By Adewole Kehinde
I recently came across a publication titled “The NNPC Must Die, El-Rufai Says”.
Nasir El-Rufai, the Governor of Kaduna State, commented on Monday at the 7th Wole Soyinka Centre Media Lecture Series, that Nigeria ought to get rid of the corrupt and fraudulent Nigerian National Petroleum Corporation (NNPC).
The company has indeed been deeply submerged in corruption but the emergence of Mal Mele Kyari brought an end to corruption in NNPC.
Since his appointment as the 19th GMD of NNPC, each time you listen to Mele Kolo Kyari, you get the inkling of a man who wants to be different. A man determined to take the path less travelled. Like walking alone, being partially deaf to the mob.
Mele Kolo Kyari came to his new beat with a state of mind. As an NNPC insider and industry person for over 30 years, he knew there was something miserably about the public image of NNPC. Public perception was horrible; A nest of corruption; a place of easy money; the epicenter of unpleasantness and sludge funds.
Shortly after his appointment, Mal. Kyari made his plans very clear for the Corporation which has now been transformed into a Limited Liability Company in line with the Petroleum Industry Act 2021. Specifically, his plans centered around operational efficiency and transparency for NNPC Limited.
Before Kyari’s appointment, how the old NNPC managed its financial activities was a subject of controversy in the public sphere. The old NNPC was mostly accused of running an opaque operation where a few but not its majority shareholders – the Nigerian public, knew its financial status.
While this portrayed the NNPC as an untrustworthy entity back then, it also courted and swarmed controversies of financial immodesty, poor accountability, lack of profitability, and even considered broke.
Under Kyari’s Transparency, Accountability, and Performance Excellence (TAPE) agenda, the era of opaqueness in managing the affairs of the NNPC has since ended.
A major purpose of Nigeria’s joining the Open Government Partnership is to bring transparency, participation, and accountability to the entire value chain of the corruption-prone oil and gas sector. Though disclosures alone are insufficient, if this Open Government Partnership commitment had been adhered to before, it would have contributed to the creation of an environment where oil swap transactions, which siphoned USD1.7billion from NNPC (and by extension the government and citizens), would have been harder to achieve.
NNPC can collate and report the required full sales-level data and other financial and operational data, as seen from its monthly and quarterly reports. Also, NEITI’s audit of the extractive sector is frequently highlighted as an example of best practice by the EITI International Secretariat and NEITI continues to pilot a slew of initiatives, including a Fiscal Allocation and Statutory Disbursement Audit 2007–2011, which audited “utilization of revenue from the Federation Account to Federal, State and Local Governments.”
The publication of the NNPC’s financial and operational data seems to have been implemented outside of the Open Government Partnership process, but little has been done since to fully implement the OGP commitment.
Within the first year of managing the NNPC, Mr. Kyari, through his cost reduction strategy, was able to reduce NNPC’s losses from N803bn in 2018 to N1.7bn in 2019 before the eventual declaration of the N287bn Net Profit in 2020.
While revealing the facts behind the financial statement, Kyari gave credence to the impact the cost reduction strategy had on the finances of the NNPC. Specifically, he said the National Oil Company did not buy what was not vital to its 2020 operations.
Was he merely showing off? Why would he take the lid off what many people perceive as a furious pot of corruption? He explains why. Nigerian National Petroleum Corporation is owned by Nigerians, meaning that over 200 million Nigerians are the shareholders. This means he and his team at NNPC are employed by Nigerians to help manage the industry upon which the National Budget is benchmarked.
Therefore, the same shareholders have a right to know how their business is being managed; to establish whether the enterprise is running at a loss or profitably. Keeping the books open will place a great deal of responsibility on the shoulders of the managers.
Kyari is not afraid of responsibility and accountability and the records are there to show it. In 2020, Nigerian National Petroleum Corporation published the 2018 audited account. The result showed a loss of N803 billion.
This got the management to adopt smarter strategies to run lean and mean; to cut costs and turn the corner. It worked. By the time it released the 2019 audited financial statement, it had achieved a 99.7% reduction in its loss status, cutting loss from N803bn in 2018 to N1.7bn in 2019.
This would never have been possible if Mal. Mele Kolo Kyari had not summoned the courage to go public with the 2018 financial statement.
The huge loss in 2018 made them stop leakages, improve on forethought and introduce cost-saving measures.
Kyari says there is a rebranded Nigerian National Petroleum Corporation with a fresh panorama and obligation to transparency and accountability in consonance with the global principles of the Extractive Industries Transparency Initiative (EITI).
He has kicked a fresh breath of openness into the Nigerian National Petroleum Corporation. He has refused to follow the crowd. He has decided to do things differently; to account to his employers, Nigerians.
Kyari’s insistence to depart from the path of past GMDs of the Corporation who kept the books sealed has already set him apart from the crowd.
And it sure would take him to places none of his predecessors has ever seen or been before. Kyari’s insistence to open the books to Nigerians is itself a constitutional fulfillment.
Unlike in the past when efficiency was compromised by tardiness, Kyari is focused on delivering his mandate for the NNPC and the oil and gas industry is no doubt the better for it while Nigerians are the ultimate beneficiary.
Old NNPC has been replaced with NNPC Limited, a brand new organization that is very fit for a commercialized and corporatized national oil company and new industry regulators that is ready to pay due taxes and royalties. NNPC Limited is alive!
Adewole Kehinde is an Energy Expert and Public Affairs Analyst based in Abuja. He can be reached via kennyadewole@gmail.com
