Waiting for NNPC’s audited account?
The Nigerian National Petroleum Corporation (NNPC) is yet to produce an audited account two years after the Buhari government seeking to end corruption came into office on May 29, 2015.
Long enmeshed in corruption scandals, Nigeria’s national oil company continues a tradition of operating with opacity similar to the Italian mafia, almost insulated from the overreach of the much-touted war against corruption and transparency obligation for statutory institutions.
The 2017 Resource Governance Index, compiled by the Natural Resource Governance Institute (NRGI), found that value is lost particularly in licensing and in NNPC’s sales of government oil, as well as when revenues from oil and gas are shared and saved.
Sarah Muyonga, Nigeria country manager for Natural Resources Governance Institute said that NNPC has made some new disclosures under the Buhari administration, but the details and revenue implications of many of its high-value transactions remain secret.
Muyonga further said that the Nigerian government does not regularly publicly disclose government officials’ financial interests in the extractive sector or the identities of beneficial owners of extractive companies. This enables widespread corruption, with which Nigerians are all too familiar.
Last Friday, Anthony Ayine, Auditor General for the Federation visited the NNPC group managing director and commended the national oil company for preparing its accounts up to 2014. The last time the NNPC published an account is in 2010.
Yet, the Nigerian Securities and Commission (SEC) mandates publicly quoted companies in the country to publish their annual returns yearly and on time.
“Capital markets all over the world thrive on investor confidence which is largely built on availability of timely and reliable information. Financial reporting helps to reduce information asymmetry between company insiders and external investors. For this reason, regulators and participants alike have various roles to play in facilitating a well-functioning capital market that narrows the information gap in order to ensure that investors are empowered to make sound investment decisions,” says a public notice published on SEC website.
The NNPC though not a publicly quoted company, is required by the Act setting it up to publish its audited financial statements, for about the same reasons that publicly quoted companies are compelled to publish their returns.
In response to public scrutiny of its activities, the NNPC began publishing its monthly financial and operations report since August 2015 but disclosures of key transactions are not captured including information on royalty payments, taxes and other big ticket transactions.
Waziri Adio, executive secretary of the Nigerian Extractive Industries Transparency Initiative (NEITI) in an earlier comment said that what NNPC has done with its monthly reports could be termed a sea-change. From being the poster-boy for opacity, NNPC is voluntarily embracing openness and providing near real-time information about the state of play of our oil and gas sector today but it needs to open more, echoing the view of many stakeholders.
Maikanti Baru, NNPC GMD said that transparency and accountability had become a way of life for management and staff of the Corporation noting that the era of unpublished or accumulated NNPC audit accounts had been confined to the history book.
He told the Auditor General that “This explains why we publish our operations and financial reports every month so that not only your office but the general public could follow the trail. I don’t think there is any government institution that has demonstrated this level of transparency,” Baru said.
The GMD said that the Corporation hopes to conclude on the 2015 audited account latest by the end of August 2017 while preparation of the 2016 audited account which began about a month ago would be concluded by the end of 2017.
ISAAC ANYAOGU