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The South-South Governors Forum (SSGF) has thrown its weight behind President Bola Ahmed Tinubu’s Executive Order mandating the direct remittance of all oil and gas revenues to the Federation Account, describing the move as historic and transformative for Nigeria’s fiscal governance.
Chairman of the Forum and Governor of Bayelsa State, Senator Douye Diri, in a statement issued on Wednesday, said the governors of the oil-rich region received the decision with optimism, noting that it signals a decisive step toward restoring constitutional order and transparency in the nation’s petroleum revenue management.
The Forum stated that the Executive Order was comprehensive, clear, and reassuring, adding that it rekindles hope that after years of opaque deductions and complicated remittance structures, the federal, state, and local governments would begin to receive their full statutory allocations from the Federation Account without undue encumbrances.
According to the statement, the South-South region particularly welcomed the provision that eliminates opaque deductions and effectively removes the controversial 30 per cent Frontier Exploration Fund previously managed by the Nigerian National Petroleum Company Limited, which often resulted in substantial idle cash balances.
The Forum further noted that mandating all operators and contractors under Production Sharing Contracts to remit Royalty Oil, Tax Oil, and Profit Oil directly to the Federation Account would significantly curb revenue leakages and enhance accountability in the oil and gas sector.
“This decision represents a positive shift towards fiscal justice for sub-national governments, especially oil-producing states. It also holds the potential to increase available resources for critical infrastructure, healthcare delivery, education, and other essential services across the three tiers of government,” the statement added.
The governors also expressed satisfaction with President Tinubu’s commitment to undertake a comprehensive review of the Petroleum Industry Act (PIA), describing it as evidence of a responsive leadership that prioritises national interest and stakeholder concerns.
The Forum maintained that states in the region, particularly Bayelsa, had consistently advocated for a review of the PIA, arguing that certain provisions of the Act pose long-term governance and administrative challenges.
Describing the current structure of the PIA as problematic, the governors said the Federal Government’s decision to deal directly with host communities while excluding states and local government councils from administering community funds could generate avoidable tensions.
They reiterated their call for a review of the Host Community Development Fund, urging that the allocation to oil-producing communities—reduced from the proposed 10 per cent by most states in the region to three per cent in the final Act be reconsidered.
The Forum further appealed to the Federal Government to revisit provisions that exclude states and local governments from overseeing funds meant for host communities, stressing that sub-national governments are closer to the grassroots and better positioned to ensure effective implementation.
While commending the President’s reform efforts, the South-South Governors Forum urged swift action on the proposed review to forestall potential crises and strengthen cooperative federalism in Nigeria’s petroleum sector.
