The Nigerian National Petroleum Company Limited (NNPCL) has come under fire for alleged financial mismanagement, with the Auditor-General of the Federation accusing it of diverting ₦2.68 trillion and $19.77 million over the last four years.
These allegations, detailed in the Auditor-General’s reports from 2017 to 2021, highlight significant violations of financial regulations and constitutional provisions.
Findings by Sunday PUNCH, based on the Auditor-General’s annual reports from 2017 to 2021, revealed the following diversions: ₦1.33 trillion in 2017, ₦681.02 billion in 2019, ₦151.12 billion ($19.77 million) in 2020, and ₦514 billion in 2021, totaling ₦2.68 trillion and $19.77 million.
The reports, submitted to the National Assembly, highlighted violations of the Constitution of the Federal Republic of Nigeria and the 2009 Financial Regulations Act. The national oil company, criticized for disregarding corporate governance practices, failed to respond to or justify the infractions raised by the Auditor-General during the review period.
Lack of Transparency
The NNPCL has been labeled an opaque entity by the World Bank and other international organizations. In its Nigeria Development Update (December 2023), the World Bank noted that this lack of transparency extended to the handling of subsidy arrears and their impact on federal revenues.
Former Central Bank Governor Sanusi Lamido Sanusi, who served from 2009 to 2014, described the NNPCL as the “most opaque oil company in the world,” citing its failure to remit sufficient foreign exchange to government coffers and its concealment of joint ventures, oil-backed loans, and shared production arrangements.
Financial Infractions
The Auditor-General identified 14 key financial infractions involving the NNPCL, including unauthorized deductions from the Federation Account, discrepancies in remittances, and incomplete reporting of crude oil allocations.
2017: NNPCL deducted ₦1.33 trillion without authorization from ₦2.41 trillion in revenue, violating Section 162(1) of the 1999 Constitution.
2019: ₦681.02 billion in infractions, including a ₦663.89 billion discrepancy between NNPCL-NAPIMS accounts and reported remittances.
2020: ₦151.12 billion was unjustifiably deducted by NNPCL before remitting royalties to the Department of Petroleum Resources (DPR).
2021: ₦343.64 billion was deducted as “operational costs” from crude oil sales, with no breakdown provided.
Call for Accountability
Civil society organizations, including the Centre for Anti-Corruption and Open Leadership (CACOL) and the Civil Society Legislative Advocacy Centre (CISLAC), have called for sanctions against NNPCL.
CACOL’s Executive Director, Debo Adeniran, described the NNPCL as a hub of institutional corruption shielded by powerful interests within and outside the government. Despite the enactment of the Petroleum Industry Act to decentralize and reform the corporation, its operations remain opaque and riddled with allegations of corruption.
Similarly, CISLAC Executive Director Musa Rafsanjani criticized the lack of accountability, attributing the problem to the NNPCL, the presidency, the National Assembly, and security agencies. Rafsanjani urged the government to take stronger action against corruption in the oil sector, emphasizing the need for transparency and accountability.