FILE - The Nigerian National Petroleum Corporation( NNPC) building in Abuja, Nigeria, Dec. 13, 2006.
FILE - The Nigerian National Petroleum Corporation( NNPC) building in Abuja, Nigeria, Dec. 13, 2006.

JOHANNESBURG - The Nigerian government has released a long-awaited audit on the behemoth state oil company NNPC.  The audit states that Nigeria, Africa’s biggest oil producer, needs to urgently overhaul the way it manages the company.  

Nigeria’s President Goodluck Jonathan commissioned PricewaterhouseCooper to audit the Nigerian National Petroleum Corporation (NNPC) last year.  He acted after firebrand Central Bank Governor Lamido Sanusi alleged that the state oil company failed to remit roughly $20 billion in oil revenues to government accounts.
A leaked letter from the bank governor to the president highlighted the missing revenues and alleged that NNPC was operating in violation of the law and its leadership could not be trusted.  The allegations sealed Sanusi’s fate -- he was suspended.

But the audit appears to support many of his allegations.   

The 200-page report from PwC, released by the Nigerian presidency on Monday, stated "The NNPC model of operation must be urgently reviewed and restructured as the current model, which has been in operation since the creation of the corporation, cannot be sustained."

The auditors said the company has a “blank check to spend money without limit or control.”   Accounting and monitoring systems for oil revenue “appear to be inaccurate and weak.”  The report said that data sets are beleaguered with “significant discrepancies."   For instance, PwC found a minimum of $1.48 billion in computation errors and “unsubstantiated costs.”

Oluseun Onigbinde is co-founder of Lagos-based BudgIT, a non-profit organization that analyzes government budget figures.  He says the NNPC is likely to owe even more to the treasury and that another audit should take place once president-elect Muhammadu Buhari assumes office.

“He has the political will to do this. He was the first chairman of NNPC," said Onigbinde. "He was a Nigerian oil minister before so he has a bit of understanding about this work. The only thing …is that certain elements in his party may not be trusted in this kind of reform.”

Allegations of malpractice have hounded the NNPC for years. In 2012, former anti-corruption czar Nuhu Ribadu claimed that some $100 billion in oil and gas revenue had been diverted from the state between 2002 and 2012.  But Nigeria’s government managed to side-step and bury the report.

The audit will give momentum to the incoming government under Buhari, who, during his campaign, said that he wanted to “lift the veil of secrecy” shrouding the NNPC.

Tolu Ogunlesi, a political commentator and journalist, says that change must be immediate and cannot be half-hearted.

“This is the biggest slush fund in Nigeria. It is not going to vanish overnight. What the incoming government might find is that the temptation to keep it and to continue to use it as previous governments have done -- that temptation is going to be immense," said Ogunlesi. "What we have seen is that the NNPC can overwhelm any attempts to reform.”

One factor that may influence the debate is that the so-called "slush fund" is not as big as it used to be.  The steep slide in oil prices over the last year has effectively emptied the government's coffers.  

Still, there is little doubt Buhari will have a tough time cleaning up a murky oil industry and the vested interests that benefit.