By Femi Ajani

On 19 February 2026, President Bola Ahmed Tinubu issued an Executive Order that has already triggered debate across Nigeria’s policy and energy circles. The Order realigns oil and gas revenue flows with constitutional provisions, suspends certain structural deductions embedded in the fiscal framework, and clarifies regulatory roles across the sector.

The announcement has triggered so much public debate and discourse that it feels necessary to ask some fundamental questions:
Why has this order been issued? Who is the ultimate beneficiary of the changes being sought?

Oil as a national balance sheet
Nigeria holds approximately 37 billion barrels of proven crude oil reserves and over 200 trillion cubic feet of natural gas. They contribute one of the Federation’s most significant strategic economic assets, underpinning fiscal capacity, export earnings, and long-term energy security.

Under the 1999 Constitution, mineral resources belong to the Government of the Federation, and revenues derived from them were to be paid into the Federation Account for distribution across federal, state, and local governments, reflective of the core irrefutable principle: hydrocarbon wealth is national wealth. But national wealth is only meaningful if it becomes national value.

Oil in the ground does not build power plants. Gas reserves do not automatically finance roads and bridges. Production figures do not, by themselves, unlock jobs for a 19-year-old Nigerian entering the labour market. Conversion is what matters.
The central task of Nigeria’s oil and gas ecosystem, regulators, operators, fiscal authorities, and crucially its national oil company, is to convert hydrocarbon resources into sustained economic value for all.

A demographic clock is ticking
Nigeria is already Africa’s most populous nation, with an estimated population exceeding 220 million. By mid-century, projections suggest the figure could be around 400 million. More than 60 per cent of Nigerians are under the age of 25.

This is the largest youth cohort in one of the world’s estimated largest GDP contributors. We need large-scale capital deployment in infrastructure, electricity, industry, education, healthcare, and logistics to convert population growth into productivity growth. Estimates from multilateral development institutions suggest that Nigeria’s long-term infrastructure requirement runs into trillions of dollars over the coming decades.

The annual infrastructure financing gap alone is measured in tens of billions of dollars. At the same time, current public capital budgets frequently face release constraints. These are our current structural realities.
Against this backdrop, the efficiency and transparency of oil revenue remittance must be paramount.

NNPC: From custodian to commercial actor
To appreciate the importance of this moment fully, one must understand the historical role of NNPC.
For decades, NNPC has operated not merely as a commercial entity but as a custodian of national assets and, at times, as a fiscal shock absorber. It lifted crude on behalf of the Federation; managed joint venture cash calls; absorbed subsidy burdens; and operated at the intersection of policy and commerce.

In theory, this hybrid role was designed to protect national interest. In practice, it created distortions.
A company cannot simultaneously function as a commercial partner, a revenue collector, a quasi-regulator, and a policy instrument without blurring its mandate and weakening accountability.

The Petroleum Industry Act of 2021 was intended to correct that. By commercialising NNPC as Nigerian National Petroleum Company Limited under company law, the Act aimed to create a commercially disciplined national oil company focused on operational performance, cost efficiency, and value creation.

That evolution is not only necessary; it is critical. National oil companies that succeed globally do so because their mandates are clear. They are operators, not fiscal conduits. They compete for capital, manage assets efficiently, and deliver returns transparently to their shareholders – the citizens of their nations.

But where fiscal architecture continues to entangle operational activity with revenue intermediation, the blurring persists. When revenue flows are structurally retained or routed through corporate mechanisms before reaching the Federation, three distortions occur; the Federation’s net inflows weaken, value created from Nigeria’s oil — a national asset — is retained within corporate structures instead of being transparently distributed for national development and the national oil company’s mandate becomes blurred, drifting from value creator to revenue gatekeeper.

Separating fiscal authority from operational responsibility restores institutional integrity. It allows NNPC Ltd to stand on its own commercial feet, measured by its ability to compete, produce efficiently, and generate sustainable returns for its apexshareholders, the Nigerian people.

Who truly benefits?
The answer depends on whether one views oil wealth as an institutional entitlement or a national instrument. If oil revenues are treated primarily as flows to sustain sectoral structures, then reform feels disruptive.

If oil revenues are treated as developmental fuel for 220+ million Nigerians, not the circa 5000 employees of a corporate entity, then this rationalisation becomes imperative.

The ultimate beneficiary is the Federal Republic of Nigeria because of the increased fiscal capacity it delivers. Fiscal capacity determines whether capital budgets translate into delivered projects, whether infrastructure corridors unlock productivity and trade, and whether youth employment programmes are able to absorb a growing and increasingly ambitious workforce. It shapes the strength and responsiveness of public health and social protection systems and ultimately determines whether states and local governments receive the resources required to drive growth and deliver impact at the sub-national level.

The shrinking monetisation window
There is another layer of urgency often overlooked in domestic debate.

Global energy markets are evolving rapidly. While oil demand remains substantial today, long-term demand growth is increasingly contested. Energy transition pressures, technological shifts, and decarbonisation policies are reshaping capital allocation decisions.

International capital is becoming more selective. Governance standards are rising. Volatility is increasing. Nigeria’s hydrocarbon endowment is significant, but it is not permanent in economic relevance.

The country has a finite window within which it can convert oil and gas reserves into diversified economic capacity before structural global shifts reduce the premium attached to those resources. Every year of inefficiency shortens that window.
If Nigeria fails to convert hydrocarbon wealth into infrastructure, industrial capacity, and human capital now, it risks entering a lower-demand future without the economic base to sustain its population growth.

Oil is not an end in itself
Nigeria’s oil sector has often been debated through the lens of politics, institutional power, and short-term controversies.

It may be time to return to first principles. Oil is not an end in itself. It is a means to an end. Its purpose is not to circulate within opaque channels. Its purpose is to build capacity beyond itself.

Nigeria’s demographic trajectory demands infrastructure. Infrastructure demands capital. Capital demands disciplined revenue architecture. The real question to be debated here is whether Nigeria can afford not to ensure that its most strategic asset is converted efficiently, transparently, and constitutionally into national value.`

In the years ahead, success will not be measured by press statements or public debates. It will be measured by whether Nigeria’s oil revenues become visible in power reliability, industrial growth, infrastructure completion, and opportunity for its expanding youth population.

Ajani, a public policy industry analyst wrote from Abuja.