The Centre for Energy Governance and Public Finance Accountability has strongly rejected claims by the African Democratic Congress (ADC) that President Bola Ahmed Tinubu unlawfully approved the removal of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) from the Federation Account.
Addressing journalists at a press conference held on Friday at the Transcorp Hilton in Abuja, the Centre described the allegations as misleading and unfounded, insisting that the President’s action was a routine fiscal reconciliation rather than an arbitrary debt write-off.
The controversy arose from President Tinubu’s directive approving the reconciliation and removal of approximately $1.42 billion and N5.57 trillion in long-standing legacy balances from the Federation Account. According to the Centre, these figures date back several decades and consist of unresolved production sharing contract disputes, fuel subsidy obligations, royalty assessment disagreements and reconciliation gaps that predate the Petroleum Industry Act (PIA).
Executive Director of the Centre, Dr Opialu Fabian, explained that keeping such disputed entries on the Federation Account books had distorted Nigeria’s public finances and created unrealistic revenue expectations for federal, state and local governments.
“These balances are not recent revenues generated under the current administration,” Fabian said. “They are legacy entries accumulated over decades, many of them arising before the enactment of the Petroleum Industry Act.”
The Centre further clarified that the reconciliation process involved key fiscal institutions, including the Federation Account Allocation Committee (FAAC), and was limited strictly to balances recorded up to December 31, 2024. It stressed that no actual cash was removed from government allocations, as the amounts were not collectible revenues but accounting distortions that had persisted despite repeated audits.
Responding to claims by critics, including the ADC, that Section 162 of the Nigerian Constitution was breached, the Centre argued that the provision applies only to valid and payable revenues, not disputed or unverifiable claims. Retaining such figures, it said, would turn the Federation Account into a “repository for accounting fiction.”
The group noted that the reconciliation aligns with reforms under the PIA, which seek to reposition NNPC Ltd as a commercially viable entity operating under international accounting standards. By clearing legacy issues, the administration aims to improve fiscal transparency, enhance revenue predictability and strengthen trust across all tiers of government.
Official records, the Centre added, show that the removed balances were either duplicated, overstated, unsupported by verifiable documentation or no longer legally recoverable, reinforcing the need for their removal following due process.