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NNPC, FAAC and the rest of us

NNPC

IT is worrisome that non-remittance or diversion of the Nigerian National Petroleum Corporation (NNPC) revenue, the key element of the alleged corruption allegation upon which a vicious political war was waged and won against the government of President Goodluck Jonathan in 2015, is still very much with us despite three years of “change” under President Muhammadu Buhari.

We are seriously dismayed by the ongoing war over oil revenue accruals and allocation between the Federation Account Allocation Committee, FAAC, and the Nigerian National Petroleum Corporation, NNPC.

The present stand-off where a FAAC meeting had to be suspended indefinitely has the potential of addressing the fiscal irresponsibility that has been bedeviling Nigeria’s public finance for too long, at least to some extent. We hope this opportunity should not be missed to reconnect fully with the principles of the Fiscal Responsibility Act which has been eroded.

This issue is not merely a matter of honouring a gentleman’s agreement between the NNPC and the state governments as the Corporation is making it seem. It is squarely about transparency and due diligence in the administration of public finance.

The NNPC had accused state governors of making unnecessary demands, stating that the governors are asking it to remit additional N40 billion to the FAAC, and lamenting that the fresh demand was in breach of the agreement it had with the governors.

Though we acknowledge that the Corporation has other important commitments such as meeting its Joint Venture Cash Callobligations, deductions of Premium Motor Spirit (PMS) “subsidy” and pipeline maintenance, we still believe that such considerations should be transparent, understood and accepted by all stakeholders.

We are afraid the situation could escalate in the face of the election season. The Federal Government’s continued over-bearing influence on NNPC may tip over to the extent of either raking its electoral funding from the Corporation or denying the states, especially those in opposition, their rightful access to statutorily guaranteed revenue either in full or in part.

Nigeria’s public finance executives have betrayed public trust for too long in allowing this controversy over NNPC’s remittances to the Federation Account to linger for this long. The only progress made so far in the many decades of the existence of NNPC is that we can now discuss the Corporation’s finances in the open though it has not changed the oil firm’s attitude of seeking to keep stakeholders in the dark.

We believe that as long as the old model of tying the NNPC to the apron-string of the ruling party and government of the day remains, we will continue to run around in circles. We must unbundle this corporation to run as a modern, profitable business, just like other state-owned oil firms around the world.

 

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