Department of State Reports: Mele Kyari; Making Nigeria Proud Through Accountability and Transparency

By Adewole Kehinde

I recently came across the “2020 Country Reports on Human Rights Practices: Nigeria” published by the United States of America Department of State.

Going through the Executive Summary, Section 4: Corruption and Lack of Transparency in Government caught my attention and I will quote the particular paragraph:

“In June the Nigeria National Petroleum Corporation released audited 2018 financial statements, the first such release since its establishment in 1977. The corporation also published audited accounts of its 20 subsidiaries and business divisions. In December the federal government launched the Financial Transparency Policy and Portal, commonly referred to as Open Treasury Portal, with the aim of increasing transparency and governmental accountability of funds transferred by making the daily treasury statement public. The Open Treasury Portal required all ministries, departments, and agencies to publish daily reports of payments greater than five million naira ($13,300). The Nigeria Extractive Industries Transparency Initiative and other anticorruption watchdog groups hailed the government for providing better access to government spending data. ”

Since his resumption as the 19th Group Managing Director of Nigerian National Petroleum Corporation on July 7, 2019, Mallam Mele Kolo Kyari, made history on Friday, June 12, 2020 with the publication of its first audited financial statements after 44 years of its operation

The annual reports and financial statements for the year ended December 31, 2018, were for 20 of the state-owned national oil company’s subsidiary companies operating within and outside the country

The companies covered in the reports published in corporation’s website on Friday, June 12, 2020 included the Nigerian Petroleum Development Company (NPDC), Warri Refining & Petrochemical Company Limited (WRPC), Port Harcourt Refining Company Limited (PHRC), Kaduna Refining & Petrochemical Company (KRPC), and Integrated Data Services Limited (IDSL), Nigerian Products and Marketing Company Limited (NPMC), Nigerian Pipelines and Storage Company (NPSC).

The others include the National Engineering & Technical Company Limited (NETCO), Nigerian Gas and Marketing Company Limited (NGMC), Duke Oil Services (UK) Limited, Duke Global Energy Investment Limited, Duke Oil Incorporated, NNPC Retail Limited, National Petroleum Investments Management Services (NAPIMS), The Wheel Insurance, NIDAS Shipping Services, NIDAS UK Agency, and NIDAS Marine.

Barely five months after publishing its 2018 Audited Financial Statement, the Nigerian National Petroleum Corporation (NNPC) also released its 2019 Audited Financial Statement with a 99.7% reduction in its loss profile from ₦803bn in 2018 to ₦1.7bn in 2019.

According to a statement by the Corporation’s spokesman, Dr. Kennie Obateru, he quoted the NNPC Chief Financial Officer (CFO), Mr. Umar Ajiya, as saying that the 2019 Audited Financial Statement, which was concluded five months after the release of the 2018 Audited Financial Statement, will be published on the Corporation’s website for all to see in keeping with Management’s commitment to transparency and accountability and in consonance with the principles of the Extractive Industries Transparency Initiative (EITI) of which it is a partner.

Giving further insight into the 2019 AFS, the CFO disclosed that general administrative expenses also witnessed a 22% dip from ₦894bn in 2018 to ₦696bn in 2019.

According to Ajiya, majority of the subsidiaries posted improved performance namely, the Nigerian Petroleum Development Company Limited (NPDC) which recorded ₦479Billion profit in 2019 compared to ₦179Billion in 2018 representing 167% increase; the Integrated Data Services Limited (IDSL) recorded ₦23Billion profit in 2019 compared to ₦154Million in 2018 representing 14966% increase; the Petroleum Products Marketing Company (PPMC) recorded ₦14.2Billion profit in 2019 compared to ₦9.3Billion in 2018 representing 52% increase; while the Refineries have maintained the same level of losses as in 2018 but which will reduce significantly in 2020 due to cost optimization drive.

The CFO explained that the improved performance in the 2019 financial year was driven mainly by cost optimization, contracts renegotiation and operational efficiency. He said “the 2019 Audited Financial Statement goes further to demonstrate NNPC’s unwavering commitment to the principle of Transparency, Accountability and Performance Excellence (TAPE) while the outlook for 2020 looks promising in view of the Management’s strong drive to prune down running cost and grow revenues.”

It would be recalled that the Group Managing Director of NNPC, Mallam Mele Kyari, had promised to sustain the publication of the Corporation’s Audited Financial Statement as part of efforts to deepen transparency and accountability and keep stakeholders abreast of NNPC operations.

Every year, the United States releases status reports on countries across the World, based on intelligence gathered from its representatives in these countries and from diplomatic intelligence exchange. For Nigeria, the Report singled out the NNPC as most transparent and accountable.

The Transparency, Accountability and Performance Excellence (TAPE) initiative of the Group Managing Director of the NNPC earned Mallam Mele Kolo Kyari commendation from the former Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Waziri Adio, for keeping his promise to publish the audited reports.

Waziri Adio through a tweet with his personal twitter handle, @Waziriadio said, “Having such disclosures is good for transparency and accountability. I congratulate Mele Kyari and his team and urge them to make this a regular practice and in open data format.”

We may recall that Nigeria Extractive Industries Transparency Initiative has been in the vanguard of the sustained demand for the NNPC to make public the financial statement of its operations and those of its subsidiaries.
Also, the NNPC under Mallam Mele Kolo Kyari received the Swift Reporters 2020 Most Transparent and Accountable Government Agency. The Publisher of Swift Reporters, Adewole Kehinde said that the NNPC has gained more in terms of reputation and goodwill from being transparent; not forgetting that trust in business requires corresponding responsibility of accountability to all stakeholders.

On assumption of office, Mallam Mele Kyari pledged to open the NNPC financial books to the public as part of his management’s commitment to openness, transparency, and accountability in line with the global EITI principles.

Since 2019, the NNPC has always published the monthly financial and operational reports, including its upstream, downstream and oil and gas export activities.

The NNPC’s Financial and Operations reports constitute the following and more: NNPC Audited Financial Statements; NNPC Monthly FAAC Reports; National Crude Oil & Natural Gas Production, Lifting and Utilization; Refinery Operations; Petroleum Product Supply & Distribution; Budget Performance Report and Federation Crude Oil & Gas Revenue.

The United States of America Department of State 2020 Report is another feather to the accountability and transparency introduced by Mallam Mele Kolo Kyari into the Nigerian National Petroleum Corporation and it sure would take him to places none of his predecessors has ever seen or been before.

Adewole Kehinde is the Publisher of Swift Reporters and Public Affairs Analysts based in Abuja and can be reached via 08166240846, 08123608662