NNPC and transparency, accountability

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The Nigerian National Petroleum Corporation (NNPC) has been in the eye of the storm in recent times due to indictments on transparency and accountability that are directly linked to top managers as well as government executives.Just of late, State governments boycotted the Federation Account Allocation Committee (FAAC) meeting over allegations that the NNPC had hidden N30billion oil revenue.

The House of Representatives had also revealed that the company fell foul of the Treasury Single Account (TSA) policy by depositing over N50billion in various commercial banks. The payment was approved through a letter purportedly signed by Abba Kyari, Chief of Staff to President, Muhammadu Buhari, conveying Buhari’s consent to lodge the amount in the banks.Few months ago, Minister of State for Petroleum Resources, Ibe Kachikwu, had accused the Group Managing Director, NNPC, Maikanti Baru, of flagrant violation of due process in the award of contracts amounting to about $24billion and acts of insubordination.

The concern for most stakeholders is the standard of behaviour in the state-owned oil company. Considering that the corporation manages the country’s wealth, experts are of the opinion that clampdown on loopholes would properly position the company to perform at global best practices rather than allowing the firm to be controlled more like a personal estate.

The Nigerian National Petroleum Corporation (NNPC) has been in the eye of the storm in recent times due to indictments on transparency and accountability that are directly linked to top managers as well as government executives.Just of late, State governments boycotted the Federation Account Allocation Committee (FAAC) meeting over allegations that the NNPC had hidden N30billion oil revenue.

The House of Representatives had also revealed that the company fell foul of the Treasury Single Account (TSA) policy by depositing over N50billion in various commercial banks. The payment was approved through a letter purportedly signed by Abba Kyari, Chief of Staff to President, Muhammadu Buhari, conveying Buhari’s consent to lodge the amount in the banks.Few months ago, Minister of State for Petroleum Resources, Ibe Kachikwu, had accused the Group Managing Director, NNPC, Maikanti Baru, of flagrant violation of due process in the award of contracts amounting to about $24billion and acts of insubordination.

The concern for most stakeholders is the standard of behaviour in the state-owned oil company. Considering that the corporation manages the country’s wealth, experts are of the opinion that clampdown on loopholes would properly position the company to perform at global best practices rather than allowing the firm to be controlled more like a personal estate.

When the Buhari-led administration came to power with a pitch to fight corruption, ensure transparency and accountability, especially with a reform template in the oil and gas sector, most Nigerians expected that the 7 Big Wins agenda unveiled by the government would bring desired reform.With the big wins, reform pledges were made, particularly the need for collaboration with the National Assembly to pass the Petroleum Industry Reform Bill and Petroleum Fiscal Reform Bill. Although a December 2016 deadline was set, over N100million budgeted in 2017, the passage of the bills remained elusive.

Despite the fact that most industry players were not convinced of reasonable effort towards the bill, the sum of N120million was proposed to be spent on the bill next year. This is coupled with a proposal to expend N610million for the implementation of the 7 Big Wins project, apart from the N200million for oil and gas reforms in 2018.Nigeria is a signatory to the Extractive Industries Transparency Initiative (EITI), a global standard for the good governance of oil, gas and mineral resources, which seeks to address key governance issues in the sectors.

It is also expected that government disclosed oil, gas, and mining contracts in the area of exploration and production, exports and off taking, and swaps on a publicly accessible portal in both human and machine readable formats after launching the National Action Plan 2015-2017 of the Open Government Partnership.Similarly, expectations are high that the administration would obey commitment to develop beneficial ownership register for companies with exploration, production and export licences as well as publishing such in readable formats by 2019.

So far, experts believe that the current administration is no way different from the previous when it comes to transparency and accountability in the oil and gas sector. The Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), and Head of Transparency International (Nigeria) Auwal Musa, believe that the situation remained a total disappointment and betrayal to Nigerians, who supported the government’s anti-corruption and promises of reforms.

To him, the President seems incapable to provide leadership in the sector despite blaming previous administration for misappropriations in the sector.

“This also has confirmed that some people in the Presidency have hijacked the government for their self-interest, and would not allow reforms in the oil and gas sector.“As far as oil and gas sector is concerned, the Buhari administration is not different from what has been happening in the past. It is clear that either Buhari is pretending not to know what is going on, or some people have hijacked the government without his consent,” Musa said.

An oil and gas legal practitioner, Abubakar Sani, said it was glaring the President is not competent to lead a country that requires quick solutions to major problems.He insisted that unless serious reforms take place, projected economic gains and reforms in the NNPC would remain elusive.

Non-passage of the PIB is at the root of all these problems. The bill has been there for years. The National Assembly must up their games and ensure quick passage of the bill,” Sani said.An industry stakeholder, who spoke under condition of anonymity, said transparency and accountability remained a major concern in the NNPC, adding that the problem is compounding because some NNPC funds are under joint ventures.

At the beginning of the TSA there were issues around clarity, if the NNPC was exempted from the TSA or not. Though they were not exempted, but some funds were left out. These tend to create issues around NNPC funds, and there is still no clear statement from the government on how NNPC is affected by TSA,” the source said.

While previous governments did little or nothing to address the level of impunity in the oil and gas sector, most stakeholders stressed the need for Buhari to wake up and double efforts in ensuring that the Corporation became beneficial to Nigerians.

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