By Adewole Kehinde
“Accountability is the glue that ties commitment to the result.” – Bob Proctor
I recently came across a news report titled “NNPCL Diverts N2.68tn, $9.77m, Ignores Probe Invitations—Auditor-General’s Report,” where the Auditor-General of the Federation’s annual reports from 2017 to 2021 were submitted to the National Assembly and found that the Nigerian National Petroleum Company Limited (NNPCL) diverted a total of N2.68 trillion and $9.77 million over four years.
The reports also indicated that the NNPCL violated the Constitution of the Federal Republic of Nigeria and the 2009 Act of Financial Regulations.
This so-called “Auditor-General’s Report” has become a national anthem and maybe a way to damage the clean records of Mal Mele Kyari as the GCEO of the Nigerian National Petroleum Company Limited.
NNPC has been promoting transparency, accountability, and performance excellence values as part of its quest to float an Initial Public Offer (IPO) while calling for more collaboration and transparency in the global energy industry.
We should not forget that NNPC became the first state-owned oil company to join the United Nations Global Compact on human rights, labour, environment, and anti-corruption.
Section 7(4)(a) and (b) of the Nigerian National Petroleum Corporation Act provides that the corporation shall maintain a fund, which shall consist of such money as may be received by the corporation in the course of its operations or in relation to the exercise by the corporation of any of its functions under this Act, and from such funds shall be defrayed all expenses incurred by the corporation.
Section 7(5) of the same Act states that the corporation must submit to the National Council of Ministers (FEC) estimates of its expenditure and income for the following fiscal year no later than three months before the end of each fiscal year.
The above provisions imply that NNPC can receive revenue in the course of its operations, and from such money, it can defray all its expenses, and that such expenditure and income must arise from its annual budget approved by the National Council of Ministers. (FEC)
NNPC is, indeed, legally bound to pay its gross income or revenues into the Federation Account, and it may only defray its expenses after it has been appropriated by the National Assembly and the Minister of Finance has authorised such payment via warrants issued to the Accountant-General of the Federation.
This law does not authorise the NNPC to defray its expenses unilaterally without the authorisation of either the National Assembly or the Minister of Finance, which it is believed is the fallout of its defraying its expenses out of its gross income before paying the balance into the Federation Account.
It has been argued that Section 7(4) of the NNPC Act authorises the corporation to settle its debts and expenses before remitting the balance of its income into the Federation Account. Such an argument would be untenable, as it is inconsistent with Section 162 of the 1999 Constitution. It is a trite law that the Constitution is supreme, and any law that is inconsistent with it will be invalid, null, and void to the extent of the inconsistency.
The correct approach to the interpretation of section 7 (4) of the NNPC Act is to construe it subject to the provisions of sections 21 and 22 of the Fiscal Responsibility Act and sections 44 (3), 80, 81, and 162 of the Constitution of the Federal Republic of Nigeria 1999, as amended.
It is submitted that when that is done, the conclusion would be that while NNPC is entitled to maintain a fund from which it may defray its expenses, it may only do so upon appropriation of funds for that purpose by the National Assembly and warrants by the Minister of Finance directing the issuance of those funds from the Consolidated Revenue Fund of the Federation.
It is not correct to say that NNPC Ltd. has not remitted any money to the Federation Account. NNPC Ltd. and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly. This is in addition to payments of CIT to road contractors under the Road Investment Tax Credit Scheme. In all, NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC).
From the above explanation, it is clear that the Nigerian National Petroleum Corporation, now NNPC Limited, has not violated any law by deducting from the sales of crude oil directly to fund government priority projects.
Mele Kyari is not known for shunning invitations extended to him; he is an ambassador of transparency and accountability.
The NNPC Ltd. is committed to the Transparency, Accountability, and Performance Excellence (TAPE) philosophy as emplaced by the Mele Kyari-led management since stepping into the saddle in 2019.
From my perspective, the Nigerian National Petroleum Company Limited has been working to be more transparent, as it made its audited accounts public on its website for the first time.
Also, NNPC is an EITI-supporting company, which means it’s committed to observing the Extractive Industries Transparency Initiative’s (EITI) expectations.
I recalled that the global transparency body, Extractive Industries Transparency Initiative (EITI), scored the Nigerian National Petroleum Company Limited (NNPC Ltd) very high in its latest global assessment.
The EITI’s Deputy Executive Director, Bady Baldé, made this known when he led an EITI delegation to the Group Chief Executive Officer of NNPC Ltd., Mele Kyari, in Abuja.
The EITI boss also urged NNPC Ltd. to remain engaged and play an active role in its Nigerian unit, the Nigeria Extractive Industries Transparency Initiative (NEITI).
Earlier, Mr. Kyari highlighted some of the key changes in the operations of NNPC Ltd. since its transformation into a commercially focused limited liability company in 2021.
He acknowledged that the NNPC Ltd.’s partnership with EITI/NEITI has made it a much more reliable company.
He expressed disappointment with NEITI for going public with its report that NNPC Ltd. failed to remit some money into the Federation Account instead of seeking clarification on any perceived gap in its assessment.
He explained that NNPC Ltd. was holding no public funds back.
He added that what NEITI reported as non-remittance was what was due to the company as payment for taking the burden of the fuel subsidy on behalf of the Federal Government.
He disclosed that NNPC Ltd would have released its Audited Financial Statement (AFS) for 2022 since June 2023 but could not do so because it had no substantive Board of Directors at that time.
On his part, the Executive Secretary of NEITI, Orji Ogbonnaya Orji, called for the reconstitution of the NNPC/NEITI Joint Committee on Reconciliation, adding that the committee could help in straightening grey areas.
It is high time the so-called “Auditor-General’s annual reports” published between 2017 and 2021 are put to rest.
Adewole Kehinde is the publisher of Swift Reporters. 08166240846. kennyadewole@gmail.com
