Transparency Under Current Administration of the NNPC

Divine C. Jude-Okeke

It has become apparent that resource rich and resource dependent countries could significantly benefit from the effective management or governance of petroleum re-sources in achieving economic growth and mitigating the resource curse. In this regard, transparency has been touted as a significant contributor to achieving an effective resource governance regime. These conversations has led to the emergence of ac-countability initiatives like ‘Publish what you pay,’ ‘The Kimberly Thought Pro-cess’ and most popular amongst them, the ‘Extractive Industries Transparency Initia-tive’ (EITI). These initiatives were set up to encourage the publishing of financial transactions between a country’s government and oil multinational companies.

Nigeria voluntarily joined the global EITI in 2003 and inaugurated the Nigeria Ex-tractive Industries Transparency Initiative (NEITI) to promote prudent management of revenues from its abundant natural resources to reduce poverty and ensure sus-tainable development. NEITI in that regard posed itself to be the Nigerian national sub-set of the global EITI.

The NNPC towers had long cut the image of an opaque, dingy glass house where cor-ruption had become institutionalised. The KPMG, back in 2012, investigated finances of the corporation and exposed massive financial malfeasance and monumental cor-ruption. Understandably, many had given up on the possibility of salvaging the corpo-ration from the firm grip of financial iniquities and operational lethargy, such that public cynicism had always greeted every appointment or reorganisation in the corpo-ration. Since its establishment, NEITI was construed to act as a watchdog in attacking the oil corporation and ensuring maximum levels of compliance with the transparency initiatives. However, the harmonisation and compliance NEITI has set the corporation to comport itself to, has left most stakeholders bewildered. Since the appointment of the GMD Sir Mele Kyari, it has been no surprise to see that the government has set out to transform the operations of the oil corporation.

But since his appointment positive changes have become noticeable. Large-scale insti-tutional reforms which rolled the NNPC into seven independent business units to make it a more efficient corporation; The business environment was also liberalised, and it became an enabler for the introduction of new business models which drastically reduced the losses recorded by the NNPC in the past.

These reforms in the petroleum sector in the last four years has yielded over $30 billion foreign investments and commitments aimed at growing the sector. These reforms also yielded positive results in the area of personnel integrity, and nowhere is this demonstrated more than the emergence of a management staff as the GMD of the corporation. Kyari personifies the fruits of those reforms and his sub appointments was a grandeur endorsement of the current management of the NNPC as professionals who work to make operations in the oil and gas sector more transparent and accountable.

Some of these notable achievements were seen when, the Federal Government through the Minister of State for Petroleum Resources; Chief Timipre Sylva, Sir Mele Kyari and Sir Adokiye Tom-bomieye inaugurated the crude oil cost optimization programme which was one of the top priority areas given to the Ministry of Petroleum Resources under the Next Level agenda of Mr President in ensuring reduction of the price of the crude oil extraction costs. Additionally, the domestic gas consumption got a boost as the NPDC completed its gas plant, and grand above all was NNPC BECOMING AN EITI SUPPORT COMPANY.

Despite the above achievements of the NNPC, there are some criticisms. One of such criticisms is that while the EITI relies on government and companies to report finan-cial transactions, it is unable to ‘monitor or track illicit financial flows – that is money that benefits a select group of elites’. This means that it does not have the mechanism to identify and report illegitimate transfers that are diverted for private benefit. Also, another perceived weakness of the EITI is its voluntary nature. The Federal Govern-ment and companies are only encouraged to adhere to the EITI principles but are not under any obligation to do so.

Another criticism is that, although there is increased transparency, the overarching societal expectation that improved transparency will lead to greater governance and socio-economic transformations remains unachieved. It is therefore suggested that while EITI implementation fosters transparency, accountability remains a concern. Hence, the reason why corruption persists. It therefore implies that ‘the EITI or the NEITI being its subset on its own cannot completely be said to be a panacea for good governance and sustainable development’ of petroleum resources for oil-rich countries.