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Uche Usim, Abuja
Since its establishment in April 1977, the Nigerian National Petroleum Corporation (NNPC) has nursed the vision of becoming a world-class oil and gas company driven by shared commitment to excellence.
However, looking at its 43 years of sojourn, it is easy to infer that this noble vision would remain a mirage, as NNPC’s operational structure places higher premium on opacity rather than accountability and transparency.
For over four decades, NNPC was scared to open its books for public scrutiny, even when global best practices demanded such.
The ugly development did not create the ambience for the NNPC to cross-pollinate with a broad spectrum of stakeholders towards advancing its growth. It remained cocooned in its space and merely interfaced with global stakeholders peripherally because the fundamental index, openness, was missing.
Other energy-producing nations like Saudi Arabia, Iraq and Iran designed strategies that enabled the public to monitor the operations of their national oil companies and offer insight as to how to get it to the next level.
With such transparency-shy posturing of the NNPC, Nigeria merely dominated the commercial energy space in Africa and beyond; but its dominance flag was never hoisted when matters of transparency and accountability were discussed anywhere around the world.
Industry watchers saw this development as worrisome, because entrenching transparency and accountability in the petroleum sector should be a no-brainer, since it accounts for about 90 per cent of foreign exchange earnings of the country.
But the Group Managing Director (GMD) of NNPC, Mallam Mele Kyari, in his maiden speech on assumption of office on July 8, 2019, made it clear that under his watch, the corporation’s businesses and governance code, would be accountable to the 200 million Nigerians who are the true owners of the company.
While he is walking the talk, industry watchers recall that the pre-Kyari NNPC was one that lived in seclusion, as only the corporation knew how much Nigeria actually earned from crude oil and other associated businesses. So, it declared to the public, whatever it deemed necessary.
As experts rightly alluded to, financial probity in the NNPC is capable of boosting the nation’s domestic resource mobilisation efforts towards ensuring socio-economic development of the country.
More so, the new order has ensured that operational discipline cascades down to all the subsidiaries of the NNPC.
Again, it is likely to have the domino effect with other critical agencies of government imbibing the ennobling virtues in corporate governance.
The soothing news for the NNPC is that the incumbent management led by Mallam Mele Kyari appreciates the need for transparency and accountability in its operations.
So, on June 12, the NNPC broke a 43-year jinx as it released its audited annual reports and financial statements for the year ended December 31, 2018.
It encapsulated the performance of 20 of its subsidiary companies operating within and outside Nigeria.
Speaking after the public disclosure of the accounts, Kyari promised to expedite actions on the corporation’s preparation and subsequent release of its 2019 audited financial statement.
And the rare feat did not go unnoticed. The Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Mr Waziri Adio described it as very good for the country’s image locally and internationally.
He said: “Having such disclosures is good for transparency and accountability. I congratulate Mele Kyari and his team and urge them to make this a regular practice and in open data format.”
Also, recently, the Governor of Akwa Ibom State, Mr Udom Gabriel Emmanuel, while welcoming the NNPC Board members to the Government House, Uyo, said his membership of the National Economic Council had exposed him to the activities in the oil and gas industry, affirming that the council had noted the positive impact the crop of the management and Board of NNPC was making in the economy of the nation, particularly in respect to adherence to transparency and accountability in the petroleum sector.
Aside publishing its audited accounts recently, the new team at NNPC is treading a new path of probity.
Businesses are now conducted in a transparent and accountable manner, while Artificial Intelligence (AI) has been deployed to boost the accounting processes of its corporate headquarters, subsidiaries, companies and corporate services units (CSUs).
These new innovations, aside trashing the toga of opacity associated with extractive industries generally, have also launched the NNPC on a new pedestal.
Perhaps, the greatest recognition of the new dawn in NNPC with regards to transparency came on August 18, when the Extractive Industries Transparency Initiative (EITI) made the corporation one of its partner companies.
In other words, NNPC was able to realise part of its vision of becoming a world-class company after 43 years and when a new management came on the saddle.
NNPC, from that date, joined a group of 65 other extractives companies, state-owned enterprises, commodity traders, financial institutions and industry partners committed to observing the EITI’s support company expectations.
By implication, if any organisation does not meet all the pre-qualification obligations, EITI would not admit it.
Now, the EITI’s supporting company expectations require that NNPC, among others, publicly declare support for the EITI principles: promoting transparency throughout the extractive industries, helping in public debate and provision of opportunities for sustainable development; Publicly disclose taxes and payments; publicly disclose beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors; engage in rigorous procurement processes, including due diligence in respect to partners and vendors; deliver natural resources in a manner that benefits societies and communities; ensure that company processes are appropriate to deliver the data required for high standards of accountability.
EITI further listed three areas in which NNPC was expected to advance its inclination to transparency, namely: revenue and payment to government; contracts governing petroleum exploration and production, as well as consolidated group-level financial statements.
Interestingly, the new rules sit well with the operational blueprint evolved by the NNPC GMD to take the corporation to the next level.
He added that NNPC’s choice as an EITI partner-company aligns strongly with its corporate vision and principles of Transparency, Accountability and Performance Excellence (TAPE), which his management team has championed since assumption of office as NNPC helmsman on July 8, 2019.
He assured that NNPC was on a trajectory towards greater transparency and would continue to collaborate with NEITI and EITI and other such bodies.
NNPC’s admission to the league of EITI partnering companies has also drawn accolades from other significant individuals in the extractives and financial establishments. To wit: EITI Board Chairperson, Right Hon. Helen Clark, while welcoming NNPC to the fold, noted the corporation’s enormous role in Nigeria’s economy, stating that the new status would afford the corporation the opportunity to deepen its commitment to transparency and in turn ensure that Nigerians benefit from the nation’s hydrocarbon resources.
In a similar manner, Nigeria’s Minister of Finance, Budget and National Planning, and a former EITI Board member, Mrs Zainab Ahmed, noted that the increased transparency in NNPC’s revenues was already contributing to improvements in Nigeria’s domestic resource mobilisation efforts.
Again, the efforts of the new NNPC management to take the corporation to the next level can be gleaned by its interventions in a broad spectrum like technology deployment, dispute resolution, transparency and diversification.
Those who have coursed through the Nigerian petroleum industry have extolled the new NNPC management for embracing the unpopular option of dumping opacity for transparency, despite the juicy selfish rewards of the former.
That, perhaps, explains why no management ever opened the NNPC books in 43 years for public scrutiny. Rather, successive administrations have constantly torpedoed the national economy for few influential Nigerians to benefit.
Those with private sector orientation know that Kyari’s target-driven style is uncommon in public service, as it is bogged down by incredible bureaucracy.
As a seasoned technocrat with vast knowledge of the petroleum industry, he has obviously designed strategic ways of getting results, amid lean resources, without veering off the due process path.
Analysts describe NNPC’s new status as one that is rapidly scrubbing off the tarred image of Nigeria, both at home and abroad.
According to them, NNPC as the economy pillar and flagship agency in the oil and gas sector needs to get it right for the benefits of accountability and transparency to permeate all the facets of the economy.
They also assert that sustaining the feat so far achieved remains paramount.
To this end, experts suggest that a scorecard be developed and appropriate checks put in place so that there would be milestones to be tracked to ensure that the corporation does not go off course.
The enabling environment to succeed has been created by the Buhari administration, which has exemplified commitment to the ideals of openness in public service delivery in the last five years.
It is imperative that other government-owned enterprises toe the path of openness like the NNPC is doing, not just to restore the dignity of the country, but more importantly, ensure that the national treasures benefit all Nigerians, justly and equitably.
