The Governors of Nigeria’s oil-rich South-South region have thrown their weight behind President Bola Tinubu following his recent Executive Order directing the full and direct remittance of oil and gas revenues into the Federation Account.
Rising from deliberations, the South-South Governors Forum described the presidential directive as a watershed moment in the management of petroleum revenues and a decisive step toward restoring transparency and constitutional order in the sector.
In a statement issued on Wednesday by the Forum’s Chairman and Governor of Bayelsa State, Douye Diri, the governors commended the President for what they termed a bold and far-reaching intervention aimed at correcting longstanding fiscal distortions.
The Forum noted that the Executive Order was clear in intent and far-reaching in scope.
According to the governors, the directive promises to dismantle years of complex and opaque deduction mechanisms that, in their view, have deprived federal, state and local governments of their rightful statutory allocations.
Of particular significance, they said, is the move to abolish discretionary deductions and address the controversial 30 per cent Frontier Exploration Fund previously retained by the Nigerian National Petroleum Company Limited.
The governors argued that the fund had often resulted in substantial idle balances and weakened revenue flows to the Federation Account.
The new order also compels all oil and gas operators functioning under Production Sharing Contracts to remit Royalty Oil, Tax Oil and Profit Oil directly to the Federation Account.
The Forum believes this measure will significantly curb revenue leakages and enhance accountability within the petroleum value chain.
They maintained that the directive would not only boost distributable revenues but also strengthen fiscal federalism.
Increased inflows, the governors added, could translate into greater investment in infrastructure, healthcare, education and other critical sectors across all three tiers of government.
Beyond welcoming the Executive Order, the South-South governors also expressed satisfaction with President Tinubu’s decision to initiate a comprehensive review of the Petroleum Industry Act.
They described the move as evidence of responsive leadership and a willingness to revisit contentious aspects of the law.
The Forum reiterated its longstanding position that certain provisions of the Act require urgent reconsideration.
According to the statement, governors in the region have consistently warned that elements of the law could trigger instability if left unaddressed.
One major concern raised is the reduction of the Host Community Development Fund from the 10 per cent earlier proposed by many oil-producing states to the current three per cent allocation.
The governors urged the Federal Government to revisit this provision, arguing that oil-bearing communities deserve a more substantial share of proceeds derived from their environment.
They also criticised the exclusion of state and local governments from the administration of funds designated for host communities.
The Forum contended that subnational governments, being closer to the grassroots, are better positioned to oversee and manage such interventions effectively.
Describing the current framework as potentially crisis-inducing, the governors called on the President to ensure that the ongoing review of the Act addresses these contentious areas in the interest of equity, stability and sustainable development.
Overall, the South-South Governors Forum characterised the Executive Order as a significant stride toward fiscal justice, particularly for oil-producing states that have long demanded greater transparency in revenue management.
They expressed optimism that the reforms would usher in a new era of accountability in Nigeria’s petroleum industry while strengthening the financial capacity of governments at all levels to meet their developmental obligations.
