N7trn NNPC Debt Waiver Draws Flak

Civil Society Organisations (CSOs), lawmakers and legal practitioners have faulted the federal government’s approval of a massive debt waiver granted to the Nigerian National Petroleum Company Limited (NNPCL) involving N7.6 trillion owed to the Federation Account.

President Bola Ahmed Tinubu approved the cancellation of a substantial portion of NNPCL’s outstanding obligations to the Federation Account following a reconciliation exercise between the company and relevant government agencies. The decision effectively wiped off about $1.42bn and N5.57trn from the company’s liabilities.

Details of the approval were contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November, 2025, meeting of the Federation Account Allocation Committee (FAAC), titled: “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025”.

According to the document, NNPCL’s debts as earlier reported at the October, 2025, FAAC meeting stood at $1.48bn and N6.33trn, covering obligations related to PSC, DSDP, RA, MCA liftings and JV and PSC royalty receivables.

The presidency subsequently approved that most of the balances be removed from the federation’s records, the report said.

The NUPRC disclosed that $1.421bn and N5.57tn were written off, representing about 96 per cent of the dollar-denominated debt and 88 per cent of the naira liabilities. It said the accounting entries had already been effected in line with presidential approval.

However, the commission noted that fresh debts accumulated in 2025 remain outstanding. Obligations incurred between January and October, 2025, stood at $56.8m and N1.02tn, although $55m was recovered during the period and shared by the federation.

Civil groups described the debt waiver as ill-timed and an abuse of public trust, especially amid Nigeria’s economic challenges.

Debt waiver assault on fiscal discipline – CHRICED

The Resource Centre for Human Rights & Civic Education (CHRICED) said the federal government’s debt write-off for the NNPCL without public scrutiny, legislative approval or accountability for those responsible was “a grave assault on transparency, fiscal discipline and constitutional governance”.

CHRICED’s Executive Director, Comrade Dr. Ibrahim M. Zikirullahi, in a statement on Tuesday, said the development was a dangerous precedent in a time of revenue crisis.

He said, “The federal government’s decision to cancel 96 per cent of NNPC’s dollar-denominated debts and 88 per cent of its naira-denominated obligations effectively deprives the Federation Account of revenues meant to be shared among the federal, state and local governments.

“This fiscal giveaway comes at a time when: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is underperforming its 2025 revenue target by over N5.65trn cumulatively.

“In November, 2025, alone, NUPRC recorded a N544.76bn revenue shortfall, including a N538.92bn gap in royalty collections.

“Writing off trillions of naira in receivables amid such alarming revenue deficits is not only irresponsible—it contradicts the government’s repeated claims of plugging leakages and strengthening public finance management.”

Zikirullahi argued that Nigeria’s oil and gas sector remained riddled with unresolved scandals, saying former petroleum minister, Timipre Sylva, was recently declared wanted over the alleged diversion of $14.8m meant for refinery construction.

He said that forgiving trillions of naira owed to its sole shareholder—the Nigerian people—undermined this claim and exposed the company’s continued political insulation.

He further said, “This decision sends a troubling message to investors, development partners and credit rating agencies: Nigeria’s fiscal governance remains unpredictable, discretionary, and vulnerable to political interference.”

CHRICED called for immediate public disclosure of the full reconciliation report and justification for the debt waiver, including the roles of all officials involved; forensic audit of NNPC’s historical and current financial obligations, with findings made public and legislative intervention by the National Assembly.

NNPC debt write-off raises red flags – CISLAC

The Civil Society Legislative Advocacy Centre (CISLAC) has described the move as an abuse of public trust.

In an interview with Daily Trust, CISLAC’s Executive Director, Auwal Musa Rafsanjani, faulted the National Assembly for failing to thoroughly scrutinise audit reports and demand accountability from the state-owned oil firm, which was expected to operate transparently and on a commercial basis.

Rafsanjani said recent audit reports submitted to the legislature did not adequately interrogate NNPC’s operations despite the emergence of what he described as massive financial liabilities.

He questioned the rationale behind writing off such debts, stressing that NNPCL should not be run like a charity.

According to him, earlier audit reports around 2020 through 2024 indicated some level of improvement in the company’s performance, making the sudden appearance of huge debts and their write-off contradictory.

He also queried whether the funds had already been expended by the government, with the waiver serving as a cover.

He described the situation as even more troubling given the government’s aggressive revenue drive which had imposed additional tax burdens on Nigerians.

He said, “How can a government that is taxing citizens heavily decide not to recover such a huge amount? Something is clearly wrong.”

Rafsanjani stressed that CSOs were not merely seeking explanations, but full accountability, including recovery of the funds. He also questioned continued borrowing by the government while critical assets such as refineries remained non-functional despite claims that fuel subsidy removal had generated savings.

He further criticised what he called a pattern of corruption cases ending in negotiated settlements rather than justice, warning that officials involved in alleged financial mismanagement at NNPC must be held accountable.

He said, “The government cannot continue borrowing, taxing Nigerians, and then write off massive debts without accountability.”

Debt write-off encourages graft – CODWA

The Community Outreach for Development and Welfare Advocacy (CODWA) criticised the federal government over the reported debt write-off involving the NNPCL, warning that the move could encourage corruption.

CODWA’s Executive Director, Comrade Taiwo Otitolaye, accused the Tinubu administration of promoting graft instead of confronting it.

He argued that rather than conducting a comprehensive audit to identify, arrest and prosecute those responsible, the government had effectively endorsed the looting of public resources.

He said, “These amounts are too huge to be classified as irrecoverable in a country facing an economic crisis like Nigeria.”

He warned that the decision could harm Nigeria’s credibility with international creditors and weaken prospects for economic growth and sustainable development, urging the government to reverse the move if it is serious about fighting corruption.

Similarly, Musa Aliyu, Director of the Media Advocacy and Technologies Centre, described the debt waiver as unfortunate and insensitive given the hardship Nigerians were currently enduring due to ongoing economic reforms.

He said waiving such a huge sum for a government agency at a time of widespread suffering reflected double standards in governance and deepened public distrust.

Aliyu called for a thorough investigation into how the debt was accumulated, questioning where the money went and who benefited from it, arguing that the development further exposed structural flaws within the NNPCL and underscored the need for a complete overhaul of the company.

He added, “No country can survive under the present arrangement called NNPCL.”

It raises constitutional questions – Yiaga Africa

Samson Itodo, Executive Director of Yiaga Africa, said the development raised critical constitutional questions, particularly whether the constitution empowered the president or the federal government to take unilateral actions on debts owed to the federation.

He also questioned whether the legislature was not required to deliberate on and approve such a decision before it was implemented.

He said, “Or is it merely a pronouncement that will have no effect until the National Assembly legislates on it? We must be conscious of the relevant constitutional provisions.”

Itodo added that he would continue to study and monitor the issue with the expectation that relevant stakeholders would provide clarity in the coming days.

President needs N/Assembly’s approval – Senator Umeh

Senator Victor Umeh (LP, Anambra Central) said the National Assembly would carefully scrutinise any proposal to waive debts, stressing that liabilities arising from “fraudulent practices” must not be written off.

Umeh told Daily Trust that lawmakers would first need to examine the composition and origin of the debts before taking a position.

He said, “We need to see the make-up of the debts. The country cannot write off debts accumulated through fraudulent practices.

“We shall await the details before taking a proper decision. The National Assembly must consider the request for the waiver, if made by the President, before any decision can be taken.

“The president cannot make such a waiver without the approval of the National Assembly.”

Dayo Akinlaja (SAN) described the move as an obvious breach, stressing that the debt in question ought to have been remitted into the Federation Account.

He said any challenge to the action should not be left to state governments alone, noting that CSOs and other interested groups also had the standing to contest it in court. (Daily trust)