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PwC Report: The Way Forward

The next administration should rather not dissipate energy in chasing shadows by looking for scapegoats but rather confront the real problems that impede transparency and efficiency in the management of the petroleum sector

The PriceWaterhouseCoopers’ (PwC) report on the missing 20 Billion Dollars from the Nigeria National Petroleum Corporation, NNPC, seems to have complicated rather than douse the controversy that informed the forensic auditing of the oil giant’s accounts. The auditing of the Corporation’s accounts was necessitated by a statement credited to Sanusi Lamido Sanusi, then governor of Central Bank of Nigeria, CBN, to the effect that a whopping 20 Billion Dollars was not remitted to the NNPC’s account in CBN. The allegation was taken by the general public to mean that the said amount must have been stolen by some individuals in government in collusion with officials of the NNPC and the Ministry of Petroleum Resources.

The PwC’s report was generally expected to give further credence to that report by not only confirming the said theft but providing specific details and names of those involved in the theft. The report which was released to the public by the Federal Government on April 27, 2015, did not only fail to confirm that such huge amount was missing from oil sales proceeds but also provided no list of those behind the so called theft because it saw no such details in the course of its assignment. Rather, the accounting firm confirmed that only $1.48 billion was not remitted into the NNPC’s accounts.

These findings, apparently, a contradiction of the fixation on a position that had become popular, have fuelled the disappointment that has coloured reactions to the report. The reactions mostly miss the essence of the report which is the identification of systemic anomalies that have been the tradition in NNPC’s mode of operation.One of the basic facts thrown up by the audit is the absence of data which is a product of poor record keeping that had been the bane of the NNPC activities. This problem is as old as the Corporation itself. Where the audit firm discovered that it lacked data in the course of its assignment, it turned to reports of earlier investigations carried out by the Senate which cleared the NNPC and the Ministry of Petroleum Resources of any wrong doing. Pricewaterhouse- Coopers also said it relied heavily on legal opinions provided by the Attorney General of the Federation in arriving at some of the conclusions it made including the transfers of various NNPC portion of the Oil leases and which it said were within the authority of the minister to make.

The firm acknowledged in the report that there were many infractions in the conduct of business at the NNPC. This, too, is not strange. They have been there for a very long time and have been the subject of intense criticisms that have trailed the way things are done at the Corporation. But they are not issues for which individuals currently serving or served in the past either directly at NNPC or in the Ministry of Petroleum Resources recently will be held responsible for. It will amount to a wild goose chase to insist that individuals who recently became associated with the Corporation and the Ministry to be held responsible for lapses that are several decades older than them in the industry.

The import of the PwC report is its decision to draw attention to the systemic problems inherent in the company rather than embark on a witch hunt of individuals which is what those people expressing disappointment with the report would want to see as its focus. One of these basic systemic problems is the lack of data which the firm identified as a major encumbrance against the country’s desire for full benefits of its petroleum resources. For example, there has never been reliable statistics of the daily production of crude oil in this country. In the same way, the exact amount of money realised from the sale of the products is never known.

The issue of subsidy payments has remained very controversial. The correct amount to be paid and those entitled to these payments have never been successfully resolved. These remain the critical areas of deficiency in the operations in the petroleum industry. In our view, the standardisation of the mode of operations at NNPC and the entire Nigerian petroleum industry should be the critical area of focus as a way forward. This must include paying adequate attention to data and making sure that they reflect the true level of transactions by the Corporation. This effort should aim at successfully beaming light on the several dark alleys where most of the frauds that have, for decades, been part of the transactions in the nation’s petroleum industry take place.

This approach is the best way to achieve a permanent cure for these ills. It is not about individuals who have served or are still serving in the various arms of the petroleum industry. The next administration should rather not dissipate energy in chasing shadows by looking for scapegoats but rather confront the real problems that impede transparency and efficiency in the management of the petroleum sector. The administration should aim at strengthening the weak and inefficient policies that have crippled the industry and restricted the benefits of the industry to a few Nigerian and foreign business interests.

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