Nigeria is literally speaking, a mono product economy, with an over reliance on commodity sales as source of revenue to the nation’s coffers.
The Nigerian National Petroleum Corporation (NNPC), is the state owned oil company responsible for supervising, regulating and in collaboration with other oil companies and subsidiaries participate in the exploration, production and sales of petroleum products to generate revenue for the government.
Due to its enormous powers and strategic mandate, the NNPC has been described as Nigeria’s cash cow.
This allusion, is however defective. The NNPC is the cash cow of Nigeria’s elite and not it’s long suffering populace. It is the “Automated Teller Machine” of the ruling class and politicians.
The practice of putting cronies and fronts as Group Managing Directors by politicians, is no brainer. Nigeria is a country where money politics triumphs. It is politically expedient to have someone who panders to the whims and caprices of politicians in power, to man the cash cow. The revelations from the infamous #DasukiGate and 2015 election funding is a testament to this fact.
When Dr. Emmanuel Ibe Kachikwu was appointed Group Managing Director, Nigerian National Petroleum Corporation (GMD, NNPC) in August 2015, it was greeted with mixed reactions and seen as a ploy to douse suspicions of previous nepotistic appointments by the new administration, worsened by the “97-5%” divisive statement of the President.
Dr. Kachikwu, hails from the “Igbo speaking” part of Delta state, which is also an oil producing state. Unlike the unwritten norm, in which the oil minister is mostly picked from the President’s region, Kachikwu’s appointment was seen by many as an affirmation of the President’s stance to restructure Nigeria’s petroleum industry which has been mired by corruption, allegations of missing and unaccounted for funds running into tens of billions of dollars from almost every successive government since its inception.
Pockets of differing opinion on its appointments, based on legal background, rather than engineering as seen with other GMDs, and his lack of experience on NNPC internal politics were also raised.
However, a man who rose to the enviable position of Executive Vice Chairman/General Counsel ExxonMobil(Africa) with 30 years cognate experience in management positions in the oil industry, cannot be said to be oblivious of the dynamics of operations of Nigeria’s oil and gas sector.
On assumption of office, Ibe Kachikwu hit the ground running, initiating bold reforms to deepen transparency and accountability in a sector that has been operated like a secret cult. To underscore the importance the new administration attached to the sector, Dr. Kachikwu was also made a Minister of state, reporting directly to the president, who also doubles as the substantive Minister of Petroleum Resources. Considerable progress was made during his time as GMD, though not without it’s challenges.
The dynamics in the sector changed when Dr. Kachikwu was unceremoniously removed as Group Managing Director, GMD, and replaced with Maikanti Baru. The board chairmanship of the Nigerian National Petroleum, NNPC was however given to Ibe Kachikwu.
The NNPC Act does not recognise the title of Minister of State. The board chairman was a consolation to a seeming demotion. There are rumours of no love lost between Baru and Kachikwu, and with the enormous powers, he now wields, Baru is keen on consolidating power without recourse to due process while humiliating the Minister in the process.
I have read arguments from proponents of both sides on the latest imbroglio. After sifting the frivolous and propaganda materials mainly driven by primordial sentiments, I still maintain that due investigations should be carried out especially with the alleged contract sums in the leaked memo.
The face saving narrative that no money is missing or crime committed, is rather simplistic. Nigerians have a right to know how Contracts worth billions of dollars were awarded without input or review by the NNPC board, considering the fact that the President was on medical vacation when most of those contracts were signed.
The present saga is already affecting Investor confidence in the sector. Dr. Kachikwu’s influence on the international front cannot be overemphasized. His relentless role in campaigning for the election of Barkindo as OPEC Secretary General, was one of his major achievements.
That strategic move coupled with his advocacy for oil cut deals, resulted in oil price rising above $50 per barrel for close to a year now.
His tenacity and peaceful disposition also helped reduce tension in the Niger delta, increasing daily crude .production to about 2million BPD (two million Barrels Per Day), after dropping to a 30 year low following the activities of the militant Niger Delta Avengers group.
With Nigeria, exempted from the oil cut deal for two consecutive periods, and oil price hovering around 50 dollars, the nation was able to generate more revenue, shore up it’s Foreign Reserves to a 30 month high, that drove other sectors of the economy after a five consecutive quarter contraction.
It resulted in the economy experiencing some minimal growth, thus ending the recession.
If Ibe Kachikwu resigns now, which may be one of his options, or is eased out due to the embarrassment the leaked memo caused, not only will it put a moral question on the government especially as anti – corruption is one of its cardinal points, it will also lead to the disruption of the ongoing process of reforms especially the numerous investment drives, as no sensible investor will be interested in a nation where uncertainty looms and the nation will bear the brunt in the long run.
My prescription remains a thorough investigation and full disclosure on issues raised in the memo and appropriate actions taken. The President should also elevate Ibe Kachikwu to the status of a substantive Minister.
Not only will this boost Investor confidence, but will equally act as a check and balance for the present arrangement where semantics has been used to undermine the Minister.
In addition, it will solve the issue of insubordination and disrespect for due process.
Finally, the way Dr. Ibe Kachikwu has been treated will further embolden the separatists narrative that those who are not from the President’s region or religion are considered inconsequential in the present government, thus further widening our fault lines, especially now that ethno religious suspicions are at octave levels.
Written by Harry Slim Omoakhia
Dr. Harry Slim Omoakhia is a pharmacist and Public Affairs commentator.