Report making the rounds is that President Bola Ahmed Tinubu had ordered the Central Bank of Nigeria, CBN, to take over the responsibility for crude oil sales proceeds from the state-owned Nigerian National Petroleum Company Limited, NNPCL, in a move that is believed would address the widely criticised opaqueness in the NNPCL operations.

Before the current directives, the NNPCL held exclusive control over crude oil sales. It only renders accounts to the Federal Government while retaining proceeds.

The Nigerian government had already taken substantial steps towards reforming the oil sector. The implementation of the Petroleum Industry Act (PIA) that was signed into law by former President Muhammadu Buhari, is believed to be a landmark move aimed at restructuring the oil and gas industry in Nigeria. 

The PIA Act which provides a legal framework for the NNPC’s transformation into a commercially viable and transparent entity, seeks to eliminate inefficiencies and mismanagement within the oil sector, fostering a more competitive and accountable industry, promote transparency, attract investments, and ensure the sustainable development of the sector.

Under the new arrangement as par the dorective of President Tinubu, the NNPCL will be expected to submit receipts for crude oil sales to CBN for vetting and documentation, aimed at eliminating potential gaps in reporting and ensuring accurate records of oil revenue.

The Governor of the CBN, Mr. Olayemi Cardoso, during a keynote address at the launch of the Nigerian Economic Summit Group, NESG, titled '2024 Macroeconomic Outlook Report' noted that the directive is part of collaborative efforts between the CBN and the Ministry of Finance, in a coordinated effort to "enhance the Bank’s foreign exchange flows and contribute to the accretion of reserves."

Cardoso attributed the expected stability in the foreign exchange market for 2024 to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. He also said the reform aims to streamline and unify multiple exchange rates, fostering transparency and reducing arbitrage opportunities, which will boost investor confidence, attract foreign investment and elevate Nigeria’s appeal to global investors.

The directive which is seen as part of the reforms to enhance transparency in the oil sector has received positive reactions from experts and other stakeholders.

A vocal politician who is the Senate Chief Whip in the Senate, Ali Ndume, commended the President over the directive to the NNPCL to pay all crude oil proceeds into the Consolidated Revenue Fund domiciled in the CBN, while he also added that all other revenue generating agencies of government such as the Nigeria Maritime and Safety Administration, NIMASA; the Nigeria Ports Authority, NPA; the Nigeria Customs Service, NCS, among others should follow suit.

He said: “The President has now ordered that all crude oil sales money should be paid into the CBN. That is a very welcome and positive thing that he has done and he should not stop there. All agencies of government that are revenue generating should pay their money into the consolidated revenue account and as they present their budget, whatever expenditure they are going to incur, let them bring it before the National Assembly. That’s what the Constitution says.

“This decision that Mr. President took is the right decision. It is constitutional and it should be supported by everybody. That way, it should also apply to other agencies of government that are driving revenue. They cannot keep it. NIMASA should pay directly like NNPCL into the CRF. The Nigeria Ports Authority (NPA) should do the same. The Nigeria Customs Service and all other revenue generating agencies should pay revenues into the Consolidated Revenue Fund of the Federation and their accounts should remain with CBN because they can do banking.

“So, if they want to withdraw money, they should withdraw through the CBN. They were doing this before. Don’t go and keep people’s money in commercial banks and do transactions with it. That is it," Ndume added.

An energy expert and financial analyst, Mr. Kelvin Emmanuel, said “I think it is a good thing that the President has removed revenue collection of crude oil sales from NNPCL, even though the revenues are actually credited to the offshore account bank of the CBN."

He also suggested that the federal government needs to take further steps such as urging the NNPCL to transfer its shareholding in government-owned enterprises like WAGPCO & NLNG back to the Ministry of Finance, and a complete business process re-engineering for the State-owned company and a reassessment of the importance of its retail portfolio.

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