Economy
Governors Waste 13% Oil Derivation Fund—Enang
By Adedapo Adesanya
The Senior Special Assistant to President Muhammadu Buhari, Mr Ita Enang, has said it was time to revisit the allocation of 13 per cent oil derivation fund to state governments on claims that they are misapplying it.
He made this disclosure when members of the Host Communities of Nigeria, Producing Oil and Gas (HOSCON) visited his office to present a paper on the 13 per cent derivation fund and other issues bordering on the development of oil-bearing communities.
In Nigeria, there are nine oil-producing states including Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Abia and Lagos.
Mr Enang accused state governors of mismanaging the fund to the detriment of oil and gas producing communities and the development of the Niger Delta, stating that the allocation to the governors of these states is fuelling under-development and destabilizing peace in the region.
The SSA stated that as a result of the long years of neglect of the Niger Delta, it was time the allocation be revisited to ensure the restoration of lasting peace and development of these oil-producing communities.
He noted that even the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) had considered, examined and concluded that the 13 per cent derivation fund is exclusively for the host communities and that there are a misapplication and misdirection of the fund.
He said: “From the content of Section 162 of the 1999 constitution, it can be seen the natural resources are located in the different communities that host the resources, not in the state capitals or government houses of the respective states.
“Therefore, it would be inappropriate for the state governors to take the 13 per cent derivation money and apply it only for either building new governors’ lodge, buying private aircraft; increasing the number of vehicles in their convoys or doing any other things which are sometimes obscene, making the oil-producing communities angry and forcing them to disrupt crude oil and gas production.”
Mr Enang stated that it was necessary that concrete steps be taken at the federal level to redeem the oil-bearing communities from the challenges that they are faced with, noting that over the years, governors of the Niger Delta region had treated derivation funds the way they treated local government allocation.
In his words, “What ought to be done now is that the money is not given to the respective states. The governors should take the same allocation as other states of the Federation, which is the statutory allocation, taxes and Value Added Taxes, VAT; but the derivation should go for the development of the oil-producing communities; through special purpose, vehicles to be created.
“Since we have seen the way and manner the governors had utilized the 13 per cent Derivation Fund, I think it is time we go back and obey the provisions of the Constitution and cause that these monies be used for the development of oil and gas producing communities directly for their development so that this affliction would be arrested.
“If we do that, the monies we are spending on Operation Delta safe, spending on guarding oil and gas assets; spending on quelling unrest and ensuring security would be saved.”
In his remark, the Chairman of HOSCON, Mr Mike Emuh, lamented that oil and gas bearing communities had been consistently denied their rights in the area of the 13 per cent derivation fund, stating that payment of the money to the states was against the law.
He bemoaned the fact that over the last 15 years, about N20 trillion had been allocated to oil and gas producing states without any form of accountability from the governors and concrete development in the Niger Delta region.
He appealed to Mr Ita Enang to help escalate the demands of HOSCON in the area of the derivation fund, as well as in the area of ensuring the setting of a trust fund for the management of the gas flare penalty money and the award of pipeline surveillance and protection contracts to host communities.
By Adedapo Adesanya
The Senate has passed a bill to repeal and re-enact the law establishing the National Insurance Commission (NAICOM), paving the way for the regulatory agency to be renamed the Insurance Regulatory Commission (IRC).
The legislation, titled the Insurance Regulatory Commission (Establishment) Bill, 2026, was passed after the Senate considered and adopted the report of its committee on banking, insurance and other financial institutions.
The Chairman of the committee, Mr Adetokunbo Abiru, the senator representing Lagos East, who presented the report, stated that the proposed legislation was necessary because the existing National Insurance Commission Act of 1997 had become outdated and no longer reflected the realities of Nigeria’s evolving insurance industry or global regulatory standards.
According to the Senate, the decision to change the Commission’s name was informed by the need to eliminate confusion associated with the existing designation and to better reflect the institution’s regulatory mandate within Nigeria’s insurance industry.
The bill also provides legal protection for the commission and its officers against adverse claims arising from the lawful execution of their statutory duties.
However, he noted that the commission’s enabling law had become obsolete, exposing significant regulatory gaps that required urgent legislative intervention.
‘The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” the lawmaker said.
He explained that the new legislation seeks to strengthen the independence of the commission by empowering it to make regulatory decisions without undue influence in the country’s insurance sector.
According to him, the bill also enhances the commission’s authority to exchange information and collaborate with domestic and international regulatory bodies, issue regulations, guidelines, standards and directives on insurance-related matters, and intervene more effectively in financially distressed insurance companies to protect policyholders and preserve financial stability.
This marks yet another move to strengthen the country’s insurance sector following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) of 2025 and the industry-wide recapitalisation exercise, which will wrap up by July 31.
By Adedapo Adesanya
About 143 companies that successfully passed the technical and prequalification stages of the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) 2025 Licensing Round will, today, compete for 50 oil and gas blocks at the commercial bid conference in Abuja, the final stage in the allocation process for the assets.
The commission said only the prequalified companies have been invited to attend the event, which will hold at the Conference Centre of the Transcorp Hilton Hotel, Abuja, stressing that participation is strictly by invitation.
The commercial bid conference will determine the successful bidders for oil and gas assets located across Nigeria’s producing and frontier basins.
The 50 blocks comprise 16 onshore blocks and 18 shallow water blocks in the Niger Delta, one deep offshore block, three onshore blocks in the Benin Basin, four in the Anambra Basin, four in the Chad Basin, and four in the Benue Trough.
According to the commission, the winning bids will be determined through a transparent evaluation process based on clearly defined commercial parameters. These include the signature bonus offered by bidders, the proposed work programme commitment and the level of performance security provided. The final selection will be based on a weighted technical and commercial score.
The licensing round is being conducted under the provisions of the Petroleum Industry Act (PIA) 2021, which requires a transparent and competitive process for the award of petroleum assets.
NUPRC had announced the commencement of the 2025 Licensing Round on November 11, 2025, before opening the online bid portal on December 1, 2025, to enable interested companies to register and participate in the exercise.
To ensure prospective investors fully understood the requirements, the commission organised a pre-bid conference on January 14, 2026, at Eko Hotels and Suites, Lagos. The event provided detailed explanations on the licensing guidelines and bidding procedures to registered participants and other stakeholders.
Registration and submission of prequalification documents closed on February 27, 2026, while the prequalification evaluation was completed on March 16, 2026.
NUPRC disclosed that 286 companies initially submitted applications for prequalification.
Following the evaluation process, 196 companies were cleared to participate in the technical and commercial bid stages.
The prequalified 143 companies eventually submitted a total of 200 bids for the available oil and gas blocks. These companies are now set to compete at the commercial bid conference, where the financial offers will be opened and evaluated to determine the eventual winners.
The licensing round is expected to attract fresh investment into Nigeria’s upstream petroleum sector, boost exploration activities across both producing and frontier basins, increase crude oil and gas reserves, and support the country’s drive to grow production and government revenue.
It also underscores the regulator’s commitment to implementing a transparent, competitive and investor-friendly licensing regime under the Petroleum Industry Act.
By Adedapo Adesanya
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained all key monetary policy parameters following the conclusion of its two-day meeting on July 21, 2026, on Tuesday, maintaining its tight monetary policy stance to curb inflation and support macroeconomic stability.
According to the Governor of the apex bank, Mr Yemi Cardoso, who chaired the committee, the Monetary Policy Rate (MPR), which serves as the benchmark interest rate, remains at 26.50 per cent. The MPC also retained the asymmetric corridor around the MPR at +50 basis points and -450 basis points.
In addition, the Cash Reserve Ratio (CRR) for commercial banks was left unchanged at 45.00 per cent, while the CRR for merchant banks remains at 16.00 per cent. The committee also retained the CRR on non-Treasury Single Account (Non-TSA) public sector deposits at 75.00 per cent, with the liquidity ratio at 30.00 per cent.
The decision reflects the apex bank’s continued commitment to containing inflationary pressures through a restrictive monetary policy while safeguarding the resilience of Nigeria’s financial system amid ongoing macroeconomic adjustments.
By keeping all policy tools unchanged, the MPC signalled its intention to continue managing excess liquidity in the banking sector and maintain stability in financial markets.
The move is also expected to provide greater policy certainty for investors and businesses monitoring the country’s monetary policy direction.
The latest decision also means borrowing costs are likely to remain elevated in the near term as the central bank continues to prioritise price stability over monetary easing.
Analysts had expected the CBN committee to retain the rate after Nigeria’s headline inflation came in at 15.91 per cent as of June 2026, marking a slight decline from 15.93 per cent in May.
However, even as overall price growth has moderated significantly compared to previous periods, food inflation remains a persistent challenge, accelerating to 17.52 per cent in June.
