President Muhammadu Buhari has dissolved the board of the Nigerian National Petroleum Corporation (NNPC) with immediate effect. The dissolution of the NNPC board might signal President Buhari’s determination to clean up the oil industry in the country.
The directive for the dissolution of the board was conveyed in a letter signed today by the Head of the Civil Service of the Federation, Barrister Danladi Kifasi.
In the three paragraph statement, President Buhari was quoted as expressing appreciation to members of the dissolved board for their services to the nation.
Special adviser to President Buhari, Femi Adesina had earlier made it clear that the President was going to clean up the oil industry, adding: “there’s no way he could proceed with the same board in place.”
Buhari, who defeated Goodluck Jonathan in March elections and became head of state on May 29, pledged during his campaign to clamp down on graft, including in the oil sector, which the government depends on for about two-thirds of revenue and 90 percent of export earnings.
Buhari’s All Progressives Congress said it would probably strip the Nigerian National Petroleum Corp. of regulatory powers and would look into breaking the company into more efficient, commercially-driven units.
Chief executive officer of the Lagos-based consultancy Financial Derivatives Co. Bismarck Rewane said: “it is about time that the President take action on this (NNPC) financial cancer. He should go below the board and clean up that place.”
The NNPC had the worst disclosure record of 44 international and national energy companies analyzed in a 2011 report by Transparency International and the Revenue Watch Institute.
Last year, Jonathan suspended then central bank Governor Lamido Sanusi after he alleged the NNPC hadn’t remitted $20 billion to the government. A PricewaterhouseCoopers LLP report into the matter released in April said the company needed to refund as much as $4.29 billion.
The NNPC has a “blank check” to spend without limits or control, according to the PwC report. Accounting and monitoring systems for oil revenue appear to be weak and inaccurate, while data from different sources are plagued by “significant discrepancies,” it said.
Buhari’s move may have been more of a formality as the current board had little power without a head, according to Clement Nwankwo, the executive director of the Abuja-based Policy and Legal Advocacy Centre. [myad]
