It was no other person but President Muhammadu Buhari himself who broke the news that the Nigerian National Petroleum Corporation, NNPC, has disclosed a net profit, first time in the 44-year history of the establishment. An elated president, who doubles as Minister for Petroleum Resources, announced the declaration of profit after tax of N287 billion in 2020 by the NNPC. This is sequel to the completion of the statutory annual audit exercise for 2020.
A press statement titled ‘President Buhari Excited over NNPC’s Profit after Tax” issued by Mr Femi Adesina, the President’s Special Adviser on Media and Publicity, said, “This development is consistent with this administration’s commitment to ensuring prudent management of resources and maximization of value for the Nigerian people from their natural resources.
Thereafter, the Group Managing Director (GMD) of the NNPC held a press conference where he attributed the turn-around of the corporation from a loss of ₦803bn in 2018 to profit of ₦287bn in 2020 to the aggressive implementation of cost-cutting measures, improved efficiency through business automation, emphasis on commercially-focused investments and non-interference in the management of the corporation.
Indeed, a jinx was broken. It was uncommon akin to a man bites dog doctrine in journalism that explains how an unusual event is more likely to be reported as news than an everyday occurrence. Little wonder that the news of the NNPC financial profit was trailed by many reactions, most of them negative. It was a bit unbelievable for a corporation that has made a name for itself as a conduit pipe through which those in power siphoned Nigeria’s common wealth into their private pockets to now become profitable.
In 44 years, the organisation that has been in charge of the country’s main source of income has been running at loss. Nigerians have already resigned to fate, even though they have always known that underhand deals, unaccountability, lack of transparency and irresponsible leadership were responsible for NNPC’s non-profitability.
It is therefore excusable that Nigerians doubted the report of profit by NNPC. It was even more doubtful that the profit declared was for the year in which nations and corporations around the world ran at loss due to the COVID-19 pandemic. NNPC itself posted a loss of N803 billion in 2018, a pre-pandemic year.
The question was how did NNPC make it?
But the corporation’s GMD, Mele Kolo Kyari, was handy with verifiable insights on how the profits were made. He explained that the corporation turned around the N803 billion losses in 2018 to N287 billion profits in 2020 because of aggressive implementation of cost-cutting measures and improved efficiency, among others.
These two measures alone have since been identified by Nigerians as lacking in the running of the country’s affairs. From the executive to the legislative arms of government, unnecessary and over-spending have combined to make the country’s expenditures so high that basic and essential infrastructure could not be adequately provided since independence.
He also attributed the novel profit at the NNPC last year to improved efficiency through business automation. This has been a lacking decimal in Nigeria’s civil service. The public sector has not been one that takes efficiency seriously, and the mindset of an average Nigerian is that public service is simply a welfarist affair. Salaries have to be paid even when productivity does not justify them.
Since July 8, 2019, when he was inaugurated as NNPC 19thGMD, Kyari had strived successfully to match his pledge with action. Barely two weeks in office, he launched his Transparency, Accountability and Performance Excellence (TAPE) agenda and promised to bring about far-reaching changes that would propel the corporation into a lucrative venture that will contribute to, rather than continue to deflate the country’s lean revenue pool.
In that regard, efficiency has to be fired up, as automation was enhanced to augment the necessary human input. Physical presence was reduced drastically where gadgets could deliver. Information technology was deployed for optimum output.
Additionally, rather than see the NNPC as the routine sluggish public service establishment that is meant to just provide jobs for citizens, he made up his mind from the onset to turn it into a profit-making enterprise that has its eyes on commercially-focused investments. Of course, he has succeeded in laying a solid foundation for the vorporation’s transformation into a public liability company that would be run like any business conglomerate around the world.
Contract renegotiation was one tool that the GMD utilised generously to save huge costs in the year under review. Up to 30% of cost was cut off, and that really added to the profit profile of the corporation. All these, no doubt, enhanced profitability at a time that President Buhari signed the Petroleum Industry Bill into law. Nigeria appears to be set for an evolution into large scale industrialisation of the oil sector, and investors – foreign and indigenous – are eager for the initial public offer that should be ready to be floated in the next two years or so.
The watchword has remained accountability and transparency under Mele Kyari’s watch. Those who know him well say he is not the type who cuts corners and so could not have even attempted to refuse to remit funds that are accruable to the federal government or withdraw money from the NLNG Dividends Account. Beyond the fact that the Treasury Single Account (TSA) policy of the federal government does not accommodate such recklessness, Kyari does not belong to the class of Nigerians who relish in dishonesty.
For those who are interested in probing how the NNPC posted its profit margin in a pandemic year without dipping its hands into the federation account or manipulating figures to reflect turn around maintenance as income, Malam Kyari said the books are open for inspection.
The positive changes in the NNPC under Kyari’s watch are not by chance. They are the products of a sharp mind, imbued with knowledge and experience, and propelled by truth, transparency and accountability.
And as a stop press, President Buhari has appointed Mele Kyari as the pioneer chief executive officer of the Nigerian National Petroleum Company Limited, together with its board and management with effect from the date of incorporation of the company.
Ibrahim (Kwakwatawa), FNGE, writes from Kano.
