Nigeria: Oil Firm Insolvency raises Corruption Questions
The Nigerian National Petroleum Corporation has been labelled insolvent, raising new questions over the country’s squandered resources and what role corruption played in the company’s fate, reported AFP.
The firm’s relationship with the government, who forced the company to keep petrol prices low, but simultaneously held back subsidy payments, is also under intense scrutiny.
According to finance minister Remi Babalola, the NNCP’s liabilities exceed assets by more than 754 billion naira ($5bn).
However, the NNCP have disputed the claim and said that the government owes it around $6bn in subsidies.
In a statement to the press, the firm said: ‘While it is true that the national indebtedness to the NNPC is putting pressure on our operations, nonetheless we are able to meet all our obligations. We therefore cannot be said to be insolvent.’
The controversy brings forward questions of what role corruption has played in the NNPC’s affairs.
With the firm struggling to pay its bills, there are a range of other connected issues, with the government looking for ways to reform the petroleum industry; the source of an estimated 90 percent of export earnings and 80 percent of government revenues.
Goodluck Jonathan, President of Nigeria has made it one of his key priorities to cut down on corruption and reform the oil sector to make it efficient and profitable.
In his bid to cut down on corruption, he has already sacked some officials from the NNPC and ordered an audit of the firm’s accounts
Meanwhile, Nigeria’s inability to capitalise on its oil wealth continues to cause aggravation to its150 million populous.
Source: AFP, 14 July
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