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The Restructuring in NNPC
- By Business World
- Published May 3rd, 2010
- Comment & Analysis
- Unrated
In the last two decades or so there have been regular shake-ups in the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries. This has hitherto involved the removal of the group managing directors and other executive directors in response to their shortcomings and failings. The overall aim in these exercise, according to the reasoning of the federal government, is to achieve maximum efficiency, transparency and accountability in the operations of the corporation and its subsidiaries; and also to weed out suspected corrupt elements within the various departments and units of the corporation.
However, it is very doubtful whether the federal government has ever realised the aims stated above. NNPC has remained an opaque, inefficient and lawless body ever since its establishment. None of the alleged corrupt elements and even those arrested, for instance, has ever been brought to justice to serve as deterrence to others.
This might not be unconnected with the fact that NNPC is a powerful body, lawless and reckless in its activities to say the least. Indeed, it has been correctly argued that NNPC is a “state” within a state because of the enormous financial resources under its control over time; and of course, because of the various cabals that had infiltrated it over the years.
NNPC is the sole mediator between the federal government and the Nigerian people on the one hand and the multinational oil companies and other foreign interests on the other hand in the Nigerian oil and gas industry (one of the largest in the world).
Since its establishment in 1978, NNPC and its predecessor, Nigerian National Oil Company (NNOC), have consistently short-changed Nigeria as attested to by the various scandals involving billions of naira by its officials and their outside collaborators. Also, NNPC has not improved in the performance of its duties and discharge of its responsibilities despite various clamour and mechanisms deployed to do so.
This calls to question the mandate and the actual performance record of the corporation. Granted that the federal government reserves the right to hire and fire any staff member of the corporation or its subsidiaries, but the question begging for answer is whether the federal government has or will ever achieve anything significant in the frequent restructuring of the corporation given the external and internal factors operating within the corporation and its subsidiaries.
The fact remains that these frequent changes in the top management of the body and its subsidiaries do not address the fundamental problems facing the corporation. They, in fact, contribute to inhibiting the various transformation initiatives and programmes within the corporation by its top management starting, for instance, from the period of Engineer Funso Kupolokun, the former group managing director of the corporation. Indeed, none of the transformation programmes aimed at re-positioning the corporation as a truly global going concern has ever been realised.
The above, therefore, does not bode well for the corporation and the nation at large at such a critical economic conjuncture in which the country finds herself.
To this end, there are two options to be canvassed: the first is to enact a law that will define and describe the specific term of office for the GMD of the NNPC, the management board and the executive directors of its subsidiaries. This option will enable the GMD and/or management team to complete the term of office while pursuing the execution of whatever reforms or restructuring programme it has in its agenda.
The second option is to retain the status quo. But the FG could impose and enforce an execution of reforms from outside – in other words, compell the GMD and the management team to execute such a programme on its behalf and the nation as a whole.
Inevitably, there is an urgent need to reform and re-position the NNPC and its subsidiaries to truly transform them into global going concerns and help drive the entire economy to new heights and forestall it from remaining a drainage pipe of corruption.
However, it is very doubtful whether the federal government has ever realised the aims stated above. NNPC has remained an opaque, inefficient and lawless body ever since its establishment. None of the alleged corrupt elements and even those arrested, for instance, has ever been brought to justice to serve as deterrence to others.
This might not be unconnected with the fact that NNPC is a powerful body, lawless and reckless in its activities to say the least. Indeed, it has been correctly argued that NNPC is a “state” within a state because of the enormous financial resources under its control over time; and of course, because of the various cabals that had infiltrated it over the years.
NNPC is the sole mediator between the federal government and the Nigerian people on the one hand and the multinational oil companies and other foreign interests on the other hand in the Nigerian oil and gas industry (one of the largest in the world).
Since its establishment in 1978, NNPC and its predecessor, Nigerian National Oil Company (NNOC), have consistently short-changed Nigeria as attested to by the various scandals involving billions of naira by its officials and their outside collaborators. Also, NNPC has not improved in the performance of its duties and discharge of its responsibilities despite various clamour and mechanisms deployed to do so.
This calls to question the mandate and the actual performance record of the corporation. Granted that the federal government reserves the right to hire and fire any staff member of the corporation or its subsidiaries, but the question begging for answer is whether the federal government has or will ever achieve anything significant in the frequent restructuring of the corporation given the external and internal factors operating within the corporation and its subsidiaries.
The fact remains that these frequent changes in the top management of the body and its subsidiaries do not address the fundamental problems facing the corporation. They, in fact, contribute to inhibiting the various transformation initiatives and programmes within the corporation by its top management starting, for instance, from the period of Engineer Funso Kupolokun, the former group managing director of the corporation. Indeed, none of the transformation programmes aimed at re-positioning the corporation as a truly global going concern has ever been realised.
The above, therefore, does not bode well for the corporation and the nation at large at such a critical economic conjuncture in which the country finds herself.
To this end, there are two options to be canvassed: the first is to enact a law that will define and describe the specific term of office for the GMD of the NNPC, the management board and the executive directors of its subsidiaries. This option will enable the GMD and/or management team to complete the term of office while pursuing the execution of whatever reforms or restructuring programme it has in its agenda.
The second option is to retain the status quo. But the FG could impose and enforce an execution of reforms from outside – in other words, compell the GMD and the management team to execute such a programme on its behalf and the nation as a whole.
Inevitably, there is an urgent need to reform and re-position the NNPC and its subsidiaries to truly transform them into global going concerns and help drive the entire economy to new heights and forestall it from remaining a drainage pipe of corruption.
