Tinubu's Executive Order 9 Targets Decades of NNPC Financial Opacity

President Bola Tinubu has taken a significant step toward reforming Nigeria's oil and gas sector by signing Executive Order 9, a move that strips the industry of operational opacity and aligns it more closely with the provisions of the 1999 Constitution.

The development comes against a backdrop of longstanding concerns about how the Nigerian National Petroleum Corporation—and its successor company, the Nigerian National Petroleum Company Limited (NNPCL)—have functioned as what veteran journalist Olusegun Adeniyi describes as "an ATM for dirty money."

The controversy dates back more than a decade, beginning with the revelation that $2.1 billion labelled as "security money" was withdrawn from NNPC accounts. Writing in December 2015, Adeniyi warned that the then-proposed Petroleum Industry Bill risked perpetuating the same gaps that allowed the corporation to operate with minimal accountability. His concerns proved prescient when the eventual Petroleum Industry Act (PIA) established NNPCL with what critics view as merely cosmetic changes—essentially adding "Limited" to the name without addressing fundamental structural problems.

Agora Policy, the governance think tank led by former NEITI Executive Secretary Waziri Adio, highlighted these ongoing deficiencies in an October 2024 policy paper. The organisation noted that after two years of PIA implementation, the Federation has received significantly lower revenues from the petroleum sector compared to the pre-reform period. "It is also questionable why the owner of an asset, the Federation, will receive only 40% of the profits from such assets, and sometimes receive nothing," the report stated.

Tinubu's Executive Order 9 addresses several of these transparency gaps that have plagued the sector for decades. The timing is particularly notable, coming in an election year when such reformist moves might carry political risks.

The systemic nature of the problem stretches back through multiple administrations. In a 2013 letter to then-President Goodluck Jonathan, Central Bank Governor Sanusi Lamido Sanusi (now Emir of Kano Muhammadu Sanusi II) levelled serious allegations about NNPC remittances to the Federation Account, sparking a controversy that briefly dominated national discourse.

Adeniyi, who wrote extensively about Sanusi's allegations at the time, captured the institutional attitude of the NNPC: "The corporation has never really felt it has anything to do with the federal ministry of finance; it treats the Revenue Mobilisation Allocation and Fiscal Commission with contempt."

The historical pattern, according to Adeniyi, involved the presidency treating NNPC as a slush fund for various undertakings—from security operations to regional diplomatic obligations. "If there is crisis in any state of the federation and there is need to mobilise resources for security agencies, the next thing you hear from whoever is the president of Nigeria is 'call me the GMD'," he wrote in 2014. For years, military Joint Task Force activities were reportedly funded directly by NNPC, bypassing normal budgetary processes.

The extractive sector transparency initiative launched by President Olusegun Obasanjo in 2004 attempted to address some of these concerns. Under the leadership of Mrs. Obiageli Ezekwesili, the National Stakeholders Working Group conducted the first physical, process and financial audits of payments in the upstream sector. However, cynicism within the corporation and resistance from both multinational companies and NNPC officials limited the initiative's impact.

Whether Tinubu's Executive Order 9 will succeed where previous reforms have faltered remains to be seen. The measure has drawn cautious praise from observers who had not expected transparency to rank highly on the president's agenda. For a sector that contributes the bulk of government revenue, the stakes for genuine reform could hardly be higher.