Mele Kyari: Running a Corporation Open to Public Scrutiny
Nume Ekeghe writes that given the secrecy that has for decades dogged government income and spending, the decision by the Nigerian National Petroleum Corporation under Mele Kyari to open its books, is a boost to the fight against corruption
When on February 18, 2020, President Muhammadu Buhari, declared that very soon all government financial transactions would be done in the open on account of the reforms being pursued by his administration, many scoffed.
Addressing the passing-out parade of the Detective Inspector Course 5 of the Economic and Financial Crimes Commission (EFCC) in Kaduna, Buhari said his resolve is to ensure that reforms are deepened such that there will be no hiding place for corrupt persons and proceeds of corruption.
According to him, the aim of that move was to ensure that no government financial transactions are done in secret and all are subjected to public scrutiny.
Tapping into this resolve, one of the government agencies that made the first move was the Nigerian National Petroleum Corporation (NNPC). Established in April 1977, the corporation has always nursed the ambition of becoming a world-class oil and gas company but given the way it was run for decades with it’s books closed to public scrutiny, that goal was looking far-fetched by the day.
In its 43 years of history, it’s operational structure placed higher premium on opacity rather than accountability and transparency, even when global best practices demanded such as other energy-producing nations like Saudi Arabia, Iraq and Iran designed strategies that enabled the public to monitor the operations of their national oil companies.
Year in, year out, industry watcher, stakeholders, and especially civil society organisations, kept harping on the worrisome trend of opacity, yet nothing changed as only the corporation knew how much Nigeria actually earned from crude oil and other associated businesses and it declared to the public, whatever it deemed necessary.
For stakeholders, their worry was that financial probity in the NNPC would boosting the nation’s domestic resource mobilisation efforts towards ensuring socioeconomic development of the country, as well as ensure operational discipline flows down to all the subsidiaries of the NNPC.
So when the present NNPC Group Managing Director (GMD), Mallam Mele Kyari, in his maiden speech on July 8, 2019, made it stoutly clear that under his watch, the corporation’s businesses and governance code, would be accountable to the 200 million Nigerians who are the true owners of the company, it was met with derision.
But on June 12, the NNPC broke a 43-year jinx as it released its audited annual reports and financial statements for the year ended December 31, 2018.
It encapsulated the performance of 20 of its subsidiary companies operating within and outside Nigeria.
Speaking after the public disclosure of the accounts, Kyari promised to expedite actions on the corporation’s preparation and subsequent release of its 2019 audited financial statement.
As expected, the rare feat did not go unnoticed as it garnered him tonnes of accolades from industry watchers and stakeholders.
The Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Mr Waziri Adio, who described it as very good for the country’s image locally and internationally, added that having
such disclosures is good for transparency and accountability. While congratulating Kyari and team, he urged them to make this a regular practice and in open data format.
Also, recently, the Governor of Akwa Ibom State, Mr. Udom Gabriel Emmanuel, while welcoming the NNPC Board members to the Government House, Uyo, said that his membership of the National Economic Council had exposed him to the activities in the oil and gas industry, affirming that the council has noted the positive impact the crop of the management and Board of NNPC is making in the economy of the nation, particularly in respect of adherence to transparency and accountability in the petroleum sector.
Aside publishing its audited accounts recently, the new team at NNPC is treading on a new path of probity. Businesses are now conducted in a transparent and accountable manner, while Artificial Intelligence (AI) has been deployed to boost the accounting processes of its corporate headquarters, subsidiaries, companies and Corporate Services Units (CSUs). These new innovations have launched the NNPC on a new pedestal.
Taking a step further from the verbal commendation, on August 18, Extractive Industries Transparency Initiative (EITI) made the corporation one of its partner companies. This move ensured the NNPC joined a group of 65 other extractives companies, state-owned enterprises, commodity traders, financial institutions and industry partners committed to observing the EITI’s support company expectations.
To be a partner to EITI comes with conditions, all of which tallies with the transparent operational structure Kyari set out to achieve.
EITI’s supporting company expectations re- quire that NNPC- publicly declares support for the EITI Principles; promoting transparency throughout the extractive industries, helping in public debate and provision of opportunities for sustainable developments; publicly discloses taxes and payments, and publicly discloses beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors.
Others include engaging in rigorous procurement processes, including due diligence in respect to partners and vendors; delivering natural resources in a manner that benefits societies and communities; and ensuring that company processes are appropriate to deliver the data required for high standards of accountability.
EITI further listed three areas in which NNPC was expected to advance its inclination to transparency, namely: revenue and payment to government; contracts governing petroleum exploration and production, as well as consolidated group-level financial statements.
Since the new rules sit well with the operational blueprint evolved by the NNPC GMD to take the corporation to the next level, he added added that NNPC’s choice as an EITI partner company aligns strongly with its corporate vision and principles of Transparency, Accountability and Performance Excellence (TAPE), which his management team has championed since assumption of office as NNPC helmsman on July 8, 2019.
He assured that NNPC was on a trajectory towards greater transparency and would continue to collaborate with NEITI and EITI and other such bodies.
Commending the partnership, EITI Board Chairperson, Rt Hon. Helen Clark, while welcoming NNPC to the fold, noted the corporation’s enormous role in Nigeria’s economy, stating that the new status would afford the corporation the opportunity to deepen its commitment to transparency and in turn ensure that Nigerians benefit from the nation’s hydrocarbon resources.
Similarly, Nigeria’s Minister of Finance, Budget and National Planning, and a former EITI Board member, Mrs Zainab Ahmed, noted that the increased transparency in NNPC’s revenues was already contributing to improvements in Nigeria’s domestic resource mobilisation efforts.
Those with private sector orientation know that Kyari’s target-driven style is uncommon in public service; as it is bogged down by incredible bureaucracy. But as a seasoned technocrat with vast knowledge of the petroleum industry, he has obviously designed strategic ways of getting results, amid lean resources, without veering off the due process path.
Given that NNPC is the economy pillar and flagship agency in the oil and gas sector, experts noted that its new venture into accountability and transparency is one but sustaining the feat so far achieved remains paramount.
Accordingly, they suggested that a scorecard be developed and appropriate checks put in place so that there would be milestones to be tracked to ensure that the corporation does not go off course. Also, the need for sustainability cannot be overemphasised.