The only thing said to be constant is change. And when change is seen to be deliberately directed to-wards a positive end, it behold on men of goodwill to commend those who are courageous to initiate them.
Recently, the management of the Nigerian National Petroleum Corporation (NNPC) under the leader-ship of Mallam Mele Kyari affirmed its commitment to imbibe positive change when it announced the venture into a relationship with the global transparency watchdog in the extractive industry, the Ex-tractive Industry Transparency Initiative (EITI).
The move which may have come as a surprise to many critics of the national oil company is best de-scribed by the EITI Board chair, Rt Hon. Helen Clark, who saw the initiative as the best thing to have happened to the Nigerian oil and gas industry.
Commenting on the development Clark said, “NNPC plays a vital role in Nigeria’s economy. Joining the EITI as a supporting company is a welcome step in the NNPC’s journey toward achieving greater trans-parency and to help ensure that Nigerian citizens benefit from their natural resource wealth.”
Coming at a time when government owned institutions are seen on television resisting attempts by committees in the National Assembly to probe their financial activities in adherence to rules of trans-parency and accountability on how public funds are utilised, is a welcome development.
Embracing the bold step of adopting the virtue of transparency and accountability as propagated by the global transparency outfit will not only diffuse the negative perception in some quarters about the NNPC but demonstrate the current management’s commitment to transform it into a national oil company creating value for the citizens.
This is evident in the fact that the relationship with EITI is based strictly on adherence to its global rules of engagement, hence it is expected to give further impetus to NNPC’s corporate vision of greater transparency and accountability in three key areas. Namely, the scope for advancing transparency in revenues and payments to government; contracts governing petroleum exploration and production; and consolidated group-level financial statements.
The name NNPC, strikes a curd in the mind of every Nigerian, as the corporation plays a dominant role in the provision of energy and sustenance of the nation’s economy.
Established in 1977, it represents Nigerian government’s interest in the Oil and Gas Industry.
The obvious fact that the Petroleum Sector accounting for about 90 per cent of the country’s foreign exchange earnings, makes it imperative for transparency and accountability to be entrenched in the corporation in particular and, indeed, the Nigerian Oil and Gas Industry in general.
Prior to the latest development, analysts had advocated for financial probity in the NNPC, stressing that doing so is capable of boosting the nation’s domestic resource mobilisation efforts towards ensur-ing social economic development. Stakeholders also argue that it can also have the domino effect with other critical agencies of government imbibing the ennobling virtues in corporate governance.
Confronted with this critical but factual criticism, the current leadership of NNPC has committed itself to conducting the corporation’s businesses in a transparent and accountable manner. First, by deploy-ing Artificial Intelligence (AI) to boost the accounting processes of its Corporate Headquarters, subsidi-aries, companies and Corporate Services Units (CSUs) and making public its books to cast away the to-ga of opacity associated with extractive industries generally.
Striving ahead to prove its commitment to transparency, the corporation on June 11, 2020, published the 2018 Audited Financial Statement (AFS) of 19 of its subsidiary companies nationwide. The move was not only unique in that it was the first time the National Oil Company came clean to let the general public have unhindered access to its audited accounts since it was incorporated, the group managing director, NNPC, Mallam Mele Kyari assured Nigerians that the 2019 edition will soon be released.
But before the public presentation of the AFS, NNPC had on a monthly basis sustained the publication of its Financial and Operations reports in the national dailies, its website and in other online media.
The consistent release of the Monthly NNPC’s Financial and Operations Report as well as its 2018 AFS amid other measures been employed to ensure that the corporation lives up to the new manage-ment’s set agenda of transparency, accountability and performance excellence across the corporation have not gone unnoticed. Already stakeholders who are impressed with the bourgeoning adherence to the twin principles of transparency and accountability in the National Oil Company have publicly acknowledged the efforts.
Commenting on the release of the AFS in June, executive secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Mr Waziri Adio, said the feat fulfilled a pledge by Mallam Kyari at an engagement with the Nigerian anti-corruption watchdog during the visit to Nigeria of Mr Mark Robin-son, the executive director of the global body, the Extractive Industry Transparency Initiative (EITI). Adio urged NNPC to make its adherence to probity a routine practice.
Similarly, the governor of Akwa Ibom State, Mr Udom Gabriel Emmanuel, while welcoming the NNPC Board members to the state Government House in Uyo recently, said his membership of the National Economic Council had exposed him to the activities in the Oil and Gas Industry. He emphasised that the Council has noted the positive impact the crop of the management and Board of NNPC is making in the economy of the nation, particularly with respect to adherence to transparency and accountability in the Petroleum Sector.
It is against this background that the big move to join the club of EITI support company by the NNPC on August 18, 2020 can be described as a new dawn with regards to openness in its business dealings.
As an EITI Partner company, the NNPC has not merely joined a group of 65 other extractives compa-nies, state-owned enterprises, commodity traders, financial institutions and industry partners but a commitment to observing the EITI’s support company expectations. These EITI’s supporting company expectations require that NNPC: Publicly declares support for the EITI Principles: promoting transpar-ency throughout the extractive industries, helping in public debate and provision of opportunities for sustainable development; Publicly disclosing taxes and payments; Publicly disclosing beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors.
Others includes, Engages in rigorous procurement processes, including due diligence in respect to partners and vendors; Delivers natural resources in a manner that benefits societies and communities; and Ensures that company processes are appropriate to deliver the data required for high standards of accountability.
Mallam Kyari has affirm the corporation’s commitment to these expectations, saying the NNPC be-coming an EITI company aligned with its corporate vision and principles of Transparency, Accountability and Performance Excellence (TAPE), which his management team has championed since assumption of office as NNPC helmsman on 8 July, 2019. He assured that the National Oil company was on a trajec-tory towards greater transparency and would continue to collaborate with NEITI and EITI and other such bodies.
NNPC’s admission to the league of EITI Partnering companies has also drawn accolades from other sig-nificant individuals in the extractives and financial establishments.
For example, Nigeria’s minister of finance, budget and national planning, and a former EITI Board member, Zainab Ahmed, affirmed that the increased transparency in NNPC’s revenues was already contributing to improvements in Nigeria’s domestic resource mobilisation efforts.
Meanwhile, evidence abound that becoming an EITI supporting company can help state-owned com-panies make progress on the journey to transparency. A recent example is Qatar Petroleum, which has been an EITI supporting company since October 2019 and has now published its annual and sus-tainability plans for the first time.
However, for the upward trajectory of NNPC in respect of transparency and accountability to be meaningful in the larger Nigerian business environment, other critical segments of the economy need to embrace these virtues of openness and accountability in order to boost the Country’s image among the comity of nations and, more importantly, to ensure that the national treasure effectively benefits the more than 200 million Nigerians who are the stakeholders of the National Oil Company.