Where did all the monies go to for the GMD to come up with this type of distress call-Jupiter?
The decisive question which has never been raised, let alone answered, is what are the driving forces within NNPC that have led to the situation where corruption and even criminal activity have come to play such a central role. NNPC is perhaps, the largest Nigerian corporation. It is not only a market leader, it is also a market maker.
The scenario revealed by the countless fraud inquiries are rooted in the arrogance of the executives who become confident that nobody, not even the Economic and Financial Crimes Commission (EFCC) is looking over their shoulders, watching and understanding what they are doing. The story of NNPC is not just a story of a company that quietly hurls murk it generated on itself or the story of a company that could not keep its multi-billion Naira refineries running consistently for a day; it is the story of a system that failed and the system did not just fail through some unforeseen error; it was corrupted.
Indeed, the NNPC story reflects the deep ways in which the institutions governing our economy have been ruthlessly corrupted. The corruption of NNPC is underpinned also by the corruption of the system which is supposed to control it and that is why no probe can ever yield any type of result-reward or penalty.
The significance and implication of the corruption that is NNPC can only be grasped by examining it within the context of Nigeria’s corrupt system. This is the only country in world where corrupt public officials get chieftaincy titles, buy houses in Dubai, London and elsewhere in the US and nobody raises a question. It is a country where billions of Naira is voted for turn-around-maintenance of the refineries and the voted fund is shared between the contractor and those who facilitated the contract award-the refineries are not turned-around and nobody asks questions. It is a country where countless deals are agreed by ‘settlement’.
All of these points to a crucial feature of the political economy of recent era. Under conditions where ‘wealth’ increasingly take the form of gains from political office appointment or office holding, the offices require an ever-greater inflows of funds-a veritable “wall of money”-to sustain it.
Those who are able to get into any of the offices, and at what ever price, which would have previously been agreed on as ‘sensible’, work assiduously hard to find cutting-edge methods to fleece the corporation to provide the pay-back fee to keep the vibrant cycle of irrational wealth flowing within their circle.
This irrational wealth chasing hunger in NNPC is one of the reasons why past decades has seen the dismantling of all the refineries in country and the shift to importation of all the fuel consumed in the country and the Federal Government forced to continuously pay a subsidy equivalent to the country’s entire annual capital spending.
It has also been part of the reason why petroleum officials chase around China state Construction Engineering Corporation officials to spend $23 billion on new refineries with combined capacity of 750,000 bpd when they are struggling to sustain the established ones around the country with smaller capacity.
The key to NNPC mess is that the corporation has all along been allowed to operate like a wonder bank where money is sucked in from everywhere without strategic exit plan and so it has been allowed to give misleading financial information over the years.
It is not that it’s executives-past or present- come in as corrupt or dishonest individuals, rather, an environment was deliberately created for it to evolve into a criminal enterprise. The environment it operates in is conditioned by the deep-seated crisis of the profit system itself, which dictates their resort to dubious practices.
Moreover, the existence of numerous conflicting function centers, conflicting accounting and reporting processes, the absence of audit standards and the development of selfish special interests by top government officials clears the way for NNPC management-who themselves become the outcome of the environment. All of these systems control points are no less subject to the pressures of the environment than the managers of the points.
So the debacle that is NNPC’s finances today is not as much a product of the failure of accounting methods but it is deeply rooted in the structural defects in the system itself. The subordination of the production of wealth to the extraction of private profit-the basis of the corrupt society-has now reached such a state of rot that fraud and deception have become the modus operandi.
The big question is how can this be controlled? Yes, there will be need for tighter accounting processes backed by proper accounting rules and procedures. But there are other much more transparent rules to apply.
For instance, real control systems must be developed which must not be applied by those elements created by the corrupt system but by the society as a whole, the producers of the wealth who are able to democratically determine how the wealth shall be utilized.
The need to encourage the evolution of a cleaner corporation is the strongest reason to hold on to this as anchor. NNPC requires deep reforms: modernising its operations and making its accounting process more transparent. This will be slow to evolve as a basis for ‘repair’, but it will be beneficial in the end. The public should force the Federal Government to press through reforms that they unforgivably failed to demand before now.
CHARLES IKE-OKOH
