The Nigerian National Petroleum Corporation has gone into hiding. Normally, it shouts and goes on spending spree, fighting Nigerians with the funds that belong to them once it’s accused. State that the NNPC takes oil revenue that should go into the nation’s treasury, and it will switch into its offensive mode, attacking every accuser using sponsored TV programmes, press conferences and press releases. In spite of its spendthrift, the corporation pocketed a past administration to the point that the then governor of the Central Bank of Nigeria, Lamido Sanusi, was sacked after he accused the NNPC of holding on to what belonged to Nigerians. With new political leaders in place however, the corporation hasn’t been bold to shout back when state governors accuse it of thievery. It must mean that the NNPC knows how much its fate hangs in the balance.
After the meeting where President Muhammadu Buhari inaugurated the National Economic Council consisting of state governors the other time, the state chief executives alleged that the NNPC was taking what didn’t belong to it; a thing some of them weren’t saying for the first time anyway. Unlike in the past when the NNPC would deploy funds and embark on media attacks however, there was no whimper from the oil managers. They knew that those who made the allegations belonged to the new camp which could swing the sword, sacking anyone within the confines of the corporation’s Abuja tower that imagined he could deploy funds that belonged to all to engage in a media war and insult Nigerians, a thing the President demonstrated when he threw out the NNPC Board that had been superintending years of rot.
That gathering of the governors was not the only occasion the NNPC was challenged lately. One of the state governors from the South-South hadn’t been silent over his allegation that the NNPC had denied his state of some N10bn in revenue. The NNPC hadn’t uttered a word in response to him too. The part that amazes me was that when the man that an aide to the immediate past president informed me was considered the foremost thorn in the flesh of that past administration, Mallam Nasir el-Rufai, accused the NNPC lately, the corporation was equally mute. I took note when it became known that el-Rufai, the Governor of Kaduna State, was one of the state governors designated by NEC to look into the books of the NNPC and establish a few facts. Above everything else, the presence of el-Rufai among these selected governors was, for me, another demystification of a few of the myth held by some in this country. Did anyone hear the comment made by some in the past that Buhari or el-Rufai would never rule in this country? Now those that mere mortals vowed would never rule have the authority to order for the NNPC’s account books.
Even before he became a state governor, the NNPC’s profligacy was a terrain el-Rufai was familiar with, because he had written several times on the ugly practices going on in some of government’s public establishments in his incisive newspaper columns. He had been attacked from all sides that time for stating the facts as they were. Yet, what el-Rufai used to do in those columns was simple: He got facts and figures that were mostly available in the public space, including in annual budgets, and looked beyond the figures, assessing the implications of those figures on the polity. For analysing the facts that were already on the ground, he was attacked by some. Now with him in the NEC’s select few, he would see the figures the NNPC didn’t want anyone to see, including the fictionalised figures that the corporation had always cooked up to deceive Nigerians, using technical jargons.
With that task on el-Rufai’s hands, it was no wonder that when he was invited to speak at a public event lately, his choice of topic centred on the Nigerian oil industry. “If you don’t kill the NNPC, it will kill Nigeria,” el-Rufai had said. According to him, the corporation is riddled with corruption and until it is disabled and rebuilt, there will be no headway for Nigeria. He notes that Nigeria’s collective wealth is being feasted upon by the less than 1,000 employees of the corporation, alleging that the NNPC only remits 42 per cent of what it ought to remit to the Federal Government for about three years now. He backed whatever he said with evidence such as the trillions of naira paid out as oil subsidy in 2011, when only N254bn was appropriated. He noted the unsustainable expenses on questionable subsidy payments, exemplified by the $8.99bn spent in the 18 months between January 2012 and June 2013.
Moreover, about N971bn was budgeted for subsidy payments in 2014 alone, more than twice of what was eventually paid. No one had been successfully prosecuted for this scam, el-Rufai noted. Huge deficits in gas supply have ensured that the country’s thermal plants cannot produce power at optimal levels. In the eight years leading up to 2014, joint venture production declined by 50.4 per cent. Some 100,000 barrels per day, about five per cent of total production, is estimated to be lost to organised theft. In 2012, the NNPC sold N2.77tn of “domestic” crude oil but paid only N1.66tn to the Federation Account. In 2013, it earned N2.66tn but paid N1.56tn into the treasury. In 2014, it earned N2.64tn, but remitted N1.44tn. Meanwhile, between January and May 2015, it earned N733.36bn and remitted only N473.2bn. “A company with the audacity to retain 42 per cent of a country’s money has become a veritable parallel republic!” el-Rufai had announced. The example given is only with respect to domestic crude oil sale, similar mind-blowing leakages exist in the budgets of its subsidiary companies. There are other underhand dealings as well.
For instance, KPMG an audit and advisory consultancy outfit, noted in a report it submitted in 2010 to the immediate past government that in remitting the equivalent naira value of the domestic crude allocation to the Federation Account, the NNPC used exchange rates far lower than those published by the CBN. In this process alone, the corporation cheated the three levels of government of N85.2bn in three years – N25.7bn in 2007, N33.8bn in 2008 and N26.7bn in 2009. When the auditors requested explanations for these exchange rate disparities, the corporation claimed it obtained the exchange rates it used from the CBN via telephone. That was one case. KPMG also noted that renewal of crude sale contracts every year was done based on individual discretion and wrong assumptions and criteria. Contracts for the importation of products were routinely awarded without regard for approved guidelines and procedures. There was poor accounting, shoddy record keeping; the corporation leaves its storage facilities unused while it incurs additional cost from leasing of third party storage facilities.
One point to note is that this level of thievery happens only when the political environment is conducive to it; the manner the NNPC had boldly engaged in a media blitz to defend the indefensible in the past was one sign that the governments of that time provided the condition for it to cheat. Moreover, the complicity of past administrations, or well-placed individuals in the NNPC’s mess was a factor. This is one reason the current administration must make sure it distances itself from individuals that can drag it into the net of the NNPC, an organisation that has perfected the art of ensnaring successive administrations. It’s the culture that each new NNPC leadership has been raised in. From the corner where it finds itself now, the corporation will be bold enough to come to the public space and attack governors that accuse it of thievery only if it succeeds in pocketing those who have the power to overturn the large scale sleaze it has been configured to perpetuate. So far, the NNPC cartel is silent because it has yet to rope in anyone of note in the current administration. The administration must ensure this status quo remains, and I think fundamental changes to the NNPC should happen before a cabinet minister takes it over. While it looks into how best it should deal with the NNPC menace however, Buhari should ensure the corporation doesn’t continue business as usual and that way have the opportunity to return to the public space to insult the collective intelligence of Nigerians with its lies.
By ’Tunji Ajibade
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