NNPC’s audited account and the burden of transparency

The charge that Nigeria’s state-owned oil firm, Nigerian National Petroleum Corporation (NNPC), is opaque will not abate anytime soon unless the organisation works hard at it. A first step towards transparency is to open its books.

The NNPC over the weekend announced that it has completed the outstanding audit on its financial statements from the years 2011 to 2016, according to a statement by Ndu Ughamadu, the organisation’s spokesman.

According to the statement, the audited accounts have since been formally approved by the NNPC board in line with extant laws governing the operations of the national oil company. The group’s audited financial statement for 2017 is also expected to be ready not later than June 30, 2018, as stipulated by the Act.

However, the NNPC has not made the account public and unlike its financial and operations report, it has not uploaded it on its website. The corporation has used the publication of its operation’s report to furnish claims of its transparency but the documents alone do not qualify as an example of full disclosure.

For one, they are not audited statements but simply a record of NNPC’s financial and operational activities that have not been subjected to the rigour of examination. This means that claims of crude oil lifting cannot be backed by records and transactions including oil sales are not supported by relevant documentation.

It is also significant to note that the reports are riddled with errors and are largely inconsistent with realities on ground. NNPC in the reports is silent on the contentious issues of operation of subsidy regime and details of contracts it awards are not revealed.

NNPC in its recent statement was silent on whether the auditor’s reports had been presented to the Federal Executive Council (FEC) for approval in compliance with the corporation’s establishment Act.

This situation calls for an urgent assent to the Petroleum Industry Governance Bill (PIGB) by the president having passed both houses of the National Assembly. The PIGB will break apart the NNPC and create an effective structure for oil governance in the country.

NNPC’s opaque operations have been allowed to continue by successful governments because it is a conduit pipe to ferret public funds by corrupt governments and finance fraudulent elections. This administration, despite its pretence of fighting corruption, by allowing NNPC continue to operate without accountability, proves it is just as corrupt as others before it.

ISAAC ANYAOGU

The writer can be reached via isaac.anyaogu@ businessdayonline.com or +2347037817378