THE Nigerian government has commenced a forensic audit of the Nigerian National Petroleum Company Limited (NNPC Ltd) in a move aimed at strengthening oversight of oil revenue deductions and improving remittances into the Federation Account.
Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, disclosed on Friday that the audit was mandated by the Federation Account Allocation Committee (FAAC) and was already in progress. He spoke at a press briefing in Abuja where he updated stakeholders on developments in the Nigerian economy.
According to Mr Edun, the forensic review was designed to examine deductions, charges and collection costs reducing the funds ultimately shared among the Federal Government, states and local governments. The exercise is running concurrently with the implementation of a new presidential executive order directing that specific oil and gas revenues be paid directly into the federation account.
The NNPC audit has become critical as nearly $3 billion was spent on the rejuvenation of the nation’s 4 refineries under former Group Managing Director, Mr Mele Kyari, yet none is working today.
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He explained that the Federal Executive Council (FEC) had earlier constituted a subcommittee to scrutinise deductions from the federation account, particularly the cost of collection and the basis for certain charges. The objective, he said, was to ensure that only legitimate and transparently calculated expenses were netted off before revenue distribution.
Within that broader review, President Bola Tinubu has directed the immediate remittance of three revenue streams, such as management fees, frontier exploration funds and gas flare penalties, straight into the Federation Account. Mr Edun clarified that this directive did not override or prejudice any legislative or institutional processes currently underway at the National Assembly or other oversight bodies.
Instead, he described the move as complementary to ongoing reforms focused on improving the accuracy, transparency and accountability of oil revenue flows. A joint committee comprising representatives of the federal and state governments has been set up to ensure seamless implementation of the directive and is scheduled to meet next week.
The combined effect of the forensic audit and the executive order, Edun noted, was expected to bring clarity to long-standing debates over alleged remittance backlogs and disputed deductions. For years, questions have trailed the scale of revenue retained by oil-sector agencies and the timing of transfers to the federation account, making this audit a critical step in rebuilding fiscal trust among the tiers of government.
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Placing the development within the context of wider economic reforms, the minister stressed that Nigeria must intensify domestic resource mobilisation amid elevated global interest rates and constrained fiscal space. He warned that excessive reliance on debt, particularly borrowing that does not generate self-liquidating returns, risked crowding out vital public spending.
Heavy debt service obligations, he said, were limiting government capacity to fund health, education and infrastructure. Strengthening revenue collection and plugging leakages, therefore, remain central to the administration’s fiscal strategy.
On transparency, Mr Edun revealed that the government was deploying a unified technology platform across ministries, departments and agencies (MDAs) to enhance visibility over revenue flows. The platform will allow real-time tracking of assessments, payments and outstanding liabilities, ensuring that what is due to government is fully captured and accounted for.
He announced that cash payments for government services will be discontinued from February 20, describing manual cash handling as outdated and incompatible with modern public finance management. The transition to digital collection systems, he said, was part of efforts to curb leakages and eliminate discretionary practices.
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Addressing concerns about the cost of collection by certain agencies, Mr Edun pointed to existing financial regulations and the Fiscal Responsibility Act, which limited the proportion of revenue agencies can retain. He noted that bodies such as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) were restricted to spending no more than 50 percent of their collections, with surpluses required to be remitted to government.
Beyond oil sector reforms, the minister disclosed that government was engaging private equity investors over the application of capital gains tax, acknowledging concerns that abrupt capital exits could destabilise financial markets. Sustained dialogue, he said, was essential to encourage long-term, job-creating investments while safeguarding fiscal interests.
He also indicated that no revenue-generating public asset was off limits to credible investors willing to propose concession or partnership arrangements, including airports, seaports and other infrastructure.
On social protection, Mr Edun said 9.1 million households had benefited at least once from the direct benefit transfer programme. An additional 1 million households are set to receive payments, while about five million more will be covered before the current phase concludes.
