Tinubu Wipes Out N7.2 Trillion NNPC Legacy Debt Amid Growing $42 Billion Revenue Dispute
In a significant move to resolve long-standing fiscal friction, President Bola Tinubu has approved the cancellation of approximately $1.42bn and N5.57tn in legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC) to the Federation Account. This directive, revealed in a report presented by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at the November 2025 meeting of the Federation Account Allocation Committee (FAAC), effectively wipes out nearly 96% of the company’s dollar-denominated debt and 88% of its naira obligations as of December 31, 2024.
The decision followed a detailed reconciliation exercise conducted by the Stakeholder Alignment Committee. By clearing these “legacy balances,” the administration intends to provide a clean slate for the national oil company, though the NUPRC confirmed that fresh liabilities incurred during 2025—totaling over $1.8m and N1.02tn—are still being tracked for recovery.
Fiscal Impact and Revenue Challenges
The debt cancellation comes at a difficult time for the nation’s finances. The NUPRC report highlighted severe revenue shortfalls in late 2025:
• Monthly Shortfall: In November 2025, actual collections stood at N660.04bn, a massive deficit against the monthly target of N1.204tn.
• Royalty Deficit: Royalty payments, the primary driver of upstream revenue, brought in only N605.26bn for November, falling short of the N1.144tn projection.
• Cumulative Gap: As of November 30, 2025, the cumulative revenue gap for the year reached N5.65tn, reflecting a struggle to meet the approved annual target of N13.25tn.
The Ongoing Conflict Over $42bn Under-Remittance
While the Presidency has cleared recent legacy debts, a much larger and older dispute remains unresolved. A clash has intensified between NNPC Ltd and Periscope Consulting, the audit firm hired by the Nigeria Governors’ Forum.
• The Allegation: Periscope claims that NNPC failed to remit $42.37bn (roughly N12.91tn) to the Federation Account between 2011 and 2017.
• The Defense: NNPC has formally rejected these findings, insisting that all crude oil proceeds for that period were fully accounted for and that “no outstanding amounts” exist.
• The Resolution: The FAAC Sub-Committee has mandated a joint reconciliation session to harmonize the conflicting data and finally “close out” the seven-year-old impasse.
International Scrutiny and Transparency Pledges
The World Bank recently added to the pressure, accusing NNPC Ltd of being a “key source of revenue leakages.” The bank noted that despite the full removal of fuel subsidies, the company has only been remitting 50% of the resulting revenue gains to the Federation, using the remainder to offset past arrears.
In response to these persistent concerns, NNPC Group Chief Executive Officer Bayo Ojulari has consistently pledged to entrench a new era of transparency. He maintained that the company’s books would be fully open to scrutiny and compliant with the fiscal rules of the Petroleum Industry Act (PIA).
