ADC Faults Tinubu’s Cancellation of NNPC Legacy Debts, Warns of Heavy Revenue Loss to States

 

The African Democratic Congress (ADC) has criticised President Bola Ahmed Tinubu over his approval of the cancellation of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, describing the move as unconstitutional and detrimental to the finances of states and local governments.

In a statement issued on Friday by its National Publicity Secretary, Mallam Bolaji Abdullahi, the party said the debt write-off violated Section 162 of the 1999 Constitution (as amended), which mandates that all revenues accruing to the Federation be paid into the Federation Account for distribution among the three tiers of government.

According to the ADC, official documents presented to the Federation Account Allocation Committee (FAAC) indicated that the President approved the removal of about $1.42 billion and ₦5.57 trillion in legacy NNPC debts from the Federation Account following a reconciliation exercise with relevant regulators. The debts reportedly covered liabilities arising from production sharing contracts, domestic supply obligations, royalty receivables and other outstanding balances accumulated up to December 31, 2024.

The party expressed particular concern that nearly 96 per cent of the dollar-denominated obligations and 88 per cent of the naira-denominated balances were written off through executive approval, without recourse to the National Assembly.

“The justification of ‘reconciliation’ cannot override constitutional provisions on revenue sharing,” the ADC stated, arguing that the action effectively reduced funds constitutionally due to states and local governments.

Abdullahi maintained that no president has the unilateral authority to cancel revenues payable to the Federation Account, stressing that any action which diminishes distributable revenue without legislative approval amounts to a constitutional breach.

The party also criticised what it described as the silence of the National Assembly, warning that such inaction could be interpreted as collusion or abdication of constitutional responsibility.

“The Federation Account belongs to all tiers of government and cannot be subjected to executive discretion,” the statement added, insisting that Nigeria must remain “a nation of laws, not of men.”

The ADC warned that continued disregard for constitutional provisions governing public finance could further strain intergovernmental relations and weaken fiscal federalism in the country.