President Bola Tinubu has signed an Executive Order that is expected to significantly increase the revenue allocations for federal, state, and local governments in Nigeria by approximately N14.57 trillion. This measure directs that various oil and gas revenues, including royalties and other taxes collected under production sharing and risk service contracts, be deposited directly into the Federation Account. This policy change is particularly critical as it seeks to ensure a more efficient distribution of resources among the different levels of government in Nigeria.

An analysis of revenue inflows anticipated in 2025 reveals that the Nigerian National Petroleum Company is expected to contribute about N906.91 billion in management fees as well as funds earmarked for frontier exploration. Notably, revenues from oil and gas royalties are projected to reach N7.55 trillion, alongside gas flaring penalties amounting to N611.42 billion, both of which will now flow directly into the Federation Account. This change marks a substantial shift in the management of Nigeria's natural resource wealth, which has long been a contentious issue in the country's governance.

The implications of this Executive Order are multifaceted, potentially enhancing financial stability at various government levels while also addressing longstanding grievances regarding financial allocation from oil revenues. As the Nigerian government grapples with economic challenges and development needs, this strategic move may not only increase government revenues but also bolster transparency and accountability in the management of the nation’s natural resources, which will be closely observed by citizens and stakeholders alike.