Nigeria’s oil governance has again come under public scrutiny following President Bola Ahmed Tinubu’s approval of the write-off of about $1.42 billion and N5.57 trillion in legacy debts owed by the Nigerian National Petroleum Company, NNPC, Limited to the Federation Account. According to the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, October 2025 Revenue Collection Report, presented at the Federation Account Allocation Committee, FAAC, meeting of November 18, 2025, the Presidency approved the removal of these liabilities from the Federation’s books after a reconciliation exercise conducted by a Stakeholder Alignment Committee.
The write-off reportedly accounts for 96 per cent of the dollar-denominated debt and 88 per cent of the Naira liabilities.
On the surface, this might seem a commendable effort at the reconciliation of indebtedness between NNPC Ltd and the Federation as well as improve the credibility of NNPC’s financial statements in the eyes of investors.
But the timing of this decision is wrong as the country is grappling with fiscal distress and the government’s aggressive revenue drive.
States are struggling to meet basic obligations amidst revenue shortfalls, while citizens are being asked to endure painful economic reforms. So, justifying the writing off of trillions of Naira owed to the Federation is difficult.
It contradicts the administration’s repeated assurances of fiscal discipline, revenue optimisation and a determined effort to plug leakages in public finance. The decision of the Presidency not only contradicts government’s repeated claims of plugging leakages and strengthening public finance management, but the write-off risks legitimising years of under-remittance, weak oversight and institutional failure.
For decades, NNPC has been at the centre of allegations of under-remittance, weak oversight and blurred lines between commercial and government functions. So, writing off debts without a clear public accounting of how they arose risks reinforcing a culture of impunity and moral hazard.
It bears repeating that the funds written off belong to the Federation, and ultimately to the Nigerian people.
Of equal concern too is the absence of the National Assembly in the issue of this magnitude. There has been no public indication that the National Assembly debated or approved this debt waiver.
This raises constitutional questions, as revenues due to the Federation Account are not discretionary funds that should be written off without due process and legislative oversight. Nigerians deserve answers. Who authorised these obligations? Who benefited from them? And what mechanisms are now in place to ensure that such liabilities do not reoccur?
Fiscal discipline cannot be selective; it must apply as firmly to state-owned enterprises as it does to ordinary citizens and private businesses.
If the debt write-off is to be defended as a reform measure, it must be accompanied by firm governance safeguards: regular independent audits of NNPC Ltd, full public disclosure of its financial operations, strict enforcement of remittance obligations and clear sanctions for future defaults.
Reform must not become a euphemism for perpetual absolution. Ultimately, the Tinubu administration must recognise that public trust is as vital as technical correctness. Cleaning up the books may be necessary, but restoring confidence requires transparency, accountability and a clear break from the opaque oil governance of the past.
Without this, the debt write-off risks being perceived not as reform, but as yet another costly indulgence Nigeria can ill afford.
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