NNPC, US Report and Kyari’s transparency exemplum


NNPC, US Report and Kyari’s transparency exemplum

By Ray Umukoro

April 18, 2021

For the first time in as many decades, the Nigerian National Petroleum Corporation, NNPC, got into the good books of the United States and her global anti-corruption watch agencies. This time, rather than the usual splatter of graft and miasma, NNPC grabbed global attention for transparency in an industry tainted, globally, by corruption, sleaze and skulduggery.

NNPC and US Report
Mele Kolo Kyari, GMD NNPC

The United States 2020 Report on Human Rights Practices in Nigeria released by the Bureau of Democracy, Human Rights, and Labour under the US Department of State gave more than a passing glance at the state of human rights in Nigeria. It exhumed buried carcasses of corruption in Nigeria’s public service. But the same report also highlighted an almost neglected radiance of rainbow in the operations of Nigeria’s petroleum products mother hen, the NNPC.

The 2020 Report is a compendium of the good, the bad and the unwholesome in Nigeria’s struggle to moult the ugly garment of corruption as well as cases of human rights violations, some of which showed a naked attempt by government as suppressing free speech and press freedom. But the same Report holds out a reed of redemptive grace. It spared the nation’s blushes when it highlighted the new order of transparency at NNPC.

In Section 4 of the over 16,500-word Report, it states: “In June (2020) the Nigeria National Petroleum Corporation released audited 2018 financial statements, the first such release since its establishment in 1977. The corporation also published audited accounts of its 20 subsidiaries and business divisions. In December the federal government launched the Financial Transparency Policy and Portal, commonly referred to as Open Treasury Portal, with the aim of increasing transparency and governmental accountability of funds transferred by making the daily treasury statement public. The Open Treasury Portal required all ministries, departments, and agencies to publish daily reports of payments greater than five million naira ($13,300). The Nigeria Extractive Industries Transparency Initiative and other anti-corruption watchdog groups hailed the government for providing better access to government spending data.”

As far as is known to most Nigerians, this is the first time that a report emanating from the United States on the status of corruption across the globe would cast a sector in Nigeria in brilliant light. It’s always been tale after tale of corruption, sleight of hand and outright stealing of public funds.

Birthed in 1977, barely a decade after commercial exploitation of crude oil in Oloibiri community, Bayelsa State, in the heartland of the Niger Delta, NNPC has often headlined major cases of corruption in Nigeria. And it’s not just in Nigeria that corporates engaged in oil and gas business are coated in stinking tar. All over the world, there seems to be a harmony between oil companies and the scarlet symphony of corruption. Several American oil and gas companies, those in Mexico, Brazil, China and elsewhere have been indicted in oil fraud cases. NNPC is, therefore, not an exception.

But NNPC appears to have turned a new chapter since July 7, 2019, when Mele Kolo Kyari, a geologist and earth scientist versed in crude exploration, refinery, marketing and management of the petroleum value chain became the 19th GMD of NNPC. He was as forthright as he was blunt about his determination to remove every veil of opacity that had draped the operations of the nation’s petroleum behemoth. His over three decades in the industry prior to his appointment as GMD thoroughly lends him to the job.

His academic background and industry experience means he knows everything and anything about crude oil production. He can tell the soil texture that bears oil and gas. He can sniff crude oil and gas from the deepest part of the earth. Beyond that, he can also sell same. He understands the global market, its foibles, volatility and treachery. Yes, the global oil market is a treacherous one. It can hurt and heal. It can break and make. Some call it the Dutch Disease. Others allude to it as the Resource Curse.

Nigeria has been a victim of the “Dutch Disease” as well as the “Resource Curse. Both are symptomatic of monoculture economies where a nation relies heavily if not solely on crude cash. Whereas the ‘Disease’ leads to poverty in the midst of plenty, the ‘Curse’ tends to make a people lazy and uninventive. The ‘disease’ kills agriculture and the primary industry; the ‘curse’ makes the people docile and uncreative. This explains why the most progressive nations of the world with robust economies and impressive income per capital are not the largest oil-producing nations or those relying chiefly on oil and gas money. Even now, the most capitalized companies in the world are not oil and gas multinationals but companies which play in the digital economy ecosystem.

Because crude oil business is lucrative, it is also the hotbed of global corruption. Anywhere there is crude oil money, there is a high probability of graft. Russia, Venezuela, Mexico, Angola et al are ready examples. The smell of oil is the stench of corruption.

Transparency International, the global corruption watchdog, puts it succinctly: “Many countries rich in oil and gas are home to some of the world’s poorest people. How can this happen? Too often, wealth stays in the hands of politicians and industry insiders. Revenues don’t get published. Payments made to governments to exploit resources remain secret. Bribery and embezzlement go unchecked.

“Many oil and gas companies protect the identities of their equity holders and subsidiaries. This allows corrupt leaders to hide stolen funds unnoticed. Inadequate financial statements make it easy to disguise corrupt deals, and impossible for any of us to monitor them. Many oil and gas companies don’t publish information country by country. This allows them to hide the royalties, taxes and fees they pay. But without this information, we can’t hold governments to account for the money they receive.”

So, it’s more about keeping the books open, about publishing financial reports and information on transactions. This why Kyari’s break from the past is not only commendable but should be the benchmark for other revenue-generating agencies.  By publishing the financial reports of NNPC for 2018 and 2019, Kyari has shown he has nothing to hide. He has broken a 43-year-old jinx steeped in the matrix of fiscal muddiness.

The very fact that the same US report which condemned some sectors and state actors in Nigeria for corruption and human rights abuses singled out NNPC for fiscal transparency means that the US or any other super power bears no ill-will towards Nigeria. When we do good, they commend us. When we behave badly, they censure us. Kyari has chosen to do good. He has elected to lead a transformed NNPC and its subsidiaries; to repair the old, broken breaches and account to Nigerians. He deserves our prayers and support.

Kyari has shown to the world that Nigeria oil and gas sector is no longer mired in the cesspit of venality and fiscal tardiness; that the sector has taken off on a journey in the pathway of transparency and accountability. This is cheery news and it gets even better when his modest effort is not lost on the global community. International bodies like the Extractive Industries Transparency Initiative (EITI) which described it as a ‘significant milestone’, the Open Government Partnership, among others have variously commended this new order of openness in NNPC.  Kyari is flying a patriotic flag. He should stay the course!

  • Umukoro, a public policy analyst, writes from Lagos