N250bn NLNG row: Presidency faults Makinde, gov demands answers

The argument is about whether NLNG dividend money owed through the Federation Account is being withheld from states. Governor Seyi Makinde says each state was due N250bn, but the Federal Government delayed payment until after the 2027 elections. He says the money could fund projects and strengthen Oyo State’s economy.

The Presidency rejects that account. It calculates N250bn for 36 states as N9.0tn, before adding shares for the Federal Government, the Federal Capital Territory and 774 local councils. Because states receive 26.72 per cent of distributable revenue, it says NLNG would need to declare more than N33.68tn for states alone to receive N9tn.

The Presidency says NLNG has paid about $21.5bn in dividends over 25 years, with less than $3bn since President Tinubu took office. Makinde replies that a consultant identified an N9tn shortfall for states and local governments, and says the Federal Government accepted that report.

Dividends are distributions of a company’s profits to its shareholders. They matter here because Nigeria is a shareholder in Nigeria LNG Limited, so the government can receive part of NLNG’s earnings. The article says the Federal Government holds 49 per cent of NLNG and that dividends have been paid into the Federation Account.

NLNG earns revenue from its business, and after costs and other obligations, its owners may approve dividend payments. The article gives a major benchmark: NLNG has paid about $21.5bn in dividends to the federation over 25 years. It also reports $47.2bn paid to all shareholders since operations began, from $149.6bn in revenue.

Those payments become public revenue rather than private income for one state. They are subject to Nigeria’s revenue-sharing system. The dispute is therefore about both the amount paid and whether states and local governments received their proper shares.

The headline figure is enormous: N250bn multiplied by 36 states equals N9.0tn. That calculation excludes any allocation for the Federal Government, the Federal Capital Territory or 774 local councils. The size of the claim is why it became the central numerical dispute.

The Presidency applies the Federation Account formula. States receive 26.72 per cent of distributable revenue, so generating N9tn for states alone would require more than N33.68tn in NLNG dividends entering the account. It says NLNG has never paid $25bn in one dividend declaration, the approximate amount it associates with that total.

The Presidency also says NLNG’s entire lifetime dividend payments to the federation are about $21.5bn over 25 years. Since less than $3bn was realised under Tinubu, it argues that a single payout exceeding the company’s lifetime total cannot be correct. Makinde instead points to a consultant’s alleged N9tn reconciliation shortfall.

The Federation Account is the pool into which certain public revenues are paid before distribution among Nigeria’s levels of government. In this dispute, NLNG dividends are described as entering that account. The account matters because states and local councils do not simply receive whatever amount a company pays; the money is allocated under an agreed formula.

The article states that states receive 26.72 per cent of distributable revenue through the Federation Account Allocation Committee formula. It also identifies other recipients: the Federal Government, the Federal Capital Territory and 774 local councils. The Presidency uses this percentage to test Makinde’s N9tn claim.

The article does not provide the exact percentages for the Federal Government, the FCT or local governments. It does show the system’s practical importance: the 36 states reportedly received N4.83tn from January through June, while Oyo received N147.32bn. Any delayed or disputed payment can therefore affect multiple public budgets.

The Federation Account Allocation Committee, or FAAC, applies the formula used to divide distributable revenue. Its role matters because payments such as NLNG dividends must be shared among the Federal Government, states, local councils and the Federal Capital Territory rather than assigned entirely to one government.

The article says states receive 26.72 per cent under the FAAC formula. That percentage explains the Presidency’s arithmetic: to give the 36 states N9tn, total distributable revenue would have to exceed N33.68tn. The Presidency says such a payout is inconsistent with NLNG’s recorded dividend history.

The article does not list every FAAC percentage or describe the committee’s meeting process. It does show why reconciliation is politically important. Makinde says the Nigeria Governors’ Forum engaged a consultant to reconcile NLNG payments and found an N9tn shortfall for states and local governments. The Presidency disputes the underlying claim.

If dividend money is delayed, states may have less cash available for projects already included in their plans. Makinde said Oyo had identified projects intended to expand its economy and argued that withholding the money put political timing ahead of citizens’ needs. A delay could also force governments to postpone commitments or seek other funding.

The mechanism is straightforward: NLNG dividends enter the Federation Account, then the allocation formula determines each government’s share. If the money is missing, disputed or not distributed, states and local councils may receive less distributable revenue. The article reports that the 36 states received N4.83tn in six months, showing the scale of shared funds in state finances.

The article does not quantify any specific service cuts or project cancellations. It does show the political consequence: Makinde demands an explanation of how dividends were disbursed, while the Presidency says his claim could mislead citizens and create disaffection. Resolving the alleged shortfall would clarify future planning.

Nigeria LNG Limited earns revenue from its liquefied natural gas business. The article reports that NLNG generated $149.6bn in revenue since operations began and paid $47.2bn in dividends to all shareholders. The source does not explain the company’s production or sales process, so the business description relies on the established meaning of its name and industry.

Ownership explains the government payment. The article says the Federal Government holds 49 per cent of NLNG. As a shareholder, the government is entitled to its ownership share of dividends that the company declares, alongside other shareholders. The article also says annual payments to NNPC, its government shareholder, included $1.39bn in 2014.

The remaining ownership is held by other shareholders, so dividends are not automatically all public revenue. The government’s share is paid to its shareholder structure and is described as entering the Federation Account. The dispute concerns how those public funds were calculated and distributed after payment.