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Over $20bn Lost To Delayed Reforms In Oil Sector – NNRC

The continued delay in the reform of the Nigerian Petroleum Industry has resulted in the loss of not less than $20billion in direct investments annually, Nigeria Natural Resource Charter (NNRC) has disclosed.

This was part of the revelation during a webinar conference presented at the NNR Charter in Abuja yesterday.

While calling for capacity development in the oil and gas industry, Mr. Tengi George-Ikoli, Project Coordinator of NNRC, revealed that improving the competence of staff through training and providing incentives can safeguard against narrow rent seeking and promote overall organisational effectiveness.

Other speakers at the conference, who called for reforms in the Nigerian National Petroleum Corporation NNPC, argued that the Corporation has maintained the practice of disclosing selective and unaudited monthly operational and financial performance data since 2016.

“Despite the disclosure of information by NNPC in recent times, it is important to examine the implications and unintended consequences of increased information disclosure. Specifically, shining light on some information may leave other issues in darkness.”

“Furthermore, transparency or information disclosure is not an end in itself. It is instrumental for seeking accountability.”

“Too much emphasis on information disclosure is misplaced, especially when the assumption that the availability of information incentivises good behaviour among decision makers fails”, they said.

The speakers also said that information disclosed by the NNPC has to be useful and civil society and the public have to be able to understand and use it.

They also explained that while transparency can point to wrongdoing and identify who should be held accountable; it is redundant in many cases where other accountability infrastructure subverts its impact.

The Group also said that the disclosure of operational and financial information by the NNPC since 2016 has also banked on the preferences of the leadership at the corporation.

According to the statement by George-Ikoli, “the NNPC has one of the more robust remunerations and professional development structures among Nigerian public service organisations.”

“The NNPC’s Leadership Academy was established to provide technical, managerial and executive training within and outside the corporation.”

“In the past, the corporation has publicised its staff anti-fraud training activities. However, it is not clear that the corporations’ investment in staff capacity translates into staff integrity.”

“This is even as recruitment into the corporation as well as appointments to key positions still appears to be subjected to political patronage, socio-ethnic, and religious considerations.”

“In addition, some laws and regulations require equal staffing considerations from all 36 States of the Federation, which can impede the selection of the best and the brightest for advancement.”

The group also called for review of the way the Board of the NNPC is constituted so that the private sector can be accommodated for effective monitoring of activities in the Corporation.

“Provisions for constituting the NNPC Board are stipulated in the NNPC Act, which provides for the Minister of Petroleum Resources to act as Chairman of the board.”

“It also provides for a representative of the Ministry of Finance, but leaves little room for executive directors, with only the GMD of the NNPC represented on the board.”

“While the act allows for private sector participation, there is no representation of private actors on the current NNPC Board.”

“Consequently, the set-up by design and practice make for a heavily government-oriented board, also reflecting the ownership structure.”

According to the Board set-up freely allows for political interference. The minister, who is responsible for policy in the industry, being Chairperson of the board, may be driven by policy considerations at best and political considerations at worse.

“While the current Constitution does not violate the act, NNPC corporate governance might improve if board members are largely independent and selected based on technical capacity and competence.”