By Olisa Agbakoba and Collins Okeke

The Nigerian National Petroleum Company Limited (NNPCL) compounds the problem by operating with insufficient transparency. Under the Petroleum Industry Act, 2021, the Nigerian National Petroleum Company Limited retained as much as 60 per cent of profit oil and gas from Production Sharing Contracts before any remittance to the Federation Account, comprising a 30 per cent management fee and a further 30 per cent allocated to the Frontier Exploration Fund. President Tinubu’s Executive Order of February 13, 2026 has since halted these deductions and directed that such revenues be paid directly into the Federation Account.

However, the structural problem of pre-remittance appropriation persists in another form. The Nigerian National Petroleum Company Limited has pledged a combined total of approximately 213,000 barrels per day of Nigeria’s crude oil under multiple crude-for-loan agreements, including Project Gazelle, a $3.3 billion forward sale facility with the African Export-Import Bank (Afreximbank) under which 90,000 barrels per day alone are committed to debt repayment until 2029. These are major fiscal commitments made in the name of the federation, most without National Assembly authorisation and with limited public accounting.

Underlying all of this is impunity. No senior government official has ever been prosecuted specifically for failing to remit revenues to the Federation Account. Without consequences, the culture of retention persists.

The borrowing paradox
The direct consequence of this structural failure is one of the most painful paradoxes in Nigerian public life: a country that generates extraordinary revenues simultaneously carries crushing debt. Nigeria’s total public debt rose to ₦159.27 trillion at the end of 2025, and the IMF projects the country’s debt-to-GDP ratio will reach 33.1 per cent in 2027, coinciding with a critical election cycle. Debt service consumed 78 per cent of federal revenue in 2023 and, despite improvement, still consumed 69 per cent in 2024, remaining far above the 30 to 40 per cent benchmark recommended by the World Bank and IMF for developing economies. The country’s infrastructure deficit is estimated at $2.3 trillion between 2020 and 2043, requiring approximately $100 billion in annual investment.

Every naira diverted from the Federation Account makes that deficit wider and that debt deeper.

What needs to be done
The President of Nigeria has both the constitutional authority and the moral obligation to act. Section 5(1) of the Constitution vests executive power in the President, including responsibility for implementing all laws. Section 162 creates a constitutional obligation that revenues be remitted, and the executive is the primary instrument of that obligation’s enforcement.

Our proposal is that the President should issue a comprehensive Executive Order on Federation Account Integrity and Revenue Transparency, a far broader instrument than the narrow petroleum revenue directive issued in early 2026. The Order should mandate that all revenues collected by any federal ministry, agency, government-owned enterprise, federal court, or federal institution be remitted in full to the Federation Account within 24 hours of collection, with no deductions permitted before remittance. It should require NNPCL to publish cargo-by-cargo crude oil lifting data and remittance schedules on a monthly basis. It should establish a publicly accessible, real-time Federation Account Revenue Dashboard disclosing what every collecting institution billed, collected, and remitted.

Finally, it should make accounting officers personally liable for non-remittance within prescribed timelines, including by referral to the Economic and Financial Crimes Commission (EFCC) for prosecution.

Alongside the Executive Order, Nigeria needs a Federation Account Administration Act, a dedicated statute that does what the Constitution left undone: it should specify the banking custodian, set remittance timelines, define permissible deductions, establish criminal penalties, and create a transparent audit architecture covering every revenue stream, including Federal courts, hospitals, universities etc.

In the longer term, Section 162(1) of the Constitution should be amended to insert a new subsection 162(1A) incorporating mandatory reporting and audit obligations and removing the reliance on executive discretion that has allowed the Federation Account to haemorrhage for 25 years.

The proposed amendment reads as follows: “All revenues accruing to the Federation shall be paid into the Federation Account in gross. No deductions, costs, charges, or offsets of any nature shall be made prior to such payment. All costs and expenditures relating to the generation of such revenues shall be appropriated by the National Assembly and disbursed only after remittance into the Federation Account has been made. No executive instrument, administrative direction, or government policy shall establish or maintain any account as a substitute for, or as the equivalent of, the Federation Account established by this section.”

Conclusion.
Nigeria is not poor. Nigeria is structurally leaking. The Federation Account, the constitutional vessel into which all national revenue is supposed to flow, has been broken for decades, and the Nigerian people have paid the price in debt, decay, and deferred development. The tools to fix it are available: executive orders, legislation, technology, and the political will to hold the powerful accountable.

This must also become an election issue. Every presidential candidate seeking the mandate of Nigerians in 2027 ought to be required to state clearly and specifically what they intend to do about the Federation Account. Not platitudes about fighting corruption or growing the economy, but concrete answers: Will you issue an Executive Order on revenue remittance? Will you push for a Federation Account Administration Act? Will you prosecute officials who divert federation revenues? Will you publish a real-time revenue dashboard? Nigerians are entitled to those answers before they vote, not after. Any candidate who cannot answer these questions does not understand the country’s fiscal crisis.

Any candidate who refuses to answer them is telling you something important about their intentions.

The question is not whether Nigeria can afford to fix the Federation Account. The question is whether Nigeria can afford not to.

Dr Agbakoba is a Senior Advocate of Nigeria (SAN). Okeke is an associate in the law firm of Olisa Agbakoba Law Associates.