Knocks as Tinubu Writes off over 90% NNPC Debt

Reactions have trailed President Bola Tinubu’s approval for the major write-off of debts owed by the Nigerian National Petroleum Company (NNPC) Limited to the Federation Account, clearing over 90% of legacy obligations up to the end of 2024.

A report by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) presented during the November 2025 Federation Account Allocation Committee (FAAC) meeting revealed that the president approved wiping off about $1.42 billion and ₦5.57 trillion.

The debt cancellation covers legacy obligations up to December 31, 2024, including Production Sharing Contracts (PSC), Domestic Supply obligations, Repayment agreements, Modified carry arrangements, and Joint venture/PSC royalty receivables.

The commission said the debts earlier reported at the October 2025 FAAC meeting stood at $1,480,610,652.58 and ₦6,332,884,316,237.13 for PSC, DSDP, RA & MCA Liftings and J & PSC Royalty Receivables, respectively.

It said the Presidency has now approved the removal of the majority of those balances from the Federation’s books.

“The commission recently received a Presidential Approval to nil off the outstanding obligations of NNPC Ltd as at 31st December 2024 as submitted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation,” part of the document reads.

Giving a breakdown, the NUPRC said, “Consequently, out of $1,480,610,652.58 and N6,332,884,316,237.13, the affected outstanding obligations that have been nilled off are $1,421,727,723.00 and N5,573,895,769,388.45. The commission has passed the appropriate accounting entries as approved.”

This shows that about 96 per cent of the dollar-denominated debt and about 88 per cent of the naira-denominated obligations previously reported as outstanding were wiped out.

The debt write-off follows recommendations from the Stakeholder Alignment Committee on reconciling indebtedness between NNPC and the federation.

Analysts believe the move aims to clean up the national oil company’s balance sheet following its commercialisation under the Petroleum Industry Act (PIA). They also suggest it is a strategic step toward a potential Initial Public Offering (IPO) for NNPC, currently targeted for 2028.

However, critics query the decision of the presidency to write off the debt obligations, especially as NUPRC struggles to meet its revenue projections for the year. Earlier data released by the Commission shows that it recorded only ₦660.04 billion out of the ₦1.204 trillion approved revenue target for November 2025, leaving a shortfall of ₦544.76 billion for the month.

An X user, Slimnazi, said writing off the debt means shifting the burden to ordinary Nigerians.

He said the fund, if recovered, could have been deployed to fund critical sectors like education, healthcare and more.

“Writing off $1.42bn and ₦5.57trn of NNPC debt isn’t reform; it’s shifting the burden to Nigerians. That money belonged to the Federation Account (FG, states & LGs),” the X user stated.

Highlighting the implications of the debt cancellation, he said it means: “Less funds for hospitals, schools, roads, More pressure on already struggling states, Higher borrowing or taxes to fill the gap.”

“It also rewards years of inefficiency and poor accountability. If NNPC can rack up trillions in debt and get it erased, what incentive is there to run it transparently? At a time when citizens are told to ‘endure hardship’, forgiving a state monopoly’s debt sends the wrong signal: sacrifice for the people, relief for institutions. Without clear reforms, audits, and consequences, this is not economic management; it’s a moral hazard at a national scale.”

Another X user, Mazi Obi, said the act is another way of encouraging corruption, looting and incompetence.

“This is just enablement for more inadequacies, looting, and incompetence.

“Why did the debt pile up in the first place? No accountability whatsoever?” he asked.

Another X user, Yemi AK, queried why the presidency hurried to write off the debt without investigating what led to such a huge debt.

“There is no other name for this than embezzlement. The written-off debts are presently in some people’s accounts as savings. Ordinarily before you write off such huge debt, there is a need to investigate what led to such huge debt and make your investigation public,” the user wrote.

Queen Eve said it was easy to write off $1.42 billion and ₦5.57 trillion written off, but fuel subsidy was “unsustainable”.

Some other users describe the NNPC as a liability and urge President Tinubu to privatise the company, asserting that it will ensure transparency and accountability.

What remains in the books?

2025 Obligations: The NUPRC emphasised that the cancellation does not cover new debts. According to the document, approximately $56.8 million and ₦1.02 trillion in fresh liabilities accrued between January and October 2025 are still being tracked for recovery.

The $42 Billion Dispute: This write-off does not resolve a separate, older dispute regarding an alleged $42.37 billion in under-remittances between 2011 and 2017, which the NNPC continues to deny.

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Victor EZEJA

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Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X