World Bank report stirs fresh NNPC money debate

Nigeria's management of oil revenue has returned to the centre of public debate following new figures showing a reduction in deductions from the Federation Account. A World Bank report highlighted changes in the amount retained before revenue was distributed to the federal, state and local governments, following President Bola Tinubu's executive order on petroleum revenue.

The figures have raised questions about how much money Nigeria can make available for public spending and whether the changes will translate into better services for ordinary citizens.

The Key Figures in Plain Words

According to figures reported by The PUNCH from the World Bank's Nigeria Development Update, total deductions from the Federation Account fell from N10.1 trillion in the first half of 2025 to N8.4 trillion in the corresponding period of 2026.

This represents a reduction of N1.7 trillion, equivalent to 16.8 per cent.

The figures also show that deductions declined from 4.6 per cent of gross domestic product (GDP) to 3.4 per cent. In simple terms, a smaller proportion of the country's economic output was represented by these deductions.

Another important development concerns the money distributed among the three tiers of government. According to the report, distributed Federation Account revenue increased from N7.6 trillion in the first half of 2025 to N10.5 trillion in the first half of 2026.

That is an increase of N2.9 trillion, or 38.2 per cent.

Gross Federation Account revenue also increased from N17.7 trillion to N18.9 trillion over the same period. However, its share of GDP declined slightly from 8.0 per cent to 7.6 per cent.

These figures show why the reduction in deductions has attracted attention. More money became available for distribution, although the improvement cannot be attributed to the executive order alone.

What Changed After the Order?

President Bola Tinubu signed Executive Order 9 of 2026 on February 13, introducing changes to how certain petroleum revenues are collected and distributed.

Before the order, NNPC Limited was entitled to specified deductions from profit oil and profit gas under certain petroleum contracts. These included a 30 per cent management fee and a 30 per cent allocation to the Frontier Exploration Fund.

The order ended these specified deductions and directed that the relevant revenues be transferred to the Federation Account.

It also redirected proceeds from gas-flaring penalties away from the Midstream and Downstream Gas Infrastructure Fund and towards the Federation Account.

The intention was to make more petroleum revenue available for distribution among the federal, state and local governments.

However, it is important to understand that the reduction in total deductions had more than one contributing factor. The World Bank figures reported by PUNCH also identified a sharp reduction in refunds to subnational governments.

Therefore, the N1.7 trillion decline should not be presented as money saved exclusively through the NNPC changes.

Why Ordinary Nigerians Should Care

The Federation Account is important because it provides revenue shared among Nigeria's three tiers of government.

When more money becomes available for distribution, federal, state and local authorities have greater financial resources to meet their responsibilities.

For ordinary Nigerians, this matters because government revenue helps finance essential services and public infrastructure.

States and local governments need resources to maintain roads, improve schools, support healthcare facilities and provide access to clean water. The Federal Government also requires funding for national infrastructure, security and other public responsibilities.

However, higher allocations do not automatically mean better living conditions.

What matters is how responsibly the money is spent. If additional revenue is directed towards useful projects, properly monitored and completed, communities may experience improvements in public services.

On the other hand, poor budgeting, wasteful expenditure and weak accountability can reduce the benefits of increased revenue.

The debate is therefore not simply about how much money enters the Federation Account. It is also about whether Nigerians can see meaningful results from the resources distributed to their governments.

What Happens Next?

The reduction in deductions and increase in distributed revenue represent important developments in Nigeria's petroleum revenue management.

Nevertheless, the long-term impact will depend on how effectively the new arrangements are implemented and how governments manage the additional resources.

For Nigerians, the most important question is whether the improved revenue position will eventually lead to better infrastructure, stronger public services and more accountable spending.

The figures provide a reason to pay attention, but the real test will be what governments deliver with the money.