State governments across Nigeria have called for a forensic audit of the country’s crude oil-backed borrowing arrangements, raising concerns that opaque crude-for-loan and oil swap deals could be reducing revenues accruing to the Federation Account.
The demand was made by state representatives through their commissioners of finance during the 2026 retreat of the Federation Account Allocation Committee Post-Mortem Sub-Committee, where fiscal authorities and policy experts reviewed persistent revenue leakages in the nation’s public finance system.
According to a communiqué issued at the end of the three-day retreat, participants recommended that all crude oil-backed borrowing arrangements be subjected to legislative approval, full disclosure, and independent auditing.
“All crude oil-backed borrowing arrangements should be subjected to legislative approval, full disclosure, and independent audit. Existing arrangements should be reviewed, with forensic audits conducted to restore confidence and protect future Federation revenues,” the communiqué stated.
Billions tied to crude-for-loan deals
The call for greater scrutiny follows reports that the Nigerian National Petroleum Company Limited has pledged about 272,500 barrels of crude oil per day under a series of crude-for-loan deals valued at $8.86 billion.
Data from the Nigeria Extractive Industries Transparency Initiative indicates that $2.61 billion—about 29.4 percent of the loans—has been fully repaid, while $6.25 billion remains outstanding.
However, analysis shows that only $6.97 billion has actually been disbursed from the credit facilities as of December 2023, raising questions about transparency and accountability in the agreements.
Retreat focuses on revenue leakages
The retreat was held in Enugu between February 9 and February 11 and brought together revenue agencies, fiscal authorities, and representatives from state governments.
Participants examined fiscal and administrative policies contributing to revenue leakages affecting the Federation Account, which distributes national revenue among the federal, state, and local governments.
The event was formally opened by the Governor of Enugu State, Peter Mbah, represented by the Secretary to the State Government, Chidiebere Onyia.
In his remarks, Onyia stressed the need for stronger fiscal coordination and improved transparency in the management of public finances.
Calls for stronger accountability
Also speaking at the retreat were key officials including the Chairman of the FAAC Post-Mortem Sub-Committee, Abdulazeez King, and the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Mohammed Shehu.
A keynote address was delivered on behalf of the Office of the Accountant‑General of the Federation by Rita Okolie, Director of the Federation Account.
Participants emphasised that increased transparency and independent auditing of oil-backed borrowing arrangements are critical to restoring confidence in Nigeria’s revenue management system and protecting future earnings for the three tiers of government.
