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Repositioning NNPC:What Considerations?

Posted: Jul 27, 2015 at 12:00 am   /   by   /   comments (0)

In line with President Muhammadu Buhari’s resolve to probe and clean up the rot in the Nigeria National Petroleum Corporation (NNPC), the Department of State Security (DSS) has heightened its manhunt of NNPC corrupt officials. Media reports recently reveal that the Group Executive Director, Refining and Petrochemicals at the NNPC, Mr Ian Udoh and several others have been interrogated by the DSS and other anti-graft agencies 11 times since May over crude swap deals with traders. This has become necessary following deeper revelations of shady deals that have bedeviled NNPC over time. This is why any move to entrench sanity in the corporation is a right step in the right direction considering the urgent need to plug all the irregularities and leakages in the corporation.

Recall that during President Goodluck Jonathan’s administration, $20 billion was allegedly missing from the NNPC’s coffer. This was how far Nigerians knew. But latest revelations by the National Economic Council (NEC) headed by the Vice President, Yemi Oshinbajo, have revealed breath taking figures of corruption in the company. NEC disclosed that between 2012 and May 2015, NNPC earned about N8.1 trillion but remitted only about N4.3 trillion to the federation account. Apparently, it appears the more the company’s books are being investigated, the more mind blowing revelations are discovered.

However, there are concerns in some quarters that achieving a successful probe of the NNPC would require more stringent approach than envisaged. Besides, the fact that since 2011, the corporation had had about six Managing Directors is indicative of a clandestine political manipulation and interference in the operations of the corporation. Moreover, the company has been serving as a cash cow for some unscrupulous elements in the political circle.  This must not be allowed to continue.

This newspaper believes that if proper measures are put in place, the corporation can be repositioned to operate in a more transparent and effective way even as it protects the country’s common wealth better. It is gladdening that President Buhari reportedly announced during his recent visit to the United States of America (USA) of his intension to split the NNPC into two; one as a regulator and the other an investment vehicle for the country. This, to say the least, is a welcome development.   What it requires is for government to brace up, be resolute and summon the required political will to pursue this objective without fear or favour. In fact, we agree with the proposal by President Buhari’s advisers reportedly recommending a root-and-branch overhaul of NNPC.  What this implies is that government should not stop at the level of probe. It is time to consider reworking NNPC’s legal framework and operational structure in line with modern and international canons. As a matter of fact, this will certainly resolve the conflict between the constitution which provides that an institution like the NNPC must pay all its earning to the Federal Government and the Act that established the NNPC. While the former provides that the funds for the company’s operations be released by government based on a budget approved by parliament, the later allows the company to cover its costs before remitting funds to the federal government enabling it to do whatever it wants with the earnings.

Furthermore, we believe that it will do the country a lot of good if the NNPC is insulated from any form of political manipulations whatsoever. Perhaps, one way of doing this is for the corporation to be made to run as a statutory agency where its Chief executive officers are appointed on tenured bases. More so, it has become necessary to have an established mechanism for a periodic audit of the company’s accounts with a form of public reporting system. Beyond these measures, this newspaper recommends that part of NNPC be listed at the stock exchange so that the demands of the Stock exchange, especially with regards to being under the scrutiny of the Financial Reporting Council of Nigeria (FRCN), could help in check-mating the financial leakages even as sanity could be restored in the system.