Energyday Editorial Board
For an administration severally beset on all sides by accusations and criticisms of non performance, and enormous waste of voters’ goodwill; the signing into law of the Petroleum Industry Bill to become Petroleum Industry Act, appeared an enormous booster to the sinking image of the administration, amidst growing insecurity and economic uncertainty.
It is quite understandable that the Buhari administration would look for ways to show Nigerians and the wider world, that it has not been a sitting duck, but a government committed to turning around the economy for the better.
The opportunity came when the Nigerian National Petroleum Corporation, NNPC, declared an unprecedented profit of N287bn , the most spectacular gains of the national oil company in its 44- year history.
Immediately, the administration’s spin doctors and handlers went to town with relish and open glee at the expense of its critics, eulogizing the administration’s prudent handling of the economy, and within 24 hours, the enormous profit became subject of salon talks, discourse on social and mainstream media.
But not everyone is clapping, as in the midst of the din of razzmatazz and clapping of hands on the side of government, a growing number of informed, perceptive economists and analysts have picked holes in the NNPC narrative, many of these are leading lights in economy such as Atedo Peterside.
EnergyDay joins a growing number of Nigerians who are demanding that the NNPC and the Buhari administration should come clean on the profit by telling us what has transpired between 2019 and 2020 to turn around a nine- year consistent losses of the Corporation into a giant oases of gains as spectacular as the one declared.
The Corporation owe Nigerians an explanation, it is not just enough to tell us of the profit, we need to know what kind of productive ventures the Corporation embarked on as to yield that huge profit declared.
Proclaiming the new feat, the excited President said, “I am pleased to announce the declaration of profit after tax of N287bn in year 2020 by the Nigerian National Petroleum Corporation. Besides this is sequel to the completion of the statutory annual audit exercise for year 2020.
“The NNPC losses were reduced from N803bn in year 2018 to N1.7bn in year 2019 and the eventual declaration of net profit in year 2020 for the first time in its 44-year history.”
However, the numbers seem not to have gone down well with financial and energy experts. As criticisms have continued to trail the announcement.
Punching holes in the figures announced, Dr Nnaemeka Obiaraeri, an economist stressed the need for the Corporation to make available the comprehensive report for critical analysis.
He described the result as deceitful and “manipulative balance sheet engineering, by consolidating the Corporations of independent entities set up by Acts of Parliament for the benefit of the federation.”
Probing the report, he said, “I made a clear submission, where I clearly outlined that the NNPC as a corporation and entity cannot point to any productive or trading activities that is executed in 2020 to generate and report such huge profits of N287bn in 2020 from a consistent 6 years loss positions ( 2015 to 2020).
“From my desktop review and analysis , I knew straight away, that it is either they reported bubble paper profit to enable them debit a ledger for a particular nefarious game or they engaged in unwholesome balance sheet engineering games . Now, it is getting clearer, he said.
Expatiating, he said, “What the Group Managing Director of NNPC, Mele Kyari presented as profit from direct NNPC operations and activities is actually a retention of 20% of the profits and dividends paid by independent entities, which the NNPC received on behalf of the federation (FGN, States and LGAs). This is the first time they are allowed to retain such.
“According to a reliable source, before now, the FGN and the states used to collect 100% of all the dividends paid by these independent entities .
“However, in 2020, the NNPC decided to retain the 20% from the dividends paid the the NLNG, the NGC, the West African Gas Pipeline (Operated by Chevron) etc and consolidated same in their balance sheet.
“So, what they reported were retained portions of the dividends paid by other entities for the Federation. All the poppycock by Melee Kyari of improving efficiency at the NNPC and cut cutting cost measures over the last one year are just hogwash. NNPC as an entity under him, its operations and that of the three refineries are cesspool of losses and perfidy . Don’t be deceived by their tales by moonlight,” he said.
Further critiquing the report he said, “It is a grave affronts to our sensibilities and intelligence for these guys to receive about $2.5billion/N1trillion (using CBN official rates) as combined dividends on behalf of the federation from independent entities established by acts of Parliament for the benefits of the federation, consolidate the retained 20% portion of dividends meant for the Federation accounts and then report it (N287bn) as profits made from the activities of a corporation that did nothing, other than , import pms at a loss under subsidies and ignorant people clap away without asking questions.
For those, who have the discipline, knowledge, ability and time, kindly fish out the 2019 audited financial reports of the following independent entities set up by acts of Parliament for the benefits of the federation:
“The NLNG; The West African Gas Pipeline Company (Operated by Chevron); The Nigeria Gas Company(NGC); Duke Oil; The NPDC; Bonny Transport Company; Wheel Insurance ; etc
“When you add up all of the dividends for the year ended 2019, which was declared, paid and transferred to the NNPC accounts in 2020 on behalf of the federation , you will get in excess of over $2.5bn/N1trillion (using the CBN official rate). The above position was towed by Atedo Peterside, a respected economist .
Peterside, founder of IBTC Stanbic Bank, has thrown his hat to the ring, asking the NNPC to make more clarification in order to dispel allegations that it dipped its fingers in the federation account in order to announce a profit of N287bn.
In a tweet penultimate Sunday, Peterside said, “There is an allegation that NNPC dipped their fingers in the Federation Cookie Jar in order to announce bumper 2020 profits; they should come clean and publish details of all dividends received by them and tell us which ones they recently diverted from the Federation to themselves.”
EnergyDay urges the administration and NNPC to provide more information, for the integrity of every government rests on transparency and full disclosure. Anything short of this, will only invite more doubts on the unprecedented profit saga.