By Bukar Mohammed, Kano
The Federal Government’s recent decision to write off roughly ₦7 trillion in debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account is not just puzzling, it is deeply troubling. At a time when the country is grappling with shrinking revenues, mounting debt-service obligations, and widespread social strain, such a move raises serious questions about fiscal discipline, constitutional order, and the government’s commitment to transparency.
A detailed press statement issued on December 29, 2025, by the Resource Centre for Human Rights & Civic Education (CHRICED) provides a compelling basis for public scrutiny. Far from being a routine accounting adjustment, the debt cancellation represents a consequential policy decision with long-term implications for Nigeria’s already fragile public finance system.
A Write-Off That Defies Economic Sense
According to CHRICED, the Federal Government approved the cancellation of $1.42 billion and ₦5.57 trillion, amounting to about 96 percent of NNPC’s dollar-denominated liabilities and 88 percent of its naira debts to the Federation Account. These are not abstract figures. They represent revenues constitutionally meant to be shared among the federal, state, and local governments to fund salaries, healthcare, education, infrastructure, and basic public services.
What makes the decision especially difficult to justify is its timing. As CHRICED notes, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is already falling short of its 2025 revenue projections by more than ₦5.65 trillion. In November 2025 alone, revenue underperformance stood at ₦544.76 billion, largely due to a ₦538.92 billion shortfall in royalty collections.
In simple terms, Nigeria is already bleeding revenue. Writing off trillions of naira under such conditions cannot be described as prudent fiscal management. It amounts to economic self-sabotage.
Executive Fiat and the Erosion of Fiscal Federalism
Even more disturbing than the scale of the write-off is the process by which it was carried out. As CHRICED highlighted, the cancellation occurred:
- without an independent forensic audit,
- without transparent public disclosure,
- without debate or approval by the National Assembly, and
- without sanctions for officials under whose watch the debts accumulated.
This approach strikes at the heart of Nigeria’s system of fiscal federalism. Funds in the Federation Account do not belong to the executive arm alone; they are jointly owned by all tiers of government. Any unilateral decision to forgo such revenues undermines constitutional safeguards and sets a dangerous precedent for future administrations.
Oil Sector Impunity, Once Again on Display
The NNPC debt write-off fits into a familiar and troubling pattern in Nigeria’s oil and gas sector, one marked by opacity, weak accountability, and selective justice.
Over the years, allegations of over $42.37 billion in under-remittances between 2011 and 2017 have remained largely unresolved. The fuel subsidy scandal, which cost the country trillions of naira, produced only a handful of convictions while many of the principal beneficiaries escaped scrutiny. More recent allegations involving regulators and politically exposed persons have similarly generated outrage without closure.
Against this background, the debt waiver appears less like a technical necessity and more like an institutional reflex to shield powerful actors while denying citizens accountability.
The Petroleum Industry Act: Reform in Name, Not in Practice
The Petroleum Industry Act (PIA) was sold to Nigerians as a watershed reform that would turn NNPC into a commercially driven, profit-oriented entity governed by transparency and corporate discipline. Yet no genuinely commercial company expects its shareholder to routinely forgive trillions of naira in liabilities without consequences.
By writing off these debts, the Federal Government has inadvertently exposed the fragility of its reform narrative. To investors and development partners, the message is unsettling: Nigeria’s oil sector remains politically insulated, fiscally opaque, and unpredictable. This undermines confidence at a time when investment credibility is badly needed.
A Cruel Double Standard for Ordinary Nigerians
Perhaps the most painful aspect of this decision is the contrast between how the state treats powerful institutions and how it treats ordinary citizens. Nigerians are asked daily to endure higher taxes, new levies, subsidy removals, and rising living costs. States struggle to pay salaries. Local governments barely stay afloat.
Yet a government-owned company is quietly absolved of trillions in obligations.
This double standard is neither just nor sustainable. A government cannot demand sacrifice from its people while excusing monumental failures by powerful entities. Fiscal discipline loses its moral force when it is applied selectively.
Questions That Demand Answers
CHRICED has raised critical questions that remain unanswered:
- Who authorized the accumulation of these debts in the first place?
- Why was no forensic audit conducted before the write-off?
- Why was the National Assembly excluded from the decision?
- Why has no official been held accountable?
Until these questions are addressed transparently, the ₦7 trillion debt waiver will stand as a symbol of fiscal recklessness and entrenched impunity.
Conclusion: A Decision That Weakens the State
The Federal Government cannot credibly claim to be reforming Nigeria’s public finance system while endorsing opaque and discretionary write-offs of this magnitude. As CHRICED rightly argues, genuine reform requires transparency, accountability, and institutional discipline, not executive shortcuts or accounting gymnastics.
If this pattern continues, the cost will not only be measured in trillions of naira, but in the steady erosion of public trust and confidence in the state itself.
Nigeria deserves better.
Bukar Mohammed
Kano
