Everybody In NNPC Is A Thief (A Polemic)
Following the story about Andrew Yakubu and his dollar stash, I went on a twitter rant (deliberately trying to be provocative).
Naturally a lot of people took me to task saying I was ‘generalising’ and there is no way my claim can be true. Many even gave examples of ‘good’ people in NNPC who live on nothing but their salaries. Some NNPC staffers also protested their innocence and accused me of talking rubbish.
So I want to expand my thoughts by doubling down. Just to be clear, I’m repeating the point — every single person who works in NNPC is a thief. There is not a single good person working there. Not one single good man or woman.
There is a simple question we can ask to test this claim. To paraphrase Donald Trump, these ‘so called good people’ (SCGP) in NNPC, what is the bad thing they are preventing from happening? Or is there any other point of having ‘good’ people in a clearly bad place? We can see the output of NNPC — it is stealing upon brigandage upon larceny upon theft. That is all they do there. In other words, the effect of the SCGPs in NNPC is exactly zero. It is as if they are not there at all because NNPC continues to be what it is, regardless of their presence.
In that sense, it is absolutely correct to say that there is not one single good person in that den of iniquity.
What Is NNPC?
I consider NNPC to be the single worst policy decision ever taken by a Nigerian government in the country’s history since 1960. Perhaps the Land Use Act comes close but the establishment of NNPC stands alone as an incredibly costly mistake.
People often say that Aguiyi-Ironsi’s Decree 34 of 1966 was a terrible mistake. Indeed it was, but it was nowhere as bad as NNPC. After all, governments in Nigeria have been writing laws that Nigerians simply choose to ignore from time immemorial. What the coming of NNPC did however, was to concentrate economic power in the hands of the government. From this point, the corrossion of the Nigerian state gathered pace. One must not pretend that Nigeria was rosy before 1977 — as I recently documented in a Guardian piece, a lot of the problems we see in Nigeria today predate independence.
But for sure, NNPC did absolutely nothing to slow or reverse the decay in the Nigerian state. It rapidly accelerated it instead.
The context in which NNPC was established in 1977 is also important. Chairman Mao died in 1976 and Margaret Thatcher became British Prime Minister in 1979. Ronald Reagan became US president in 1981 and Deng Xiaoping officially became China’s leader in 1981 (even though he had effectively been leading the country immediately after Mao died.
These external events are important because, whether or not you agree with them, they shaped the world we live in today. Those 3 leaders represented a shift away from economic models where the state controlled everything. That shift did not happen in a vacuum — they emerged from bitter experience in China in particular as well as Britain. The Chinese experiment of the Great Leap Forward where everything was owned by the government had ended in complete disaster killing millions of people. Mao’s death thus allowed the country to move away from such an economic model to one that allowed private ownership and economic liberalisation — 改革开放 i.e reforms and opening up. It was to move away from the Mao model that Deng famously said — it does not matter if a cat is black or white, as long as it catches mice.
Meanwhile in Britain, the economic model that allowed the British government to own airlines, steel companies and even a car company like British Leyland (Jaguar, Range Rover, Mini) that was joined together from 100 different companies was beginning to unravel. An example of the mess that such government ownership was is the incident described below involving the British Prime Minister at the time, Jim Callaghan:
It is important to understand this global context so we can appreciate the direction Nigeria took with the creation of NNPC in 1977. Nigeria essentially moved in the opposite direction. Ignorance cannot be an excuse because anyone could have seen what was going on in the world economically and why countries were moving towards less government control of economic production and more economic liberalisation.
The NNPC was thus a bastard baby from day one of its creation. You can judge the direction China and Britain have travelled since that time. Nigerians certainly love their Range Rovers today, if nothing else.
The Results Were Immediate
The purpose of NNPC was not to achieve anything useful. No matter the arguments that were made for it at the time, there were other options available. From the point of view of the government, it was simply to allow them control the nation’s resources. And they did this purely for greed — the oil money flowing in was very attractive. Thus, NNPC of today is doing exactly what it was set up to do — steal from Nigerians.
There is no exaggeration here. When NNPC first started, the government claimed 35% ownership of all oil rents. Within a year, it had increased this ownership to 55%. The government did not invent anything used to find and extract oil, it did not fund any research into oil refining technology. All of that was done by other people. There is no history of the development of the oil industry where you will see the Nigerian government playing a role as an innovator (except in stealing). All the government did was to claim those resources just because it was the government.
It did not take long at all for NNPC to start its real work. Between 1979 and 1983, $16 billion went missing from there.
Today, if you google ‘NNPC’ and ‘$16bn’, you will get a result like the one below from last year:
Nigeria’s state-owned oil company has failed to pay the government $16bn (£11bn) in a suspected fraud, according to an official audit.
The Nigerian National Petroleum Corporation (NNPC) provided no explanation for the missing funds, the auditor general told MPs. Oil revenue accounts for two-thirds of the government’s funding. President Muhammadu Buhari has promised to crack down on corruption since coming to office last May.
You’ll be fooled into thinking the disappearance of $16bn is a new fraud. It is as if time stood still while NNPC just carried on plundering the country. Two years ago, I tried to parse the PwC report on the missing $20bn in NNPC. There were so many gems in the report it was difficult to know where to even begin. This bastard baby of an organisation made $40m disappear and claimed it added up a column in excel wrongly. It paid $6m in salaries and could not identify who it paid it to.
Mind you, before PwC, there was the KPMG report into NNPC in 2010. The story is the same. Look at the gem below on exchange rates from that report
They were converting dollars to naira for the government using their own private exchange rate. When caught, they claimed they got it from someone at CBN over the phone.
For as long as NNPC exists, money will continue to go missing there. It is guaranteed. Once you understand that the NNPC has no purpose on earth other than to be a conduit for oil payments, this expectation is a logical one. Among all the national oil companies in the world, NNPC is the only one that relies exclusively on middlemen to sell its crude. This organisation cannot even successfully do this most basic exercise of selling crude — a commodity bought and sold by the millions of barrels everyday around the world.
Corroding The Nigerian State
One clear example of how the NNPC has damaged the Nigerian state is the government’s inability to collect taxes from Nigerians. Everyone says this but it useful to understand the mechanism by which it operates. Consider the extract below from the prospectus to the government’s recent Eurobond issue:
A government that was elected by Nigerians and costs trillions to run every year can only collect 15% of the revenues it planned to collect from its own agencies. This is where NNPC plays a role and sustains itself. It always has one money somewhere. And as sure as night follows days, the government will run into money troubles. It will happen to the Buhari and APC too, guaranteed. As elections get closer and the government becomes more and more desperate for cash, NNPC will turn up with one kind of money that, in the desperation of the moment, no one will have time to ask for its provenance.
So the government and the NNPC are in one kind of weird dependent relationship where NNPC corrupts the government and the government corrupts NNPC. And on and on it goes. In a nutshell, this is why government cannot collect taxes and also why NNPC remains the destructive cancer that it is. Collecting taxes is a lot of hard work. NNPC is always at hand to make life ‘easier’ for the government.
This Is Not Normal
How can this be normal? How can an organisation continue to steal from Nigerians year in year out and still carry on like nothing happened?
Let us even assume that, by some unfortunate event thousands of years ago, Nigerians carry a genetic defect that predisposes them to corruption. That is, every Nigerian is born with a corruption gene. We can agree that this is a problem to solve. So how does one go about solving it? Can the solution ever be to have an organisation that is given latitude to make losses year in year out and make money go missing without facing any penalty? If Nigerians have a corruption problem, how exactly does an organisation like NNPC help to solve that problem in any way?
What we have instead is how NNPC has managed to normalise this incredible levels of madness to Nigerians. An organisation which should not even exist at all has managed to not only exist, but performed a mind trick on a whole country, convincing them that it is indispensable. Although the solution to NNPC is not reform, even mild reforms are resisted. It never changes.
When it is not stealing money, it is losing it by the billions. There is absolutely nothing this useless organisation is able to do well. Not a single thing. Look at their own published performance report for 2016 below.
After huffing and puffing from January to November 2016, it managed to lose N180bn. In a year that it planned to make N306bn. Is there an organisation anywhere in the world that can miss its projections like this and just continue as if nothing happened? It cannot even successfully turn oil to fuel to compensate Nigerians for its existence. This process of refining that was figured out by people decades ago is still confusing NNPC so much that it lost N70bn while trying to repeat something you can figure out from YouTube.
This is not normal.
Operation Carwash in Brazil involved a mere $9bn laundered through Petrobras and has claimed several lawmakers businessmen and even the last 2 presidents.
But in Nigeria? Life goes on.
How Can There Be Good People In NNPC?
So I remain at a loss when people tell me there are SCGPs in NNPC. What are they doing there? The stealing and the waste in that organisation is clear to see even to the blind. How can there be good people in such a place?
How can you be ‘good’ in an organisation that is actively destroying your own country? It is impossible. Whatever these SCGPs are doing there, it is utterly null and void and of no effect whatsoever. This organisation has corrupted governance in Nigeria so deeply — it has embedded itself as a virus that is now very difficult to remove. Remember when Obasanjo made himself oil minister ‘temporarily’ and ended up staying in the role for 8 years? He privatised many things in his time in office yet he could not sell the refineries. Buhari is back doing the same thing. The refineries will not be sold and we will continue the charade. Even Ibe Kachikwu, a man bold enough to wear purple suits, has given up and is now singing a new song.
There is only one option — completely destroy and shut it down. Nothing else can work. It has no business being in existence at all. It adds no value to Nigerians. It is an organisation that exists to rob the Nigerian people. No groundbreaking scientific discovery will ever come out of that place. By 2050, it will still be losing money trying to refine oil. Every GMD from now till eternity will continue to have millions of dollars in gifts somewhere. You will only think NNPC is not working if you mistake the work it was set up to do. Once you make peace with the reality that the organisation was setup to steal from Nigerians, nothing will surprise you anymore.
This is one of the thing that saddens me the most about APC. In the euphoria of the election campaign, I thought that a clear mandate to change the country meant that they would take a cold hard look at things like NNPC once in power and take hard decisions. In other words, evidence-based policy making (feel free to call me foolish and naive, I accept). Instead what we have got from them is policy-based evidence — NNPC must stay because Buhari likes it so any evidence (or person) that does not fit with this policy is not even considered. A bigger tragedy, you will not find.
So to anyone working ‘honestly’ in NNPC, I hate to break it to you — you are wasting your time. Strictly speaking, you should be stealing as much as you can. It makes no sense to be in an organisation whose sole reason for existence is stealing and then refusing to do your real work. It is pointless because whether you are there or not, stealing is going on even as you are reading this article.
So many people have told me Andrew Yakubu was a ‘good’ man. I believe them. The only issue is the definition of ‘good’. A ‘good’ man in NNPC is still a thief. That is the standard by which the organisation operates.
The paths in NNPC are only 2 — good thief or bad thief. There is no other option available.
FF
