₦airaland Forum

On December 29, 2025, President Bola Tinubu authorised the cancellation of about $1.42 billion and N5.57 trillion of outstanding obligations owed by the Nigerian National Petroleum Company (NNPC) Limited to the federation account allocation committee (FAAC).

According to a FAAC report filed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the president approved the “debt reconciliation” following a review of records by both parties.

The report showed that the NNPC owed “$1,480,610,652.58 & N6,332,884,316,237.13″ for production sharing contract (PSC), direct sale, direct purchase arrangement (DSDP), royalty arrears (RA), marginal fields current account (MCA) liftings and joint venture (JV), and PSC royalty receivables. But out of the total owed amount, the president approved the cancellation of “$1,421,727,723.00, N5,573,895,769,388.45”.


The cancelled amounts were said to have accounted for about 96 percent and 88 percent, respectively, of NNPC’s debts. Since the decision made headlines, many have questioned the legality of the president’s action.

Some have argued that, since the NNPC operates under the Petroleum Industry Act (PIA) and the president also serves as the minister of petroleum, the decision to write off the debts was an institutional process. However, concerns remain about the extent of powers the PIA vests in the president regarding oil and gas sector operations.

WHAT THE PIA SAYS ABOUT THE PRESIDENT’S POWERS IN RELATION TO OIL, GAS SECTOR

The PIA provides guidance for the operation of the oil and gas industry and also outlines the powers vested in key officials, including the president. A review of Section 3 indicates that the Act does not explicitly grant the president the unilateral powers to authorise debt forgiveness.

However, the president, referred to as ‘minister of petroleum’, holds other powers.
Under the PIA, the minister of petroleum is responsible for formulating, monitoring, and administering government policy in the petroleum industry. The minister also exercises general supervision over the sector’s affairs and operations in accordance with the provisions of the Act.

The Act vests the minister with the authority to report developments in the petroleum industry to the government, represent Nigeria in international petroleum organisations, and promote an enabling environment for investment in the sector.

The minister is also empowered to negotiate treaties or other international agreements related to petroleum on behalf of the government. Additionally, upon the recommendation of the NUPRC and its chief executive, the president grants, revokes, and assigns interests in petroleum prospecting licenses and petroleum mining leases.

He is further empowered to approve fees for services rendered by the NUPRC or the relevant regulatory authority and, based on the commission’s recommendations, may direct in writing the suspension of petroleum operations in any area.

‘THE PIA DOES NOT GRANT TINUBU EXPRESS POWER TO CANCEL NNPC DEBT’
Commenting on the issue, Ayodele Oni, partner at Bloomfield Law Practice, said the PIA does not confer express powers on Tinubu to cancel debts owed by the NNPC to the federation. He said the president’s directive can be seen as an executive adjustment following a reconciliation process, “and not as a clear constitutional or statutory write-off power”.

“At best, the decision can be viewed as administrative but not from the constitutional or PIA angle,” Oni said. “At the same time, the legal context of NNPC Limited must be acknowledged. By virtue of the Petroleum Industry Act 2021, NNPC was incorporated as a limited liability company, with its assets and liabilities transferred to it as a commercial entity wholly owned by the Federation.”

In her remarks, Vanessa-Vivian Okonta, an energy lawyer, said even though the NNPC is now a commercial entity under the PIA, it remains wholly owned by the federal government as its sole shareholder. “That means the President, as the head of the executive, effectively acts on behalf of the government in its capacity as shareholder,” she said.

“In practice, this gives the executive influence over major corporate decisions, including debt restructuring or write-offs, much like a shareholder might direct the board of a government-owned company.”

However, Okonta noted that this does not override the constitutional provisions, as debts owed to the federation account are technically owned by all tiers of government.

She added that, while the write-off may be defensible as a form of corporate restructuring under the PIA, there remains a legal debate over whether such an action can circumvent Section 162 of the 1999 constitution, which governs the joint ownership of federal revenues. “In short, the President can initiate or approve a write-off in his shareholder capacity, but the action still sits in a gray area when viewed strictly against the Constitution,” Okonta said.

THE POSITION OF NIGERIA’S CONSTITUTION
The lawyers said under the constitution of Nigeria, the president’s powers over fiscal matters are not absolute and are limited by specific constitutional provisions.

“Section 5 of the CFRN vests the executive powers of the Federation in the President for the execution and maintenance of the Constitution and all laws made by the National Assembly. However, this general executive authority must be exercised consistently with the Constitution’s detailed framework on public debt.”

Oni said public debt is expressly placed within the legislative competence of the national assembly by “Item 50 of the Exclusive Legislative List in Part I of the Second Schedule, which provides for the public debt of the Federation”.

“In addition, section 80(1) of the Constitution requires that all revenues or other monies raised or received by the Federation be paid into and form one Consolidated Revenue Fund of the Federation, while sections 80(2)–(4) stipulate that no money shall be withdrawn from that Fund except in the manner prescribed by the National Assembly..."

“The above provisions suggest that a decision that permanently extinguishes debts owed to the Federation, thereby reducing revenue that would otherwise accrue to the Consolidated Revenue Fund falls within an area constitutionally supervised by the National Assembly.”

Based on the 1999 constitution, debts owed by NNPC, being revenues accruing to the federation, cannot be unilaterally written off by the president without legislative authorisation or the concurrence of the other tiers of government. She said such action would prevent constitutionally mandated revenues from entering the federation account.

“Section 166 offers only a narrow power of set-off, limited to adjustments between the Federation and a state, and does not extend to the forgiveness of debts owed by a government-owned company,” Okonta said.

While public debate is ongoing on the matter, she added that it appears “unchecked” for a president to write off about 96 percent of NNPC’s dollar debts and about 80 percent of the naira debt.

https://www.thecable.ng/matters-arising-does-tinubu-have-the-power-to-write-off-nnpcs-debt/

PREVIOUS THREAD;
"FG Writes Off $1.42bn, N5.57tn NNPC Debt."
https://www.nairaland.com/8589208/fg-writes-off-1.42bn-n5.57tn#137943844

https://punchng.com/fg-writes-off-1-42bn-n5-57tn-nnpc-debt/ nlfpmod

How many years have those debt been accumulated? How many head managers that have managed the NNPC?

If the tracing of the money would be complicated, better to write it off and start afresh with proper monitoring.

IMF once cleared off Nigeria debt

Private individuals embezzled govt monies, then monies were appropriated for TAM for moribund refineries that were only siphoned among many with no one probed or punished. Then you woke up one day and do debt forgiveness.

Thereby enhancing the corruption in the petroleum industry. You cant just write off a federation debt domiciled with a limited company and subsidiary of govt like the NNPC.

The kinds of illegality and unconstitutionality Tinubu's have instituted in government affairs in Nigeria today is really bad. This is simply a continuation of the bastardization of state started by the Buhari's government.

Yes he's has the power.
When Oando and NNPC were making all kinds unregulated deals you all kept quiet.

Tinubu and illegality are inseparable.


A notorious drug bárón, fórgér, and crîmînál cannot be expected to follow the law.

helinues:
How many years have those debt been accumulated? How many head managers that have managed the NNPC?

If the tracing of the money would be complicated, better to write it off and start afresh with proper monitoring.

IMF once cleared off Nigeria debt

And we are fighting corruption abi

We knew you won't disappoint, was the money used for its intended purpose?? Obviously No, so why should we now follow through those who mismanaged it??

Yeye dey smell

Racoon:
https://www.thecable.ng/matters-arising-does-tinubu-have-the-power-to-write-off-nnpcs-debt/

PREVIOUS THREAD;
"FG Writes Off $1.42bn, N5.57tn NNPC Debt."
https://www.nairaland.com/8589208/fg-writes-off-1.42bn-n5.57tn#137943844

https://punchng.com/fg-writes-off-1-42bn-n5-57tn-nnpc-debt/

Oga, you should go and try understanding the meaning of the word "UNDER RECOVERY" and how it came about before asking this question. Also, note that there was a reconciliation before this debt was written off. Ask yourself, who were members of the reconciliation committee. You should stop spreading Propagandists threads. If you had done your research, you would know the the 36 state commissioners of finance are members of FAAC.

Nigeria and laws have been bastardized by this Emilokan

I think as president and Minister 🤷🏿.

He can't in real sense

Ordinarily, it should be no. But the present house of reps and Senate are worse than useless.

He does not.


These are part of the crimes Tinubu has committed as President.

Abuse of Presidential powers.


If the next President after Tinubu fails to send him to jail, then I will lose hope in Nigeria ever getting better because we cannot continue to allow these crooks and criminals parading themselves as Presidents of Nigeria go scold free after abusing their office as Presidents, only for them to be allowed to retire peacefully in one European hospital like Buhari, this has to stop for future Nigerian Presidents to wake up.



Tinubu needs to retire in a maximum security prison to serve as warning to future Presidents of Nigeria that it's no longer the way it used to be

Those money were stolen by people without accountability. Now the have stolen trillions and clean mouth. Our president Na Ọ̄le

Once said the legislature and judiciary are in the pocket of the executive.When a situation like this happens democracy is already murdered.

USA just dey do anyhow for the other threads. our Nigeria special forces will soon enter US and capture Donald Odogwu Trump. try us

I just dey wonder how US enter another country and captured a sitting president. is there something they not telling us

The debt was written off to start new beginning

The question is, what is NNPC trade? Govt Product
Who owns NNPC Profit? Got

So how else would NNPC get funds to pay?

President Tinubu cannot unilaterally write off NNPC’s debt, as any cancellation requires approval through proper legal and corporate channels, including the NNPC board, Ministry of Finance, and possibly the National Assembly.
Beyond that, a critical question remains: what was the debt used for, and how has it benefited the oil sector and Nigerians? Without transparency and clear accounting, it’s impossible to tell whether the funds improved production, infrastructure, or national revenue, or simply added to financial liabilities with little public value.

Shey na this Tinubu wey get accountability issues na im don impose im tax "refoam" on Nigerians

It sends wrong signals, if it was embezzled, FG should get those funds back to Government coffers.

May be he is a beneficiary.

The president has every right to offlift any outstanding to enable his administration focus on his agenda....

helinues:
How many years have those debt been accumulated? How many head managers that have managed the NNPC?

If the tracing of the money would be complicated, better to write it off and start afresh with proper monitoring.

IMF once cleared off Nigeria debt

+
The legality is the question.

JASONjnr:
The president has every right to offlift any outstanding to enable his administration focus on his agenda....

+
There exists a constitution you know?
Stop nodding yes to everything he does simply because you support him.

DelilahMakinde:
Yes he's has the power.
When Oando and NNPC were making all kinds unregulated deals you all kept quiet.

+
I can bet my left testicle you have not read either the constitution or a single law in this country before saying this.

DeepSight:
+
I can bet my left testicle you have not read either the constitution or a single law in this country before saying this.

And the right one is missing ?

DelilahMakinde:
And the right one is missing ?

+
No, I want to hold one for any contingency.
On the off chance that you have read a single law in this country.

You know you have not.

Let's just say nnpcl is a useless government agency...


Generating billions of dollars. With nothing to show for it.


This new year anything without profit in your life... cut it off!

Tinubu did not single handedly write off the debts. It was the debts NNPCL was owing to the federation and it took the agreement of the Governors of the federation and the FG to write off the debts. If you owe me money and I decided to forgive you and write it off, why should anyone have an headache with that?

Too many ignorant comments here.

Putindbutt:
Tinubu did not single handedly write off the debts. It was the debts NNPCL was owing to the federation and it took the agreement of the Governors of the federation and the FG to clear the debts. If you owe money and I decided to forgive you and write it off, why should anyone have an headache with that?

Too many ignorant comments here.

Blame bad reportage.
Headlines should have read Tinubu , FAAC or Tinubu , 36 governors write-off NNPC debt.

helinues:
How many years have those debt been accumulated? How many head managers that have managed the NNPC?

If the tracing of the money would be complicated, better to write it off and start afresh with proper monitoring.

IMF once cleared off Nigeria debt

If it were to be another political party will you yarn this rubbish you yarn, ehn data boy?

DeepSight:
+
There exists a constitution you know?
Stop nodding yes to everything he does simply because you support him.

My brother, the constitution gives the president certain powers to mandate this kind of right...

Mind you, he decides how to run his administration.

If he's offsetting these debts, he has a plan and probably he knows what he's doing.

This has nothing to nodding to every policies but because we voted him and trusted his blueprints.

Point is, are you seeing results already or not?

DelilahMakinde:
Blame bad reportage.
Headlines should have read Tinubu , FAAC or Tinubu , 36 governors write-off NNPC debt.

A lot of the headlines are very misleading. That's why it's advisable to read the article and do a little study on the reports.