APC, NNPC and procurement disease
I wonder how Governor Nasir el Rufai of Kaduna State feels at the moment. I wonder what his thoughts are now of the Nigerian National Petroleum Corporation (NNPC). Remember his ‘kill NNPC or NNPC will kill us’ theory in the early days after the enthronement of their party? He waxed lyrical about his prescription for the corporation and the oil industry, which at the time was thought to be in a hopeless state, after the last regime made mincemeat of it.
It was in July 2015, the new government had been installed and all those who worked for the party, saints all of them, were upbeat on how to unleash a sinless regime where there is no corruption. El Rufai was to deliver a media lecture to mark the 81st birthday of Nobel Laureate, Prof. Wole Soyinka. He got for himself a fitting topic on how to sanitse the NNPC, which in its apogee of malfeasance was about to kill Nigeria. He thus propounded the topic urging that we kill NNPC before it kills Nigeria.
According to Rufai, the corporation was due for scrapping, because it had constituted itself as a parallel government, refusing to remit revenue to the Federation Account and refusing to surrender its budgets to the National Assembly for scrutiny.
He said: “The long and short of the situation of our oil industry is best exemplified by the parallel government called the NNPC. In 2012, it sold N2.77 trillion worth of ‘domestic’ crude oil but paid only N1.66 trillion to the Federation Account.“In 2013, it earned N2.66 trillion but paid N1.56 trillion to FAAC; in 2014, N2.64 trillion but remitted N1.44 trillion, while between January and May 2015, it earned N733.36 billion and remitted only N473.2 billion.
“That means that the NNPC only remitted about 58 per cent of the monies earned between 2012 and the first half of 2015. A company with the audacity to retain 42 per cent of a country’s money has become a veritable parallel republic.“If we do not kill NNPC, NNPC will kill Nigeria. Any organisation that takes 50 per cent of federation revenue for itself and gives you the change has no right to exist. It is evil, it must die, it is just the manner of the death that we must talk about.”
Many agreed with el Rufai then, especially given the passion he exhibited in driving home his point. Nearly everyone knows that the oil industry is the headquarters of scam in the country, while NNPC is the epicenter. But governments never had the political will to hand it over to private operators, because it is the source of slush funds for political patronage and for oiling the parties, preparatory for elections. They use NNPC to allocate oil blocs to themselves, family members and friends. Even during the military era, it was as bad, which was why there are records of missing oil windfalls before the Gulf war and after.
But since 1999, it has been very bad. The minister of petroleum resources was pocketed by former president Obasanjo, as he thought it was safer to do so. He wouldn’t trust it with any other person. Yet, as bad and hopeless as the Peoples Democratic Party (PDP) was thought to be, the period under Obasanjo saw some attempts to enthrone accountability in the oil sector. The civil society driven Nigeria Extractive Transparency Initiative (NEITI), was domesticated to track oil receipts, so that leakages between production and payments into federal coffers are monitored. The procurement law that is now the bone of contention between minister of state for Petroleum Resources, Ibe Kachikwu and Group Managing Director (GMD) of NNPC, Maikanti Baru, was pieced together under Obasanjo, with a view to enthroning transparency in government procurement processes. It was discovered that contracts are the major conduit through which resources are stolen, whereas, no job ever gets done. Instead, there are abandoned projects all over the place that are budgeted for every year.
In the last days of the Obasanjo Presidency, he hurriedly sold the refineries, apparently having listened to counsel of el Rufai, who was an active member of that government. But president Yar’Adua, who may have smelt a rat in the manner of the sales, reversed it, and returned NNPC and its subsidiaries to their old ways of crass opaqueness. But he wasted no time in signing into law the procurement act in 2007.
However, in the last years of the PDP in government, zero attention was paid to issues of transparency, despite the procurement law being in force and a Bureau in place to administer due process.
Which was why many Nigerians were happy that the saintly APC had come onboard to clean the stables. El Rufai was thus on point, when he advocated a new company to replace the NNPC, one that could raise funds from the capital market and the international financial market for its operations, instead of waiting for an Acting President Yemi Osinbajo to give presidential backing for joint venture loans the poor man is now struggling to explain.
So, el Rufai was correct when he advocated that: “We need a mix of fresh strategic thinking and a firm commitment to reform. We need to define exactly what we want the oil industry to be and to achieve, and then define the structure that can best deliver it. An efficient and productive oil sector, able to create jobs, spur industrialization and earn more revenues requires that we tackle the monster that the NNPC has become.“This country can no longer afford to maintain an NNPC that arrogantly, unlawfully and unconstitutionally spends an unhealthy proportion of national oil earnings on itself.”
Talk is cheap! Two years down the line, APC has not reformed anything. It has not even reformed itself to be able to take on other departments of society. But el Rufai must be commended. He used to be one of very few sincere technocrats in government who knew the governance challenges that bedevil the country. But I cannot say of now, when politics of survival has taken over everybody. However, it is not his fault that his party did not take note of that profound lecture he delivered. It is not his fault that the Presidency does not read. They only leak memos.
Now, when Kachikwu was brought onboard, many thought government was sincere in the quest to follow best global practice, by bringing a man who knows how to turn around our ailing oil sector. He was coming from ExxonMobil, when he was first made GMD of NNPC, but later moved up as minister of state. Only president Buhari knows why he moved the man he brought in for technical duties to the dormant political office of minister of state. What we know out here is that the oil industry and NNPC are sensitive to political leaders. Leaders put trusted men in such sensitive positions and if Buhari acted without ulterior motives in his first six months in office, or naively, he soon became wise. He moved Kachikwu up(?) and positioned Baru.
There will continue to be different interpretations of the Procurement Act as long as government continues to play hide and seek with NNPC. NNPC said they do not need a minister of state to award contracts, yet, the vice president who has acted for much of 2017 did not know what was going on. The man said he only gave approval for two joint venture loans. He did not sign any contract.
It is the same affliction that ails Aso Rock Clinic. Procurement disease does not know parties, as long as the head of government displays crass ignorance of the workings of the bureaucracy. It is either ignorance or deliberate dereliction when a leader refuses to ask critical questions or look carefully for details.
It is now clear as daylight that the APC as presently constituted does not have the wherewithal to cleanse the stables. But considering that we’ve gone this fraudulent road before and the choices now available are too miserly and scary, this is the time for men of good conscience to take another look at the reason the party was put together, which was to alleviate the burden the political class has placed on Nigerians. Not to do anything will be interpreted as criminal negligence when it is time for penance!
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