FG Cancels $1.42bn and N5.57tn NNPC Debt to Federation

President Bola Tinubu approved the cancellation of $1.42 billion and N5.57 trillion in debts owed by the Nigerian National Petroleum Company Limited to the Federation Account. The decision followed recommendations from the Stakeholder Alignment Committee on reconciling indebtedness between NNPC Ltd and the Federation. It covered royalty and lifting-related liabilities up to December 31, 2024.

The Nigerian Upstream Petroleum Regulatory Commission confirmed the presidential approval in a report presented at the Federation Account Allocation Committee meeting on November 18, 2025. Out of original outstanding amounts of $1.48 billion and N6.33 trillion, authorities wrote off $1.42 billion and N5.57 trillion. This represented about 96 per cent of the dollar debt and 88 per cent of the naira obligations.

Fresh debts from January to October 2025 stood at $56.81 million and N1.02 trillion. In November 2025, NNPC recovered $55 million from the dollar component, leaving a small balance. The NUPRC passed accounting entries to reflect the nilled-off obligations.

The write-off resolves long-standing disputes over NNPC’s legacy indebtedness. It includes clashes over alleged under-remittances dating back to 2011-2017. NNPC maintains all due revenues were properly accounted for.

Revenue collections faced shortfalls in 2025. November figures showed N660.04 billion against a N1.204 trillion target, with cumulative gaps reaching N5.65 trillion. The World Bank has criticised NNPC for revenue leakages affecting fiscal transparency.

Experts view the cancellation as addressing flaws in the pre-Petroleum Industry Act regime. It aims to clear historical burdens while ongoing reconciliations continue for current liabilities.

As Nigeria grapples with revenue challenges, this move seeks to reset relations and boost trust in federation account management.