Despite Nigeria’s rising fiscal deficit, the decision of the Nigerian National Petroleum Company (NNPC) Limited to include frivolous expenditure in its audited report has again cast doubts on the minds of oil and gas experts on the capacity of the state-owned company to manage its subsidiaries efficiently, Dataphyte analysis has shown.
The development makes a mockery of the government’s posture as cash-strapped. Yet, its state-owned company maintains habitual wastefulness that gulps billion naira per annum among other overly expensive ventures.
Kaduna Refinery Company
N2 billion on Loans for Employees: Despite having one of the world’s highest numbers of out-of-school children, 13.2 million, according to the U.N. Children’s Fund (UNICEF), Nigeria’s Kaduna Refinery company doled out an N2.171 billion loan to its employees between 2020 and 2021
Despite making zero-naira revenue, the sum of N1.180 billion was given out in 2020 and another N991 million was recorded in 2021.
Port-Harcourt Refinery Company
N1.547 billion Canteen, Guest House Expense: Port-Harcourt Refinery Company spent N1.547 billion on Canteen and Guest house, Staff loan, Compassionate and Car Loans.
Further breakdown showed N176.237 million was spent on Canteen and Guest House, another sum of N267.126 million was spent on Staff Expenses between 2020 and 2021.
The company also gave out Car Loans worth N1.083 billion in the two years while a sum of N20.6 million was spent on compassionate loans.
This spendthrift is coming in a period Nigeria’s resources are thinning out due to a growing population projected to hit 400 million by 2040.
Warri Refinery Company: Despite not earning any revenue, the Warri refinery Company spent N341.471 million on travelling and hotel expenses between 2020 and 2021.
NNPCL (Nigerian National Petroleum Company Headquarters)
N13 billion on Entertainment: The NNPCL spent N13.4 billion on entertainment between 2020 and 2021. In 2021, Entertainment expenses gulped N11.831 billion while N1.636 billion was spent in 2020.
N140 billion Debt Write Off: Between 2020 and 2021, the NNPC wrote off debts worth N59.395 billion. The explanation for the write-off was that there were variations between the amount recorded as owed and how much was actually owed.
Dataphyte’s findings showed the state-owned company wrote off receivables worth N34.086 billion in 2020 and another N25.309 billion in 2021.
The same development occurred in 2019 when NNPC Ltd wrote off a debt of N81.406 billion. The explanation was a post-reconciliation with customers’ accounts.
N20 billion for Phone Calls and Postages: Data showed NNPC Ltd spent N20.706 billion on Telephone and Postages.
Details of the audited financial statement for 2021, show that N15.053 billion was spent on Telephone and Postages in 2021 and another N5.653 billion in 2020.
NAPIMS
N110 Billion Public Relations Fund: The sum of N110.623 billion was spent by the National Petroleum Investment Management Services on Public Relations between 2020 and 2021.
In 2021, a sum of N89.928 billion was spent on public relations while another sum of N20.695 billion was spent in 2020.
N85 Billion Bad Debt Written Off: The NAPIMS wrote off Bad Debts to the tune of N85.569 billion in 2021. It remains unclear why the NAPIMS wrote off bad debt to over N85 billion, meaning that it was unable to collect those monies owed to it by the indebted debtors.
N14 Billion Staff Advances: NAPIMS gave staff advances to the tune of NN14.533 billion between 2020 and 2021. The advance in 2021 stood at N7.647 billion while that of 2020 stood at N6.886 billion.
N1.612 Billion Entertainment Expense: Between 2020 and 2021, the NAPIMS spent the sum of N1.612 billion on entertainment. The money is broken into, N1.149 billion in 2021 and N463 million in 2020.
Over N3 billion Staff Loans: NAPIMS gave its staff N3.105 billion Staff loans between 2020 and 2021. The staff loan in 2020 stood at N1.417 billion while that of 2021 was N1.688 billion. These loans have not been paid back, according to the financial report, as they were recorded in receivables.
In total, a sum of N393.607 billion qualifies as frivolous expenditure spent by NNPC Limited and its key subsidiaries.
Opportunity cost of NNPC’s frivolous spending
Thisreport also detailed how NNPC’s frivolous spending may be bleeding Nigeria many infrastructural projects that are shortchanging the country’s economic development.
Any of the items below could have been the benefit if the over N393 billion were not spent by the NNPC Ltd frivolously.
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