Tinubu Government Clears Majority of NNPC’s Legacy Debts, Writing Off $1.42bn and ₦5.57trn

President Bola Tinubu has approved a major fiscal move to clear longstanding legacy debts owed by the Nigerian National Petroleum Company Ltd. (NNPC Ltd.) to the Federation Account, effectively wiping off approximately $1.42 billion and ₦5.57 trillion following a comprehensive reconciliation exercise.

According to documents prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 Federation Account Allocation Committee meeting, the debts written off represented the bulk of historical obligations accumulated through production-sharing contracts, joint venture royalties and other arrangements up to December 31, 2024.

Before the adjustment, total outstanding NNPC liabilities reported to FAAC stood at roughly $1.48 billion and ₦6.33 trillion. After reconciliation, about 96% of the dollar-denominated debt and 88% of the naira-denominated obligations were removed from the federal books, giving both the government and NNPC a cleaner starting point for future accounting.

Despite the cancellation of these legacy balances, newer statutory debts incurred in 2025, including roughly $56.8 million and ₦1.02 trillion in obligations, remain outstanding and are being actively monitored.

Supporters of the move say it resolves a long-running dispute over historical claims and could improve clarity in revenue reporting. Critics, however, warn that reducing the distributable revenue pool through large write-offs may tighten allocations to states and local governments amid Nigeria’s ongoing fiscal pressures.