Sanusi Says That NNPCL, The Most Opaque Oil Company In The World, Demands An Audit [VIDEO]

Sanusi Lamido, former CBN Governor and Emir of Kano State, Nigeria 

Former CBN Governor Lamido Sanusi asks FG, why can't the NNPCL generate revenue? 

This same question cost me my job, where are the money since we are no longer providing subsidies

Sanusi has made no secret of his conviction that the state-owned oil company's operations are opaque. He also opposes the president serving as the minister of petroleum, a role that was initially taken on by former President Buhari and which, in his opinion, does not encourage accountability to the people.

The Nigerian National Petroleum Company Limited (NNPCL), according to former governor of the Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi, is the world's most opaque oil company and should be audited.

Sanusi, the 14th Emir of Kano and Khalifa of Nigeria's and its neighboring countries' Tijaniyyah Sufi order, delivered a speech at the 2023 Bank Directors Summit in Abuja, which had as its theme “Emerging Issues: Navigating the Complex Balance between Regulation and Compliance.”

Speaking at the summit, he questioned why, in light of the nation's low revenue and foreign exchange crisis, NNPCL is unable to bring in the necessary dollars.

“This is the question that cost me my job. I will continue asking this question until I die. Where are the dollars? We need to shine light on NNPCL.

“The finance minister cannot tell you that today, this is how many barrels of oil that we produce and export because he doesn't have a matrix system that reports to him, you can only rely on NNPCL. Those barrels are revenue, they belong to finance. We have been talking about this for 10 years. We need a metering system. The finance minister needs to know how much oil we are producing every day, how much oil we are selling, and where the money is going,” he noted

And he says the government has to make sure the state-owned oil company is transparent because if the massive leaks in that system are not fixed, the current shortfall in revenue will get worse, which will negatively impact the reserves and keep the naira weak.

Sanusi did, however, stress that while oil won't alone boost Nigeria's economy and make it wealthy, it will play a crucial role in increasing working capital and lubricating the import-dependent economy.

“We cannot afford to continue producing the oil and not seeing the revenue.

“We are no longer paying subsidies. So where are the dollars? Before, it was under recovery. Now we don't have any recovery. Where is the money? It's an issue that this country must address.

"NNPCL is the most opaque oil company in the world," he further lamented and recalled how the state-owned oil company had not been audited for 15 years even when he was the Central Bank governor.

In his opinion, “The Central Bank is easy to attack, but it does not manufacture dollars. It is not an exporter, you've got to go back to those issues we raised in 2014. You need to follow the money, from production to exports, to return, this is the number one priority.”

While he acknowledged that the country's Production Sharing Contract (PSC) agreement in the oil sector has improved from 20 to 40 percent in deep offshore production, he urged a review of onshore production.

“We need to review those who are producing onshore oil. These are wells that have been in production for seven decades. They are mature fields. At this time, you need international oil companies. Not Shell, not Exxon. You've got medium-sized IOCs operating in places like Gabon, Latin America, Asia. Get them to come and maximize the output from those fields because that's where the government has the highest revenue stake.

“We need to reform those things and give people who can bring in the technology and the skills because you need to have a long- term solution to this problem, including another structural change which is moving to alternative energy.”

Kicks against the president serving as the minister of petroleum

The Emir emphasized that “the idea of the president nominating himself as a petroleum minister is not a good one” when discussing how the government should manage the oil industry. According to him, “a minister has to be there who Nigerians can easily hold accountable.”

Speaking about the summit's theme, which he thought was appropriate, he said that the banking industry needs ongoing, strict regulations and that a stress test should be conducted to determine whether and where risks exist rather than to punish people. Citing the American Silicon Valley bank that failed earlier this year, he said that doing this is essential to safeguarding the sector, preventing a contagion, and preventing a sudden collapse of the sector.

He went on to say, “Excess focus on the banks is important,” and he urged the directors to make sure they were doing a good job representing the banks they worked for.

Also, he objected to the planned changes to the BOFIA and CBN Act, stating that it is critical to respect and preserve the independence of the banking regulator, which must be permitted to continue in its supervisory capacity.

He believes that the Nigeria Deposit Insurance Corporation (NDIC) and the Asset Management Corporation of Nigeria (AMCON), which he supported while serving as the head of the CBN, should be kept in place until the money that the banks owe the system is recouped.

Vice President Kashim Shettima stated during the summit that the stability of Nigerian banks is highly guaranteed and that their performance has been strong.

Citing data from the CBN, he stated that by the end of May 2023, the banks' nonperforming loan ratio had decreased to 4.4%. In contrast to the 15.01% recorded in 2017.

Furthermore, their total credit to the private sector climbed from N22.02 trillion in May 2017 to N41.54 trillion as of May 2023, an increase of 88.64% in just seven years.

In November 2023, the banks reported a capital adequacy ratio of 14.2%, which was higher than the minimum requirements of 10%. The prudential benchmark of 5.0% was slightly exceeded by the banks' slightly higher non-performing loan (NPL) percentage of 4.5%.

The industry's liquidity ratio rose to 73.8%, significantly above the 30% regulatory minimum, demonstrating the banks' strong ability to handle short-term liabilities.

He stated that the CBN's recent proposal for recapitalization is appropriate, even in light of the industry's strong position. This will fortify the sector even more and position the banks to play a more pivotal role in realizing President Tinubu's $1 trillion dollar economy in the near future.

“We believe our banks have what it takes and that these ambitions are achievable,” the Vice President, who was represented by Tope Fasua, Special Adviser to the president on Economic Affairs stated.

He added that the recent departures of a number of conglomerates, such as GSK and P&G, present chances for local bank intervention to support regional players who can occupy the voids left by these departures.

The current administration's policies are addressing the issues surrounding short-term liquidity, the foreign exchange market, and long-term structural changes, according to Wale Edun, minister of finance and coordinating minister for the economy. However, it will take time for these actions to become clear.

He asserted that the summit was taking place at a crucial moment with many inherent risks and uncertainties, which the financial industry is officially tasked with assisting the nation in navigating.

“It is imperative that we collectively address them together balancing the complexities of regulation and compliance in order to build the type of resilient system that will underpin the eventual move to rapid sustained and inclusive economic growth.

“So as we celebrate the strides we've made, we must upgrade to face the emerging challenges that threaten the stability and integrity of rapid technological changes the growing sophistication of financial crimes, increased trade, these dynamics introduce new and complex risks, which is the duty of you as bank directors to manage.”

However, the minister of finance acknowledged that excessive regulation can sometimes work against innovation and stifle it. As a result, a balance must be struck, with regulators working in tandem with business to foster the kinds of innovations that advance financial access.

“Bankers have a duty to embed integrity and transparency into our culture and technology systems. Lawmakers need to pass dynamic policies which compel accountability, while enabling sector wide agility and growth. The role of legislators is critical. As we strive towards this balance, we must also invest in developing human capital and capabilities. Building a high integrity system requires instilling values from top to bottom while also empowering people at all levels to take responsibility,” he stressed.

“All efforts are being made to bring in funds that will shore up the liquidity of the financial system, of the foreign exchange system and there's no reason at this stage to feel the indications that were made earlier have changed.”

Nevertheless, in an attempt to create a collaboration that would benefit the economy, he begged the CBN to confer with the bankers regarding regulatory concerns.

“This end, I call on the CBN, to institute twice a year meetings with the chairman of banks,” he stated.

Watch video of his speech below:

🎥Credit: ChannelsTV