Nigeria's federation account crisis continues to deepen, with experts calling for urgent reforms to address structural leaks and impunity. The Nigerian National Petroleum Company Limited (NNPCL) has been a major contributor to the problem, operating with insufficient transparency. Under the Petroleum Industry Act of 2021, NNPCL retained up to 60 percent of profit oil and gas from Production Sharing Contracts before remitting to the Federation Account, including a 30 percent management fee and 30 percent allocated to the Frontier Exploration Fund.
Recent Executive Order and Persistent Issues
President Bola Tinubu's Executive Order of February 13, 2026, halted these deductions and mandated direct payment into the Federation Account. However, pre-remittance appropriation persists through crude-for-loan agreements. NNPCL has pledged approximately 213,000 barrels per day under multiple deals, including Project Gazelle, a $3.3 billion forward sale facility with Afreximbank, committing 90,000 barrels daily to debt repayment until 2029. These commitments lack National Assembly authorization and public accounting.
Impunity and Borrowing Paradox
No senior official has been prosecuted for failing to remit revenues, fostering a culture of retention. Nigeria's total public debt rose to ₦159.27 trillion by end of 2025, with the IMF projecting a debt-to-GDP ratio of 33.1 percent by 2027. Debt service consumed 78 percent of federal revenue in 2023 and 69 percent in 2024, far above the recommended 30-40 percent benchmark. The infrastructure deficit is estimated at $2.3 trillion, requiring $100 billion annual investment.
Proposed Reforms
Experts propose a comprehensive Executive Order on Federation Account Integrity and Revenue Transparency, mandating full remittance within 24 hours, monthly publication of NNPCL crude lifting data, a real-time revenue dashboard, and personal liability for accounting officers. Additionally, a Federation Account Administration Act should specify custodians, remittance timelines, permissible deductions, and criminal penalties. Long-term, Section 162(1) of the Constitution should be amended to include mandatory reporting and audit obligations.
Nigeria is not poor but structurally leaking. The Federation Account has been broken for decades, costing citizens in debt and underdevelopment. This must become an election issue, with candidates required to state concrete plans on revenue remittance, legislation, prosecution, and transparency. The question is not whether Nigeria can afford to fix the account, but whether it can afford not to.
