NRGI faults NNPC’s Annual Financial Report

NNPC

 

THE Natural Resource Governance Institute, NRGI, questioned the persistent accountability challenges in the Nigerian National Petroleum Corporation’s, NNPC, annual financial report. In its 2017 Resource Governance Index dedicated to measuring the quality of resource governance of 81 countries around the world, the NRGI said NNPC as the largest state-owned enterprise in the continent, achieved a poor governance score of 44 out of 100 in terms of financial accountability.

The NRGI said the corporation mainly scored well on indicators that measure elements of transparency required by Extractive Industries Transparency Initiative, EITI, reporting such as transfers to government and production volume disclosure. However, the company does not disclose detailed annual reports on its finances, despite top officials having made a commitment to do so. “Little information is publicly available, particularly concerning some of NNPC’s least efficient and most questionable activities, notable earnings by its subsidiaries, the costs of its operations and its significant spending on non-commercial activities,” it said.

It said government agencies and external auditors have disputed NNPC’s interpretation of rules set in the constitution and the NNPC Act governing monetary transfers between NNPC and the government. “Officials exercise significant discretion around how NNPC sells the government’s share of oil production- for example when selecting buyers, pricing exports or transferring sale proceeds to the government.”

The index measured performances of eighty-one countries, including Nigeria that produces a combined 82 percent of the world’s oil, 78 percent of its gas and a significant proportion of minerals, including 72 percent of all copper. The NNPC has consistently faced criticisms over its lack of accountability, especially in its financial transactions.

This has aroused a clamour for reform, leading to an ongoing process of unbundling of the corporation to ensure better transparency and accountability. Part of the process for accountability in the corporation would be speedy passage of the Petroleum Industry Governance Bill, PIGB.

 

– Dec. 1, 2017 @ 13:21 GMT

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