Nigeria has begun enforcing new measures aimed at plugging long-standing leakages in oil revenues, with authorities ordering the state oil company and other government agencies to remit funds directly to federal accounts without making deductions for costs or fees.
Finance Minister Wale Edun said the government had started implementing a presidential executive order designed to strengthen public revenue collection and improve transparency in how proceeds from the oil sector are handled. The move is part of a broader fiscal reform drive as Africa’s largest economy seeks to boost domestic revenues and reduce pressure on public finances.
Under the new arrangement, the Nigerian National Petroleum Company (NNPC) Ltd and other relevant agencies will now be required to deposit all revenues due to the government in full before any operational costs or charges are considered. Officials say the change is intended to end a practice under which deductions were made before remittances reached public accounts, reducing transparency and often limiting the amount ultimately available to government at federal, state and local levels.
Edun said a committee he chairs had already moved to stop NNPC from taking a 30 percent management fee, with those funds now to be paid directly into government accounts. He said the decision would help ensure that oil earnings are more accurately captured and distributed under Nigeria’s fiscal framework.
“The objective is to ensure smooth and transparent remittance of all revenues due to all tiers of government, without extraneous deductions,” Edun said, according to comments reported Tuesday.
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The minister added that the committee would soon issue clearer operational guidelines to support implementation and reduce ambiguities around what should be remitted and how. That is expected to affect multiple revenue lines across the petroleum sector, including payments, penalties and statutory charges.
Among the items now being remitted directly to the federation account are deductions previously linked to frontier exploration as well as gas flare penalties, Edun said. Both categories have in the past generated debate over accountability and the treatment of sector-related revenues, particularly at a time when Nigeria is under pressure to maximise returns from its oil and gas resources.
The latest measures form part of a wider reform agenda under President Bola Tinubu, whose administration has made revenue mobilisation and fiscal consolidation a central part of its economic programme. Nigeria has been trying to stabilise its finances after years of weak revenue performance, high debt servicing costs and heavy dependence on volatile oil income.
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Although Nigeria is one of Africa’s largest oil producers, the country has often struggled to fully convert its energy wealth into public revenue due to inefficiencies, subsidy costs, production losses, theft and opaque remittance practices. Analysts have long argued that stronger oversight of oil receipts is essential if the government is to improve fiscal credibility and fund infrastructure, health, education and social spending.
Edun said the government was also working to increase non-oil and internal revenue through the use of technology and digitisation, part of a broader effort to widen the tax base and improve collection efficiency. In addition, authorities are considering options such as privatisations, divestments and public-private partnerships to unlock value from state-owned assets and attract private capital.
The success of the latest oil revenue reforms will depend on consistent enforcement and whether powerful institutions comply fully with the new rules. But if implemented effectively, the changes could mark an important step toward reducing leakages in a sector that remains critical to Nigeria’s economic stability.
For the government, the message is clear: with public finances under strain, every dollar of oil revenue counts.
