Restructuring: States to Control Exploration of Their Oil and Other Natural Deposits

The state governments of Nigeria are expected to gain greater control over the exploration of oil and other natural resources if a bill seeking amendments to certain provisions of the 1999 Constitution overcomes all hurdles. This proposed legislation, sponsored by Speaker Tajudeen Abbas along with three other lawmakers, aims to grant states increased autonomy over the exploration, management, and revenue generation of natural assets such as oil fields, minerals, and natural gas.

The bill specifically seeks to transfer the control and exploration of these resources from the Exclusive Legislative List to the Concurrent Legislative List as outlined in the Constitution. If enacted, this shift would enable states to regulate resource extraction, issue mining and oil exploration licenses, and collect revenues independently, potentially ushering in a new era of localized resource management that could lead to a more equitable distribution of revenues and greater accountability at the state level.

This development comes years after a similar bill stalled at the second reading due to concerns that decentralization might create disparities among states, particularly between oil-rich regions and those with fewer natural deposits. The current bill has advanced further in the legislative process, having been referred to the Committee on Constitutional Amendment and is expected to return for a third reading if it receives the necessary approvals.

This legislative effort is part of a broader initiative by the National Assembly to amend Nigeria’s 1999 Constitution—a document that has guided the nation for nearly three decades. Several other bills have also passed the second reading in both chambers, indicating a wider push to modernize Nigeria’s constitutional framework. While proponents argue that these reforms will enhance state autonomy and local governance, improve the management of natural resources, and foster balanced economic development, critics warn that without robust regulatory mechanisms, decentralization could exacerbate regional inequalities and lead to administrative challenges.

As the bill awaits further deliberation, stakeholders including industry experts, policymakers, and civil society groups are closely monitoring the process. The outcome of this legislative initiative could have far-reaching implications for Nigeria’s economic landscape, potentially redefining the relationship between the federal government and the states in the management of the country’s natural wealth.