Executive Order to Boost Monthly Allocation for States and LGAs- Uzoka-Anite
By Patience Ikpeme
Nigerians across the country can expect a significant increase in the money available for development as a new law kicks in to stop the leakage of oil and gas money.
The Minister of State for Finance Dr Doris Uzoka-Anite gave this cheering news during a meeting with the Federation Account Allocation Committee (FAAC) in Abuja, where she explained how the latest Presidential Executive Order will change the way the nation’s wealth is shared.
For many years, a lot of the money earned from oil and gas was taken out by various agencies before it even reached the federation account. However, the new law signed by President Bola Ahmed Tinubu is putting an end to those “off-budget” deductions. This means more money will now be available for the Federal, State, and Local Governments to share every month.
According to the Minister, the new law stops agencies like the NNPC from taking a 30% management fee on profit oil and gas. It also stops the practice of keeping 30% of funds for frontier exploration. Instead, all this money must now go straight into the federation account where everyone can see it and benefit from it. Even the fines paid by companies for burning gas, known as gas flare penalties, will now be added to the money shared by the three tiers of government.
The Minister made it clear that this is a major win for the common man. He said, “This Executive Order is a structural fiscal correction designed to restore constitutional discipline to petroleum revenue management and strengthen the Federation Account for the benefit of all Nigerians.”
She further explained that the goal is to move away from a system where agencies keep money for themselves first. “The fundamental shift is this: from a retention-based oil revenue model to a gross remittance, Federation-first model,” the Minister noted.
While this means more money will be hitting the accounts of State Governors and Local Government Chairmen, the Uzoka-Anite warned that this extra cash must be handled with great care. He pointed out that if too much money enters the economy at once, it could cause the prices of food and goods to go up, making life harder for the people.
To prevent this, the government plans to release any “back-pay” or recovered funds in small bits rather than all at once. The Minister also advised State Governments to use this extra income for things that help people, like better roads, farming, and electricity, rather than just spending it on office running costs or items that don’t last.
The Minister concluded by saying that the new law is about being honest with the nation’s wealth. He said, “All revenues accruing to the Federation belong first in the Federation Account. It restores transparency and enhances our collective fiscal position.”
