A bill seeking to amend the 1999 Constitution to transfer control of natural resources—including oil fields, minerals, and natural gas—from the federal government to individual states has scaled second reading in the House of Representatives.
The proposed amendment aims to decentralize Nigeria’s resource governance structure, granting states greater autonomy over the exploration, management, and revenue generation of natural resources within their jurisdictions. If passed into law, it would significantly alter the existing fiscal framework, where the federal government has exclusive control over key natural resources.
The bill, titled “A Bill for an Act to Alter the Provisions of the Constitution of the Federal Republic of Nigeria, 1999 to Decentralize the Governance of Natural Resources in the Federal Republic of Nigeria to transfer Mines and Minerals, Including Oil Fields, Oil Mining, Geological Surveys and Natural Gas from the Exclusive Legislative List to the Concurrent Legislative List and for Related Matters,” was sponsored by House Speaker Abbas Tajudeen and three other lawmakers.
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Under the current structure, natural resources such as oil, gas, and minerals are managed exclusively by the federal government, as stipulated in Item 39, Part 1, Second Schedule of the 1999 Constitution’s Exclusive Legislative List. This provision prevents states from directly legislating, regulating, or benefiting from resource extraction within their territories.
Essentially, only the federal government can issue mining and oil exploration licenses, regulate natural resource extraction, and collect revenue. The proposed amendment seeks to remove this exclusive power from the federal government and place it under the Concurrent Legislative List, allowing both federal and state governments to regulate and legislate over resource management.
If the bill is passed, it would mean that states can issue mining and oil exploration licenses, regulate extractive activities, and collect resource-related revenues independently, without seeking approval from the federal government.
The Economic and Political Realities That May Block the Bill
However, while proponents argue that the amendment would strengthen fiscal federalism and boost local economies, the bill is unlikely to become law due to strong opposition from states with little or no natural resources.
One of the major reasons the bill will struggle to pass is the economic disparity among states in terms of natural resource deposits. Only a handful of states, mainly in the Niger Delta, have significant mineral resources, particularly crude oil and gas, which account for the bulk of Nigeria’s revenue. This means that states that do not have substantial natural resource wealth would lose a major source of funding if the federal government ceases to control and redistribute resource revenue.
Currently, most states in Nigeria depend heavily on monthly allocations from the federal government’s revenue pool, which is largely funded by oil sales. Without this shared revenue, many states, especially those in the North and some parts of the Southwest, could struggle financially. Lawmakers representing these states will likely oppose the bill, knowing that decentralizing resource control would tilt economic power toward oil-producing states like Rivers, Bayelsa, Delta, and Akwa Ibom, while leaving other states with limited means of revenue generation.
This same pattern of opposition played out with the Presidential Tax Reform Bills, which have been widely resisted, especially by northern leaders, who argue that they would impoverish the region. The tax reform initiative, championed by the Presidential Fiscal Policy and Tax Reform Committee, aims to overhaul Nigeria’s complex tax system by introducing the derivation-based VAT model. This approach would allow states that generate more VAT to retain a larger share of the revenue, fostering economic accountability and encouraging self-sufficiency.
While the federal government has presented the reforms as a way to boost tax compliance and increase internally generated revenue (IGR), northern leaders have argued that the reforms would favor wealthier states with strong economic activities, while leaving less-developed states behind.
The same argument is expected to be used against the resource control bill, as northern lawmakers and governors would likely insist that their states would be disproportionately affected by such a policy shift.
A Long-Standing Demand for Resource Control
Despite the likelihood of failure, the bill represents a long-standing demand by oil-producing states and advocates of fiscal federalism, who argue that the current revenue-sharing formula is unjust. Oil-rich states in the Niger Delta have long pushed for greater control over the wealth generated from their land, arguing that the federal government takes too much while giving back too little.
Proponents of the bill believe that allowing states to control their natural resources would encourage local economic development, reduce conflicts in oil-rich areas, and promote competition among states. They argue that decentralization would also lead to more efficient resource management, as states would be directly responsible for ensuring their resources are extracted and used effectively.
However, similar bills have been introduced in the past and failed to progress beyond the second reading. The last major attempt to amend resource control laws in 2016 was met with strong resistance from lawmakers representing non-oil-producing states, who feared their states would become financially unstable if the federal government lost control over resource allocation.
What’s Next for the Bill?
Having passed its second reading, the bill will now move to the House Committee on Constitutional Amendment for review. If the committee approves it, the bill will proceed to a third reading before being sent to the Senate for concurrence.
However, for the amendment to become law, it must secure approval from two-thirds of the House of Representatives, two-thirds of the Senate, and two-thirds of Nigeria’s 36 State Houses of Assembly, as required under Section 9 of the 1999 Constitution for constitutional amendments.
Given the strong regional divide on resource control and fiscal policies, the bill faces an uphill battle. While it highlights growing frustrations with Nigeria’s centralized economic system, it is unlikely to gain the broad support needed to pass, as the majority of states stand to lose more than they would gain.