Nigeria’s government is set to receive a greater share of the revenues generated from oil and gas exploration and production in the country, following a presidential directive to limit fees managed by the national oil company.
It is the latest move by Africa’s top crude producer to boost its coffers and comes just a year ahead of presidential elections.
President Bola Tinubu’s executive order includes preventing NNPC from collecting a 30% management fee on oil and gas revenues. Tinubu’s office faulted the Petroleum Industry Act, Nigeria’s landmark oil industry law signed in 2021 by his predecessor, for diverting constitutionally mandated funds from the government, and enabling “excessive deductions, overlapping funds, and structural distortions.”
The new order will increase money available to state governments for fiscal projects, analysts said, and its proximity to an election year will “limit pushback from some of those who might otherwise have resisted hard,” said Clementine Wallop of Horizon Engage. But, in bypassing parliament, the move stirs questions about regulatory certainty for investors at a time when Nigeria is pushing to ramp up interest in its rebounding oil and gas sector.
