When the Minister of Finance, Remi Babalola recently disclosed that "The Nigerian National Petroleum Corporation (NNPC) was insolvent (bankrupt) as current liabilities exceeded current assets by 754 billion naira (5 billion dollars) as at December 31, 2008," he was very correct.
When the Minister of Finance, Remi Babalola recently disclosed that "The Nigerian National Petroleum Corporation (NNPC) was insolvent (bankrupt) as current liabilities exceeded current assets by 754 billion naira (5 billion dollars) as at December 31, 2008," he was very correct.
Also the Information Minister, Prof Dora Akunyili was very correct when she said in her response that the Finance Minister does not have “a comprehensive picture of the issue,” and that “From the Auditor’s Account, NNPC is a going concern and does not have solvency issue as a corporation. Therefore categorically, NNPC is not insolvent.”
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Even the Finance Minister, Olusegun Aganga followed Prof Akunyili later to accuse Babalola, his junior minister of not having the whole picture before making the statement that rattled the Presidency and the world.
However, both Prof Akunyili and Aganga deliberately failed to acknowledge that on their part equally, they do not have a comprehensive picture of the real problems of the NNPC. Doe the NNPC have its own accounts or rather funds different from the Presidency in the strict sense of it? Both ministers should tell Nigerians the true situation.
As disclosed, NNPC is incapable of repaying 450 billion naira (3 billion dollars) which it owed the Federation Account, referring to the account to which monies made by all government institutions, including customs and ports, are paid. And this is just a bite into the level of the corporation’s financial mess and indebtedness to all sorts of business concerns. Nigerians have become used to the anthem that NNPC cannot pay its cash call obligations in the joint venture operations with foreign multinationals and this is true. The NNPC owes almost everybody that has anything to do with it as evidenced by, amongst others, the inability to pay for the domestic crude as and when due and delays in settling bills for fuel imports.
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Though the issue here is not much of the disclosure of NNPC financial state but the whole debacle shows that the various departments under this government are not properly coordinating information. It sends a dangerous signal that the President, Dr Goodluck Jonathan may not actually be in full control of affairs of country.
NNPC is in serious trouble and the situation is not going to change at least not in the near future except something is radically done to free the corporation from the evil grip of politicians especially the Presidency.
The handling of this issue was both amusing and saddening as even the Holy Scriptures clearly acknowledges that self deceit is the worst form of hypocrisy. Do we need to be fed with lies? If NNPC is insolvent and a matter-of-fact statement was declared by a concerned minister, what is bad in it? Even if the corporation is solvent but deliberately refused to pay its debts, is the minister not supposed to know the reason for such decision?
The competence of a government is not measured by the way it coordinates lies and deception but what goodies it can produce for the people. Why should all sorts of ministers scramble to refute the frank disclosure of the corporation’s insolvency?
Even the Revenue Mobilisation and Fiscal Commission (RMFC) has been shouting almost on daily basis that there is something wrong with the NNPC as the corporation has not been remitting revenues accruing to the government into the Federation Account. So the nation was alerted long ago on the NNPC’s financial problem but the alarm was not taken seriously because the people who should have asked questions were the same people leaching the corporation.
Truth be told, no amount of refutation or colouring will clear or repair the damage politicians especially the Presidency since the days of Obasanjo and Umaru Yar’adua and maybe now Jonathan have done and still doing to the nation’s apex oil concern. Few privileged politicians have looted the NNPC to bankruptcy.
The problem of the organization is in the deliberate and fraudulent structuring of its relationship with the Presidency where the corporation does not have a life of its own but depends on any sitting president for almost everything it needs to run its operation.
Past Nigerian leaders indiscriminately demanded money from the corporation without recourse to due process. Ibrahim Babangida, Sani Abacha and Abdulsalami Abubakar were all culprits in this fraudulent hijacking of the NNPC funds. Olusegun Obasanjo came, saw and completely destroyed whatever was left as financial autonomy of the corporation. The NNPC has no operational budget in the strict sense of it, it gets whatever it needs for its operations directly from the Presidency. Is that how to run an oil company?
The current problem started with Gaius Obaseki as the group managing director of the NNPC and former President Olusegun Obasanjo who in a sinister attempt to check alleged widespread corruption in the organization usurped almost all the powers of the GMD in money matters. The unholy act continued and was even taken to a criminal height during the tenure of Funso Kupolokun where the NNPC boss cannot even approve any spending higher than one million. Those close to the Presidential Villa at that time would confirm that Kupolokun used to come to the villa with Ghana-must-go bags of documents for Obasanjo to sign and approve.
The evil act also continued into the Yar’adua Presidency and was worsen by the late president’s incapacitation as a result of the ill health which made NNPC seek approvals from all kinds of aides even house wives.
Nigerians were openly told during the PTDF controversy between Obasanjo and his deputy how NNPC funds were diverted by President Obasanjo through proxy accounts to fund both the activities and chieftains of the Peoples Democratic Party (PDP).
Narrating how the N1.5 trillion being claimed from the Federal Government accumulated, The NNPC boss, Mr Augustine Oniwon, at the recent Senate Oil and Gas Committee hearing on the insolvency controversy clearly showed some of the few cases of outright irresponsibility by the Presidency concerning the NNPC funds. According to him, “when the Department of Petroleum Resources, DPR, was to be established, the then President (unnamed) directed the NNPC to release N651 million for the take off but that it had never been refunded.
“When a sugar company was to be established, the President (unnamed) also asked them to release another $18 million which also has never been refunded to date.”
These are just a few cases of how the Federal Government (Presidency) has been directing NNPC to release funds without recourse to due process. The NNPC’s budget and any other financial matters of the corporation were approved only by the board of directors with the endorsement of the president. This we have been told.
So it is not enough for the National Assembly to just shout at the Presidency’s recklessness in diverting NNPC’s fund. This is not going to change anything rather, the National Assembly should summon the implicated past leaders majority of whom are still alive and even active in politics. Minus Yar’adua and Abacha who had gone to be with Allah, the National Assembly should find out from Babangida, Abdulsalami, Obasanjo, and even Jonathan their roles in messing up the NNPC. This should not be a probe to riddicle the former leaders but a fact-finding initiative to help us know the truth and avert continued occurrence.
Most importantly, the National Assembly should put legislative instruments in place to severe the NNPC from the parasitic apron string of the Presidency.
IFEANYI IZEZE IS AN ABUJA-BASED CONSULTANT ON STRATEGY AND COMMUNICATION ([email protected])
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