Removing the Veil from NNPC’s Operations
Emmanuel Addeh examines what appears to be a new air of transparency and accountability at the Nigerian National Petroleum Corporation (NNPC), with the seamless execution of a rash of actions, including the latest release of the national oil company’s aud
One thing several generations of Nigerians have come to associate with the Nigerian National Petroleum Corporation (NNPC), aside being an easy centre for the movement of slush funds by successive governments, has been the opaqueness of its operations.
For several decades, all efforts, though mostly facetious, to reform the national oil company and make it more accountable to the 200 million Nigerians, who are stakeholders in the corporation, had failed, expectedly. Personnel reshuffles have taken place, divisions have been structured and restructured, efforts have been made to track payments from oil and gas companies, yet only little was achieved.
Though later found to be grossly exaggerated, an allegation by a former Governor of the Central Bank of Nigeria (CBN) and ex-Emir of Kano, Muhammadu Sanusi II, that $49 billion was missing from the corporation at a point, further dented the already bartered image of the business organisation. Not surprisingly, the bad public image of the national oil company had continued to scare investors away, with decades of operational losses recorded.
Expecting the NNPC to make public detailed annual reports of its finances, was like waiting for Godot, despite top officials having made a commitment to do so, with little information in the public space on the activities of the corporation.
For 43 years of its existence, the NNPC failed to open up its operations for public scrutiny, further fuelling speculation that the organisation had become a cesspool of corruption. Indeed, although transparency and accountability remain critical in the extractive industry, which is the lifeblood the Nigerian economy because of the need to ensure prudent management of the country’s revenue sources to carry out the needed development, the N NP Chad not really achieved much in that regard.
There has been a lot of debate around the lack of accountability and organisational disclosure in the NNPC as a result of inadequate audits or poor financial reporting of the corporation.
Like one report on the corporation appropriately put it a few years before the new N NP C leadership, “scarce or inadequate information, insufficient audits, and poor financial reporting standards for public entities like the NNPC continue to undermine industry processes.”
New Air of Transparency, Accountability
However, all that seems to be changing with the new air of transparency and accountability appearing to blow through the national oil company which was established in 1977 and today, has over 20 subsidiaries.
Although it still leaves a lot to be done, the current leadership of the NNPC appears to be taking seriously the need to join other global state-run oil companies in terms of opening up its books to public scrutiny
In a move described as historic, four months ago, precisely in June this year, the NNPC under its Group Managing Director, Mallam Mele Kyari, officially released, for the first time, its audited statement of account to members of the public.
Though the corporation, it was learnt, is not statutorily required to do so, apart from sending copies of the annual statements to the presidency and the national assembly, a condition it said it had satisfied in the past, the company said the new initiative followed a resolve by the new management on the transparency of its operations.
The 43-year organisation in its 2018 audited statement made public the accounts of its listed subsidiaries, over 20 in all, including companies floated offshore for the corporation’s international business, apart from its regular Monthly Financial and Operations Report (MFOR).
The NNPC’s decision also received commendation from stakeholders, including BudgIT, a non-governmental organisation (NGO) in the country that applies technology to intersect citizen engagement with institutional improvement, describing the Kyari-led NNPC management as having blazed the trail to reduce opacity in government business.
As expected, while some of the subsidiaries made losses during the period under review, many of them however bounced back after years of negative figures to the path of profitability. The move did not only shock many Nigerians who had given up on the NNPC, but it also drew accolades from all quarters.
BudgIT said the publishing of the audited accounts of its subsidiaries and business divisions for the first time and launching of the open data segment on its website, was a measure to promote transparency in its financial operations.
The organisation, through its Communications Associate , Iyanu Fatoba , said that there was no doubt that Kyari and the NNPC management had blazed the trail by making the audited report of all NNPC’s subsidiaries available online.
“For the past four years, BudgIT, through the Extractives Consultative Forum and with support from the Natural Resource Governance Institute (NRGI), has been engaging key oil and gas stakeholders annually; including officials from the NNPC, Department of Petroleum Resources, ministry of petroleum resources, civil society organisations and private individuals.
“These engagements have centred on ways by which the NNPC can become more transparent, assume, and maintain the status of a commercially viable entity, as its consecutive losses are not sustainable in the long term.
“Afinancially viable and transparent NNPC is