President Bola Tinubu approved the cancellation of massive debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account. This decision erased about $1.42 billion and N5.57 trillion in legacy obligations.
Officials presented these details to the Federation Account Allocation Committee (FAAC) recently.
The debts stemmed from production sharing contracts, domestic supply obligations, and royalty receivables up to December 31, 2024. Through a reconciliation process, the government wiped out nearly 96% of dollar denominated debts and 88% of naira denominated ones. Unfortunately, this move attracted immediate criticism from the opposing groups.
First U.S. Cases Reported
The African Democratic Congress (ADC) Coalition promptly criticized the president’s order. In response to the order, Bolaji Abdullahi, the spokesperson, said that the action was unconstitutional because Tinubu had no authority to nullify revenues without approval from the legislature.
Furthermore the coalition highlighted how this decision harms states and local governments. They lose out on shared funds from the Federation Account. As a result, subnational entities face reduced resources for development.
Constitutional Violations Highlighted
The ADC pointed to Section 162 of the 1999 Constitution. This section requires all federation revenues, including oil-related funds, to flow into the account for fair distribution. No executive can unilaterally cancel such debts, the group asserted.
However the coalition accused Tinubu of continuous violation of the law. The silence of the National Assembly was expressed with concern by Abdullahi. Inaction may be an indication of collusion; it may justify impeachment.
Wider Implications for Nigeria
This has highlighted the challenges faced by the federal system of government in the country. States receive funds from the federation to enable them to provide basic services. In addition, reducing the number diminishes the pace of development.
Moreover the ADC warned that Nigeria must uphold the rule of law. Leaders cannot bend rules for convenience. Citizens deserve transparency in managing national resources.
Calls for Urgent Action
The coalition urged the National Assembly to investigate promptly. They demanded a reversal of the cancellation. Lawmakers should enforce constitutional safeguards, the group stated.
In addition, the ADC called on Nigerians to demand accountability. People must pressure leaders to protect public funds. Only through vigilance can the nation prevent executive overreach.
This event highlights ongoing debates over fiscal management in Nigeria. As political tensions rise, stakeholders watch closely for resolutions.
