The Federal Government has sanctioned a transition period for oil contractors to begin making direct payments into the Federation Account, in line with the recently issued Executive Order 9 by President Bola Ahmed Tinubu.
This is intended to strengthen the management of petroleum revenues and safeguard public funds.
The decision was taken by the Implementation Committee for Executive Order 9 of 2026 following its inaugural meeting held on February 26, 2026.
In a statement issued on Monday by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who also chairs the implementation committee, the government said the transition would allow the new system to be introduced without disrupting existing contractual and financing arrangements in the oil sector.
The policy follows the Executive Order issued by President Bola Ahmed Tinubu directing that revenues from petroleum operations be handled in a way that protects public funds and strengthens the finances of the three tiers of government.
The order seeks to ensure that payments such as profit oil, royalty oil and tax oil are made directly into the Federation Account.
According to Edun, the committee agreed that the shift to the new system must be carried out carefully to maintain investor confidence while protecting Nigeria’s revenue.
“With respect to Section 2, Sub-section 3 of Executive Order 9 on direct payments by contractors into the Federation Account, the Implementation Committee agreed that this transition must be implemented in a manner that respects existing contractual and financing arrangements and maintains investor confidence,” he said.
He added that the committee has therefore approved a defined transition period before the full operationalization of the new payment system.
“For this reason, the Committee approved a defined transition period for the operationalization of direct payments by contractors of profit oil, royalty oil and tax oil into the Federation Account,” Edun said.
He explained that during the transition period, the existing payment arrangements will remain in place until detailed operational guidelines are released.
“Until the Committee issues detailed guidelines, contractors will continue to remit under the current process. During the transition period, the Committee will issue clear, standardised guidance to ensure an orderly changeover,” he said.
To ensure proper implementation, the committee also approved the creation of a technical subcommittee that will prepare the detailed framework for the transition.
According to Edun, the technical subcommittee has been given three weeks to develop the guidelines that will govern the new system of direct remittance.
