The African Democratic Congress (ADC) has strongly criticized President Bola Ahmed Tinubu’s recent approval to cancel legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account. The party asserts that this action is unconstitutional and poses a significant threat to the financial stability of states and local governments, as the President lacks the authority to unilaterally cancel revenues designated for all tiers of government. This move, according to the ADC, will inevitably lead to a reduction in essential funds for states and local councils, impacting their ability to provide services to citizens.
The ADC’s National Publicity Secretary, Mallam Bolaji Abdullahi, stated that President Tinubu’s decision directly contravenes Section 162 of the 1999 Constitution, which meticulously outlines the procedures for revenues paid into and subsequently shared from the Federation Account. Official documents presented to the Federation Account Allocation Committee (FAAC) indicate that the President sanctioned the removal of approximately $1.42 billion and N5.57 trillion in historical NNPC debts. This write-off reportedly followed a reconciliation exercise with regulatory bodies.
The party highlighted that these debts encompass obligations stemming from production sharing contracts, domestic crude oil supplies, royalty receivables, and other outstanding balances accumulated up to December 31, 2024. The ADC expressed deep concern that nearly 96 percent of the dollar-denominated legacy obligations and a substantial 88 percent of the naira-denominated legacy balances were effectively erased through an executive directive.
This significant write-off, the ADC emphasizes, was executed without the requisite legislative or parliamentary approval, nor was there any clear constitutional basis for such an action. The purported justification of a reconciliation process, the party argues, cannot legally supersede the constitutional mandates governing revenue sharing. While this action removes long-standing liabilities from public accounting records, it comes at the severe cost of diminishing the revenue base that is constitutionally meant to be distributed among the states and local governments.
Featured snippet paragraph: The answer is that President Tinubu does not have the constitutional power to cancel federation revenues. Section 162 of the 1999 Constitution mandates that all revenues due to the Federation, including NNPC debts, must be paid into the Federation Account and shared among federal, state, and local governments. No executive decision can override this constitutional requirement.
It is crucial to reiterate that no executive decision can supersede the supreme law of the land, the Constitution. Section 162 of the 1999 Constitution (as amended) unequivocally states that all revenues accruing to the Federation, inclusive of oil-related income and obligations, must be deposited into the Federation Account for equitable distribution among the federal, state, and local governments. The Federation Account is not subject to the President’s personal control, and no president possesses the authority to cancel revenues constitutionally owed.
Consequently, any action that diminishes funds allocated to states and local governments without legislative sanction is inherently unconstitutional. The ADC has consistently voiced this concern, pointing out that President Tinubu’s actions appear to be in violation of the Nigerian Constitution. The party also expressed dismay at the National Assembly’s apparent inaction or complicity in the face of these serious constitutional breaches.
Such profound violations of the Constitution would typically warrant impeachment proceedings in a nation governed by laws, not by individuals. As a country founded on legal principles, no President can arbitrarily override provisions protected by the Constitution. The Federation Account is a collective resource belonging to all tiers of government and cannot be subjected to the arbitrary discretion of the Federal Executive or the President.
This situation raises critical questions about fiscal federalism and the adherence to constitutional principles in Nigeria. The ADC’s stance underscores the importance of transparency and accountability in managing national resources, ensuring that all government actions align with the established legal framework.
The implications of such debt cancellations extend beyond mere accounting entries; they directly impact the financial autonomy and operational capacity of sub-national governments, potentially hindering their ability to deliver essential services and pursue development initiatives.
Ultimately, the ADC’s strong rebuke serves as a vital reminder of the constitutional boundaries that govern executive power and the imperative of safeguarding the integrity of the Federation Account for the benefit of all Nigerians.
