The Nigerian National Petroleum Corporation (NNPC) has failed to account for billions of dollars in the last few years.
Nigeria’s new President Muhammadu Buhari plans to take his announced anti-corruption drive to the State-owned Nigerian National Petroleum Corporation (NNPC) by splitting the company into two entities. This will be the concrete implementation of the country’s oil policy under his regime that will focus on reform first and taxes last, Reuters reported.
"Mr President will soon split the NNPC into two entities. One will be an independent regulator and the other one an investor vehicle," Reuters quoted Buhari’s spokesman, Femi Adesina as saying without stating the timeframe for the restructuring process. The NNPC is said to currently represent national interests in oil and gas exploration, manages the energy sector and is the industry regulator in crude producer. However, the company has been accused of failing to account for billions of dollars in the last few years although it has said that the money was not lost. A report by the National Economic Council in June 2015 indicated that the Nigerian National Petroleum Corporation had earned about 41 billion U.S. Dollars between 2012 and the end of May 2015 but paid only 21.6 billion U.S. Dollars to the federal government. The former Central Bank Governor Lamido Sanusi reportedly carried out an investigation in NNPC in 2013 and found out that it failed to pay 20 billion U.S. Dollars to government accounts between January 2012 and July 2013. The NNPC argued that the money could be accounted for, Reuters said.
Muhammadu Buhari’s plan to split NNPC in order to curb corruption will just be a logical follow up of actions earlier taken to overhaul the precarious management in the company. This is because in June 2015, he dissolved the NNPC board with more sackings expected.
A source from the company who preferred anonymity reportedly told Reuters that the planned changes were long overdue for, “We can’t continue to be a regulator, a revenue collector and a business, all rolled into one. That gives room for a lot of confusion, obfuscation and misrepresentation.”
Reports say that under the Nigerian constitution, the NNPC is supposed to hand over its oil revenue to the federal government, which then pays back what the firm needs based on a budget approved by parliament. However, the act establishing the state oil company allows it to cover costs before remitting funds to the government.
