The African Democratic Congress (ADC) has strongly criticised President Bola Ahmed Tinubu over his reported approval of the cancellation of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account. The opposition party described the action as unconstitutional and warned that it could seriously reduce funds meant for states and local governments across the country.
In a statement issued by its National Publicity Secretary, Mallam Bolaji Abdullahi, the ADC said the President does not have the constitutional power to cancel revenues that belong to all tiers of government. According to the party, any decision that affects money due to the Federation Account must follow the provisions of the 1999 Constitution and cannot be done by executive order alone.
The controversy centres on official documents presented to the Federation Account Allocation Committee (FAAC), which reportedly showed that about $1.42 billion and N5.57 trillion in legacy debts owed by NNPC Ltd were removed from the Federation Account records. The removal followed what was described as a reconciliation exercise between NNPC and its regulators, covering debts accumulated up to December 31, 2024.
The ADC said these debts arose from several oil-related obligations, including production sharing contracts, domestic crude supply arrangements, royalty receivables, and other outstanding balances. According to the party, these are revenues that should normally be paid into the Federation Account and shared among the federal, state, and local governments.
“The ADC is especially concerned that nearly 96 percent of the dollar-denominated legacy obligations and 88 percent of the naira-denominated legacy balances were written off by executive directive,” the statement said. “This write-off was done without legislative or parliamentary approval or clear constitutional authority.”
The party argued that describing the action as a reconciliation exercise does not make it legal. It insisted that reconciliation cannot be used as an excuse to bypass constitutional rules on revenue collection and sharing. According to the ADC, the decision may make government accounts look cleaner on paper, but it comes at a heavy cost to states and local governments that depend largely on monthly allocations from the Federation Account.
Section 162 of the 1999 Constitution clearly states that all revenues due to the Federation must be paid into the Federation Account and shared among the three tiers of government. These revenues include oil income, taxes, royalties, and other earnings collected on behalf of the country. The ADC stressed that the Federation Account does not belong to the President or the Federal Government alone.
“The Federation Account is not under the control of the President, and no president has the power to cancel revenues that are constitutionally due,” the party said. “Any action that cuts the funds meant for states and local governments without approval from the legislature is therefore unconstitutional.”
The issue has raised fresh concerns among state governments and local councils, many of which are already struggling with limited resources. Most states rely heavily on their monthly FAAC allocations to pay salaries, fund basic services, and carry out development projects. Any reduction in the size of the distributable pool could worsen their financial challenges.
The ADC also accused President Tinubu of repeatedly acting outside the limits of the Constitution. According to the party, this is not the first time it has raised concerns about what it described as executive overreach under the current administration. It warned that allowing such actions to continue unchecked could weaken Nigeria’s federal system and undermine the rule of law.
Even more troubling to the party, it said, is the role of the National Assembly. The ADC expressed disappointment at what it described as the lawmakers’ silence or cooperation in the face of what it sees as clear constitutional violations. It argued that the National Assembly has a duty to protect the Constitution and ensure that the executive arm operates within the law.
“Such serious violations of the Constitution would normally be enough to trigger impeachment proceedings,” the party said. “As a nation of laws, and not of men, no President can override what the Constitution protects.”
The debate over NNPC’s legacy debts comes against the background of ongoing reforms in Nigeria’s oil and gas sector. In recent years, the Federal Government has pushed for greater transparency and efficiency in NNPC, leading to its transformation into NNPC Limited under the Petroleum Industry Act (PIA). The new structure was meant to make the company more commercially driven while still protecting national interests.
However, the issue of unpaid debts and unclear financial records has continued to trail the company. Several reconciliation exercises have been carried out in the past to resolve disputes between NNPC, regulatory agencies, and the Federation Account. Critics argue that while reconciliation is important, it must be done openly and in line with constitutional and legal processes.
As of now, the Federal Government has not issued a detailed public response to the ADC’s claims. Supporters of the administration may argue that the reconciliation was necessary to correct long-standing accounting issues and present a clearer financial picture. However, critics insist that even good intentions must follow the law.