NNPC Ltd. remitted N14.6 trillion to the federation account in 2025, N10 trillion in 2024, and about N4.5 trillion from January to September of 2023. In 2022 there was zero remittance due to subsidy payments even though a profit of N2.5 trillion was reported by the company. The removal of subsidy has loosened up trillions of naira for the federation account which is shared by the three tiers of govt. Since the removal, close to 2 trillion is shared every month by the federal, states and local governments.
Before the removal of subsidy by President Bola Ahmed Tinubu in 2023, the naira was at about N800 to a dollar. This was consolidated by the elimination of a dual exchange rate, and the twin reforms took the dollar up to about N1900 to one dollar. The rate has crept back to about N1350 and manufacturers and industrial experts like Aliko Dangote, and govt officials including the Vice-President, Sen. Kashim Shettima; have all predicted a fall for the dollar, or a rise in the value of the naira, to about N1,000 to $1. The CBN has had to mop up excess dollar liquidity in the market to maintain a balance and a steady rise in the value of the naira.
The Petroleum Industry Act, PIA 2021, the removal of subsidy and the elimination of dual or arbitrary exchange rates were tumultuous for a third world country in the short term, but have yielded unbelievable results in the mid-term, and look even much more brighter in the next year or two.
Is the naira truly gaining value? It is regaining its true value because the economy is not being padded, and it is experiencing real growth. The Federal Govt is not “profusely” defending the naira and neither is it “ways and meansing it”! It is organically growing it. Our GDP is growing fast with a growth rate of a little over 4% in 2025 with better horizons in 2026 and beyond.
For the 1st time, global economy experts forecast that the African economy will outpace Asia with Nigeria set to climb to the 3rd largest African economy ahead of Algeria. With a growth rate of 4.4%, faster than the global average of 3.1%, Nigeria’s GDP is rising to about $334 billion. Finance Educator and Analyst Toby of Tomola group says the world is focusing on Africa and only Africans don’t see it. The CBN says Nigeria’s foreign reserve is now put at $50 billion as a result of a recent surge of about 4.93%. The Nigerian stock market is not doing so badly too with an increase in the capital market contribution to GDP up to 33%. This is estimated at N123 trillion. With this development the Nigerian stock market is officially the best performing stock market in Africa at the moment with the naira as the 2nd best performing currency this year. Nigeria is no longer playing catch up, but fast becoming a global leader. We are ranked 6th among the top contributors to global real GDP growth. Our economic reforms are real and organic and have real positive global outlook.
Notwithstanding this positive global outlook we have not yet reached the status of a non-oil dependent economy. NNPC Ltd remains a cash cow for the federation. While the PIA 2021 has put so many issues into perspective and have streamlined the activities of the old oil behemoth NNPC into a new global oil company with various subsidiaries to regulate and maintain the industry, it is not to say that it is a perfect Act that cannot be amended or improved for enhanced productivity and global competitiveness – all this while advancing transparency in its operations.
President Bola Ahmed Tinubu in another bold reform initiative issued an Executive Order to safeguard oil and gas revenues and enhance regulatory clarity. The order primarily suspends the collection of management fees by the NNPC, as well as the frontier exploration fees. It also directs taxes, royalties and profit oil under production sharing contracts be paid to the appropriate fiscal authorities. It also clarifies the delineation of responsibilities between the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, and the Nigeria Midstream and Downstream Petroleum Regulatory Authority, NMDPRA; providing greater regulatory certainty for operators and investors.
This Mr. President said was necessary to address the continued decline in oil and gas revenues inflows into the federation account. This is Mr. President putting on his chartered accountant hat in an industry he has loads of experience in, as Senior Auditor, Audit Manager and Treasurer of Exxonmobil; needless to say a giant global oil company.
The public space has become rancorous and the owners of the leaks Mr. President is trying to plug have started playing the cabals cards once again. They obviously control the 30% management fees retained by NNPCL and the 30% frontier fees as stipulated in the PIA of 2021. It is envisaged that these funds of the NNPCL and others will be paid directly to the federation account. It is approximated to be between N1.5 trillion to around 15 trillion depending on what revenue streams are eventually paid directlyinto the federation account. This wil be additional revenue for the three tiers of government.
The lead arguments against Mr. President’s EO9 have been about the future of frontier fields exploration fees. But what really are the successes recorded since the provision of those fees? How transparently have they been applied? Are they being recouped from the fields already after all these years? Exploration is big business but come on, technology continues to provide more innovative ways in the search and development of oil fields. It may be another apparatus for cabals and phantom oil searches that can go on for years. Possibly an exploitation instead of exploration.
Those funds are safer in the federation account for all to see and decipher what goes where and who holds what. There is currently a forensic audit of the NNPCL accounts and this comes not so long after a staggering statement by the National Assembly over hundreds of trillions of naira that remain unremitted from the NNPCL.
Mr. President has done away with the subsidy fraud scheme and the loss of federation revenue to subsidy fraud and fabulous oil import forex figures. He is now looking at the proper management of the revenues that the NNPCL is making on behalf of the federation. This should be extended soon enough to the minerals industry where mining cloaked as banditry is running amok in the north.
