Tinubu’s approval of NNPC legacy balance reconciliation restores fiscal transparency – Centre

The Centre for Energy Governance and Public Finance Accountability (CEGPFA) has responded to claims by the African Democratic Congress (ADC) regarding President Bola Ahmed Tinubu’s approval of the reconciliation and removal of certain Nigerian National Petroleum Company Limited (NNPC Ltd) legacy balances from the Federation Account. Speaking at a press conference in Abuja, the centre […]

The Centre for Energy Governance and Public Finance Accountability (CEGPFA) has responded to claims by the African Democratic Congress (ADC) regarding President Bola Ahmed Tinubu’s approval of the reconciliation and removal of certain Nigerian National Petroleum Company Limited (NNPC Ltd) legacy balances from the Federation Account.

Speaking at a press conference in Abuja, the centre said the balances referenced by the ADC were long-standing legacy entries and not new revenues generated under the current administration.

Dr Julius Osagie Eromonsele, executive director of the centre, said the balances dated back several decades, with many originating before the enactment of the Petroleum Industry Act (PIA).

“It is important to note that the balances in question are not recent revenues generated under the current administration. They are long-standing legacy entries accumulated over decades, many of them arising before the enactment of the Petroleum Industry Act,” Eromonsele said.

He explained that the figures were linked to unresolved production-sharing contract issues, domestic crude supply obligations under the former fuel subsidy regime, royalty assessment differences and reconciliation gaps between NNPC, regulators and revenue agencies.

According to him, the balances had remained on the Federation Account records for years, even as audits raised questions about their accuracy, legal basis and recoverability.

Addressing concerns that the balances were removed without due process, Eromonsele said the action followed a formal reconciliation involving relevant fiscal and regulatory institutions and was presented to the Federation Account Allocation Committee (FAAC).

“Official records indicate that approximately $1.42 billion and N5.57 trillion were removed from the Federation Account books after reconciliation established that the figures were duplicated, overstated, unsupported by verifiable documentation, or no longer legally recoverable,” he said.

He added that the approval applied only to legacy balances accumulated up to December 31, 2024, and should not be interpreted as the cancellation of valid revenue.

“Reconciliation is a recognised public finance practice. It is not the same as cancelling valid revenues. Rather, it is the process of aligning records to reflect economic and legal reality,” Eromonsele said.

He further clarified that no cash was withdrawn from the Federation Account and that allocations already made to states and local governments were not affected.

“The funds in question were not sitting as cash in the Federation Account. What occurred was the correction of inherited accounting records,” he added.

On constitutional issues, the centre stated that Section 162 of the Constitution applies to revenues that are lawfully due and payable, and not to disputed or extinguished claims.

“Public finance administration requires periodic reconciliation to ensure that only valid, auditable and legally enforceable revenues are presented for distribution,” Eromonsele said.

The centre noted that maintaining realistic revenue records supports budgeting and fiscal planning at both federal and subnational levels.

It also said the reconciliation process aligns with reforms under the PIA, which repositioned NNPC Ltd as a commercially oriented entity operating under international accounting standards.

Concluding, the centre said the decision reflects an effort to address historical fiscal issues within Nigeria’s energy revenue framework.

“Addressing long-standing legacy balances reflects a commitment to improving fiscal transparency and strengthening public finance management,” Eromonsele said.

He urged stakeholders to engage constructively on the issue and support reforms aimed at enhancing accountability in the country’s public finance system.