Energy Policy Expert Calls for Stakeholder Engagement on Nigeria's Direct Oil Remittance Executive Order
Prof. Wunmi Iledare has urged President Tinubu to consult lawmakers and industry stakeholders on executive orders mandating direct oil revenue remittance, warning that statutory coherence must be maintained to avoid fiscal and regulatory disruption.
Syntheda's AI mining and energy correspondent covering Africa's extractives sector and energy transitions across resource-rich nations. Specializes in critical minerals, oil & gas, and renewable energy projects. Writes with technical depth for industry professionals.
Nigeria's energy policy framework faces a critical test as senior industry experts call for broader consultation on executive orders governing direct oil revenue remittance. Prof. Emeritus Wunmi Iledare, Chair of the Oil, Gas, and Energy Policy Forum, has urged President Bola Tinubu to engage legislators and stakeholders before implementing measures that could fundamentally alter the country's petroleum revenue management architecture.
The intervention comes amid growing concerns over potential conflicts between executive directives and existing statutory frameworks governing Nigeria's oil and gas sector. Direct remittance orders, which typically mandate that oil revenues flow directly to designated government accounts rather than through traditional channels, have significant implications for fiscal transparency, revenue allocation, and the operational autonomy of state-owned enterprises.
Statutory Coherence at Risk
According to This Day, Prof. Iledare emphasized the need to "ensure statutory coherence" in implementing any executive orders affecting oil revenue management. The concern centres on potential contradictions with established legislation including the Petroleum Industry Act (PIA) 2021, which established comprehensive governance structures for Nigeria's upstream, midstream, and downstream petroleum operations. Nigeria's oil sector contributes approximately 90% of foreign exchange earnings and roughly 50% of government revenue, making policy coherence essential for macroeconomic stability.
The PIA created distinct regulatory bodies including the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), each with defined revenue collection and remittance responsibilities. Executive orders that bypass or contradict these statutory arrangements could create jurisdictional confusion, potentially deterring the $25-30 billion in upstream investment Nigeria seeks to attract over the next five years to reverse production declines.
"To ensure statutory coherence, energy expert and Chair of Oil, Gas, and Energy Policy Forum, Prof. Emeritus Wunmi Iledare, has urged President Bola Tinubu to engage" lawmakers and stakeholders, This Day reported, highlighting the technical complexity of aligning executive action with legislative intent in a sector governed by multiple overlapping frameworks.
Revenue Management and Fiscal Transparency
Direct remittance mechanisms have been proposed periodically as solutions to revenue leakages and inefficiencies in Nigeria's oil sector, where opacity in payment flows has historically undermined fiscal planning. The Nigerian National Petroleum Company Limited (NNPCL), restructured as a commercial entity under the PIA, currently manages significant revenue streams including crude oil sales, gas proceeds, and petroleum product imports. Any executive order mandating direct remittance would necessarily affect NNPCL's cash flow management and its ability to fund joint venture obligations, which have suffered from chronic underfunding estimated at $6 billion annually.
International financial institutions and credit rating agencies closely monitor Nigeria's petroleum revenue management practices. Moody's and Fitch have both cited fiscal transparency and predictable revenue flows as key factors in sovereign credit assessments. Abrupt policy changes implemented without legislative consultation could trigger negative revisions, raising borrowing costs at a time when Nigeria's debt service-to-revenue ratio already exceeds 90%.
The Federation Account Allocation Committee (FAAC), which distributes oil revenues among federal, state, and local governments according to constitutional formulas, would also be directly impacted by changes to remittance procedures. Monthly FAAC allocations averaged ₦1.2 trillion ($780 million) in 2025, with any disruption to collection mechanisms potentially delaying distributions and straining sub-national government finances.
Policy Implementation and Industry Impact
Prof. Iledare's call for stakeholder engagement reflects broader industry concerns about policy predictability in Nigeria's petroleum sector. International oil companies (IOCs) and indigenous producers operate under production sharing contracts (PSCs) and joint venture agreements that specify payment terms, tax obligations, and revenue-sharing formulas. Unilateral changes to remittance procedures could be interpreted as material alterations to fiscal terms, potentially triggering stabilization clauses that protect investors against adverse policy changes.
Nigeria's crude oil production has struggled to exceed 1.5 million barrels per day in recent years, well below the 2.0 million bpd OPEC quota, due to underinvestment, theft, and aging infrastructure. Restoring production requires not only capital but also regulatory certainty. Shell, ExxonMobil, TotalEnergies, and Chevron have collectively divested from onshore assets worth over $5 billion since 2020, citing operational challenges and policy unpredictability.
The proposed executive order on direct remittance must also account for gas revenue management. Nigeria flares approximately 7% of associated gas production despite possessing Africa's largest proven reserves at 209 trillion cubic feet. The PIA introduced fiscal incentives for gas utilization and midstream infrastructure development, with specific revenue-sharing arrangements. Any remittance order affecting gas proceeds could inadvertently undermine these incentives, delaying projects critical to domestic power generation and industrial development.
Looking ahead, the resolution of this policy question will signal whether Nigeria's energy governance is moving toward greater transparency and legislative oversight or toward concentrated executive control. International investors, multilateral lenders, and domestic stakeholders await clarity on how direct remittance orders will be reconciled with existing statutory frameworks. The outcome will likely influence not only immediate revenue flows but also longer-term perceptions of Nigeria's investment climate in a globally competitive market for petroleum capital.