President Bola Tinubu has approved the cancellation of a large portion of debts owed by the Nigerian National Petroleum Company Limited NNPC Ltd to the Federation Account wiping off about 1.42 billion dollars and 5.57 trillion naira after a reconciliation exercise.
The approval was contained in a report prepared by the Nigerian Upstream Petroleum Regulatory Commission NUPRC and presented at the November 2025 meeting of the Federation Account Allocation Committee FAAC. The reconciliation covered NNPC Ltd obligations up to December 31 2024.
According to the report outstanding debts earlier put at 1.48 billion dollars and 6.33 trillion naira were reviewed and most of the balances were approved to be removed from the Federation’s books following recommendations by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness.
As a result about 96 percent of the dollar denominated debt and 88 percent of the naira obligations were cancelled. The NUPRC confirmed that the necessary accounting entries have already been made in the Federation Account.
Despite the clearance of legacy debts fresh obligations incurred between January and October 2025 remain. These stand at about 56.8 million dollars and 1.02 trillion naira although part of the dollar amount has been recovered leaving a balance of roughly 1.8 million dollars.
The development resolves long standing disputes over NNPC’s historical liabilities but comes amid declining revenue performance by the regulator. For November 2025 actual revenue collections fell significantly below target with notable shortfalls in oil and gas royalty payments.
Meanwhile disagreements persist over an alleged 42.37 billion dollar under remittance to the Federation Account between 2011 and 2017. NNPC Ltd maintains that all revenues were fully accounted for while the consulting firm involved insists gaps remain. FAAC has directed both parties to continue reconciliation.
The World Bank has also previously raised concerns over transparency in NNPC revenue remittances urging stronger oversight and full disclosure. NNPC management has repeatedly pledged improved accountability and compliance with fiscal rules going forward.
