NNPC Debt: Tinubu has no power to cancel federation revenue – ADC

The African Democratic Congress (ADC) has faulted President Bola Ahmed Tinubu’s approval of the cancellation of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account.

The ADC described the action as unconstitutional and harmful to states and local governments.
The party said the President lacks the constitutional power to cancel revenues that belong to all tiers of government, warning that the move would reduce funds meant for states and local councils.

In a statement issued by its National Publicity Secretary, Mallam Bolaji Abdullahi, the ADC said the decision amounted to a clear violation of Section 162 of the 1999 Constitution, which governs revenue paid into and shared from the Federation Account.
According to the party, official documents presented to the Federation Account Allocation Committee (FAAC) showed that the President approved the removal of about $1.42 billion and N5.57 trillion in legacy NNPC debts from the Federation Account records after what was described as a reconciliation exercise with regulators.

The ADC noted that the debts covered obligations arising from production sharing contracts, domestic crude supply, royalty receivables and other outstanding balances accumulated up to December 31, 2024.
“The ADC is especially concerned that nearly 96 percent of the dollar denominated legacy obligations and 88 percent of the naira denominated legacy balances were written off by executive directive. 
“This write off was done without legislative or parliamentary approval or clear constitutional authority. This purported justification of reconciliation cannot lawfully override the constitutional requirements for revenue sharing. 

“The action effectively removes longstanding liabilities from public accounts, but at the cost of reducing the revenue base constitutionally distributable to States and Local Governments,” the statement reads in part.
According to ADC, it is important to stress that no executive decision can override the Constitution. 
“Section 162 of the 1999 Constitution (as amended) makes it clear that all revenues due to the Federation, including oil-related income and obligations, must be paid into the Federation Account and shared among the federal, state and local governments. 

“The Federation Account is not under the control of the President, and no president has the power to cancel revenues that are constitutionally due. Any action that cuts the funds meant for states and local governments without approval from the legislature is therefore unconstitutional,” it added.
The party said it had made this point repeatedly, insisting that President Tinubu has continued to act in ways that violate the Constitution of the Federal Republic of Nigeria. 
It added that even more disturbing is what it described as the National Assembly’s apparent cooperation or failure to act in the face of these actions. 
According to the party, such serious violations of the Constitution would normally be enough to trigger impeachment proceedings.
“As a nation of laws, and not of men, no President can override what the Constitution protects. The Federation Account belongs to all tiers of government, and cannot be subject to the discretion of the Federal Executive or the President.”