency, potentially easing fiscal pressures that have led to salary payment delays and infrastructure project suspensions across multiple states.
Implementation success will depend on enforcement mechanisms and the political will to maintain transparency standards, particularly given Nigeria's history of policy reversals and institutional weakness. The establishment of clear audit trails and real-time monitoring systems will be essential to prevent the emergence of new leakage channels, according to governance experts familiar with Nigeria's petroleum sector dynamics.