Nigeria’s opposition African Democratic Congress has leveled serious charges against President Bola Ahmed Tinubu, claiming his recent approval to erase billions in debts owed by the state oil giant to the national treasury flouts the law and robs states of vital funds.
The party’s criticism centers on a presidential directive that wiped out approximately $1.42 billion and N5.57 trillion in legacy obligations from the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account. These debts, accumulated through years of complex oil sector dealings, were cleared following a reconciliation of records with regulators, covering liabilities up to the end of 2024.
In a strongly worded statement issued on January 3, 2026, by its National Publicity Secretary, Mallam Bolaji Abdullahi, the ADC described the move as an overreach of executive power. “The African Democratic Congress (ADC) is deeply alarmed by the action recently taken by President Bola Ahmed Tinubu, approving the cancellation of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account,” Abdullahi stated. He highlighted that nearly 96 percent of the dollar-denominated debts and 88 percent of the naira balances were removed without parliamentary consent, calling it a “serious constitutional breach.”
The Federation Account, established under Nigeria’s revenue-sharing framework, pools national earnings—primarily from oil—for distribution among federal, state, and local governments. This system has roots in the country’s federal structure, dating back to pre-independence fiscal arrangements but formalized in successive constitutions to ensure equitable resource allocation amid regional tensions over oil wealth.
Section 162 of the 1999 Constitution, as amended, mandates that all revenues collected by the federal government, including those from petroleum operations, must flow into this account. Subsection 1 requires the maintenance of the Federation Account for depositing such funds, while subsequent provisions outline formulas for disbursement, emphasizing that no tier of government can unilaterally alter inflows without legislative oversight. Legal experts have long interpreted this as a safeguard against federal dominance, particularly in oil-dependent Nigeria, where states in the Niger Delta and elsewhere rely heavily on these allocations for development.
The debts in question stem from a tangled history of NNPC’s operations. For decades, the corporation has grappled with under-remittances to the Federation Account, often due to fuel subsidy payments, production sharing contract disputes, and royalty shortfalls. Official records show that by October 2025, NNPC’s payables to the federation stood at over N4.7 trillion, including subsidy-related claims. The Petroleum Industry Act of 2021, which transformed NNPC into a commercial entity, aimed to address such inefficiencies, but legacy balances persisted, fueling debates over transparency in the oil sector.
Government sources, as reported in documents presented to the Federation Account Allocation Committee (FAAC), maintain that the cancellation followed a thorough audit and reconciliation process involving sector regulators. This, they argue, resolved longstanding disputes and cleared the books for more efficient operations. However, the ADC dismissed this rationale, insisting it cannot supersede constitutional mandates. “This purported justification of ‘reconciliation’ cannot lawfully override the constitutional requirements for revenue sharing,” the party’s statement read. “The Federation Account is not subject to executive discretion; no President has the unilateral authority to cancel constitutionally due revenues.”
The opposition group further lambasted the National Assembly for its silence, suggesting it amounts to “active collusion or wilful surrender.” Abdullahi warned that such actions could erode public trust in fiscal governance, especially at a time when states are pressing for greater autonomy in resource management. “As a nation of laws, and not of men, no President can override what the Constitution protects,” he added.
This development comes amid broader scrutiny of Nigeria’s oil revenue management. In recent years, audits by bodies like the Nigeria Extractive Industries Transparency Initiative have repeatedly flagged discrepancies in NNPC’s remittances, attributing them to opaque contracts and subsidy regimes. The removal of fuel subsidies in 2023 under Tinubu’s administration was intended to boost federation inflows, yet fresh debts from 2025 operations remain unresolved, according to FAAC reports.
