The anti-corruption crusade of President Muhammadu Buhari’s government has majorly been felt in the oil and gas sector. But the speed, at which the president has taken his anti-graft war to the sector, within the last 100 days of his administration, shook the sector to its roots.
Other sectors in the economy affected by the reform included the Federal Inland Revenue Service (FIRS), the Asset Management Corporation (AMCON), insurance, Budget Office, telecoms, Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), National Inland Waterways Authority (NIWA), Nigeria Customs Service (NCS) and Maritime Academy of Nigeria (MAN).
New NNPC boss
He started his oil sector reform on July 15 with the banning of 113 oil tankers from lifting crude oil from Nigeria due to sharp practices recorded in the export of Nigeria’s crude. The president later sacked Dr. Joseph Thlama Dahwa on August 3 and appointed Dr. Ibe Kachikwu immediately as the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) in a shake-up that later heralded other major decisions.
A statement by the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina said Kachikwu, who was the Executive Vice Chairman and General Counsel of Exxon-Mobil (Africa), was to take over immediately from Dawha. Kachikwu, a First Class Graduate of Law from the University of Nigeria, Nsukka and the Nigerian Law School, with Masters and Doctorate Degrees in Law from the Harvard Law School, hails from Onicha-Ugbo in Delta State.
Top management’s sack
The dust raised by this was yet to be settled when the president, within about 24 hours to Kachikwu’s appointment, approved the sacking of 39 top management staff of the corporation after reducing the number from 122 to 83. This biggest shakeup at the NNPC led to the dismissal of about 39 people at various subsidiaries of the oil corporation.
Justifying the shake-up, NNPC’s Group General Manager, Group Public Affairs division, Ohi Alegbe, said: “The task of restructuring the Nigerian National Petroleum Corporation (NNPC) into a lean, efficient, and business-focused organisation has commenced with management’s approval of the retirement of thirty-eight senior managers. “The exercise, apart from gearing the corporation in the direction of a leaner and more efficient organisation, has enormous cost-saving benefits.”
The ‘tsunami,’ which affected managing directors of the Nigerian Petroleum Development Company (NPDC), Pipelines and Products Marketing Company (PPMC) and NAPIMS, also led to the redeployment of many management staff of other companies. The NNPC disclosed that the new appointments were in line with the Federal Government’s aspiration to transform the corporation into a lean, efficient, businessfocused, transparent and accountable national oil company in keeping with international best practices.
Other appointments in the corporation, which were approved by Buhari, include those of Dr. Maikanti Baru, Group Executive Director, Exploration & Production; Mr. Isiaka Abdulrazaq, Group Executive Director, Finance & Services; Engr. Dennis Nnamdi Ajulu, Group Executive Director, Refining & Technology; and Dr. Babatunde Victor Adeniran, Group Executive Director, Commercial & Investment.
A new Company Secretary/Legal Adviser and managing directors were also been appointed for NNPC’s strategic business units. They are: Chidi Momah, Group General Manager, Company Secretary & Legal Adviser; Mrs. Esther Nnamdi Ogbue, Managing Director, Pipelines and Products Marketing Company (PPMC); Engr. Chinedu Ezeribe, Managing Director, Warri Refining & Petrochemicals Company (WRPC) and Mr. Babatunde Bakare, Managing Director, Nigerian Gas Company (NGC).
Others are Mr. Inuwa Ibrahim Waya, Managing Director, Hyson; Mr. Abubakar Mai-Bornu, Managing Director, Nigerian Petroleum Development Company (NPDC); and Mr. Ladipo Fagbola, Managing Director, NNPC Retail.
Also included are: Mr. Rowland Ewubare, Managing Director, Integrated Data Services Ltd (IDSL); Mr. Modupe Bammeke, Managing Director, NNPC Properties; Mr. Abdulkadir Saidu, Managing Director, Duke Oil; and Mr. Dafe Sejebor, Group General Manager, Nigerian Petroleum Investment Management Services (NAPIMS).
In line with the aspiration to reposition the corporation, 12 personnel were recruited from the private sector into the top management cadre to jump-start a new business outlook to enhance the operational environment as a profit-driven business as against the current civil service orientation.
The shake-up climaxed on August 12 with the approval of replacement for 15 Group General Manager (GGMs) of the corporation.These appointments of the new managers including Mele Kyari as the new head of crude oil marketing were done, according to the NNPC, “with the approval President Muhammadu Buhari.”
The previous manager of the division, Gbenga Olu Komolafe, was reassigned to cover special duties within the company. Some of the new GGMs included Mr. Mele Kyari, Crude Oil Marketing Division (COMD); Mr. Ahmadu Sambo, NNPC Oilfield Services; Dr. Surajdeen Bola Afolabi, ITD/ SAP; Mr. Zubair Aliyu, NNPC Capital; Mr. Dafe Sejebor, Nigerian Petroleum Investment Management Services (NAPIMS) and Mrs. Kemi Akitoye, Human Resources Division.
Also included are Mr. Godwin C. Okonkwo, Finance; Mr. Bello Rabiu, Corporate Planning Division; Mr. Anibo Kragha, Treasury and Mr. Dalhatu Makama, Shipping (Nidas & Nikorma). Others are Mr. Samuel Ndukwe, GGM, Power; Mr. Mike Balami, GGM, Accounts; Mr. Yusuf Matashi, GGM, LNG; Mr. Rabiu Suleiman, GGM, Engineering & Technology; and Dr. Olubunmi Oyetunde; GGM, Medical.
The corporation explained that the downsizing, which saw the exit of all senior managers who were billed to retire between then and December 2016, was also a costsaving measure. The NNPC receives about half of the country’s one million barrels per day of the country’s total crude production out of which 445,000 bpd is allocated to Nigeria’s refineries.
Oil tankers’ blacklisting
On the 113 oil tankers blacklisted from lifting crude oil from Nigeria, a document signed by Gbenga Komolafe, who was then the Group General Manager, Crude Oil Marketing Division, NNPC, revealed that they were banned from entering Nigerian oil facilities and territorial waters. The letter was dated July 15, and addressed to terminal operators in Nigeria, while the tankers were listed in an attached spreadsheet.
“The affected vessels have also been barred from movements within the Nigerian territorial waters forthwith. Finally, enforcement of the above directives takes immediate effect pending a notice to the contrary by Government, please,” the NNPC noted.
Cancelling of crude swap deals
On August 26, the president also approved the cancellation of all offshore processing and crude swap deals for refined oil products between the NNPC and oil traders. The cancellation affected contracts for more than half of the 445, 000 barrels per day of crude normally allocated for domestic refining usually used under the products swaps deals.
It was to enable government review and re-evaluate the contracts in a way that would help restructure the terms to be more favourable to Nigerians. Nigeria Extractive Industry Transparency Initiatives (NEITI) had earlier said the deals cost Nigeria $8 billion annually.
The deals, initiated in January by Buhari’s predecessor, Dr. Goodluck Jonathan, were designed to supply petrol for crude as Africa’s top oil producer relies on imports for the bulk of its domestic consumption. Nigeria is often chronically short of fuel, as its neglected refining sector operates well below capacity.
Nigeria allocated 210,000 barrels per day of crude to swap for products in 2015. “Mr. President has approved the cancellation of the oil swap contracts. Mr. President has publicly expressed his displeasure over this oil swap deal,” spokesman Femi Adesina had said.
A source at NNPC said the president cancelled contracts for roughly half of the 445,000 barrels per day of crude earmarked for Nigeria’s refineries — the amount refiners use in the products swaps deals. “The government may not have completely dumped the idea of swaps but the aim is to re-evaluate the whole contracts terminated to extract some favourable terms,” the source told Reuters.
The Ahmed Joda-led Presidential Transition Committee had recommended to the Buhari administration to carry out a comprehensive audit of all Offshore Processing Agreements, OPAs, and Crude Oil Swap deals entered by the NNPC. The committee had said the audit would help government identify and claim any reimbursements for excess crude oil lifted under the controversial OPA and Swap arrangements to establish the quantity of products delivered based on a fair and transparent audit process.
Apparently acting on the committee’s recommendations, Kachikwu recently hinted that all Production Sharing Contracts, PSCs; Joint Venture Contract Agreements, JVCAs, and all other contracts between the NNPC and its various partners would be reviewed to reflect current day realities in the global oil and gas industry.
“Mr. President has approved the cancellation of the oil swap contracts. Mr. President has publicly expressed his displeasure over this oil swap deal,” Mr. Adesina had said. The deals, initiated by the Jonathan administration, were designed to supply petroleum products for crude oil refining to cushion the negative impact of continued reliance on imports domestic consumption. Crude oil swap for refined petroleum products turned controversial after concerned Nigerians like the former Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, and some regulatory agencies like NEITI criticised the deals as lacking transparency and accountability.
The financial sector
Inheriting an economy laid prostate by falling oil prices and a high level of corruption, Buhari, was widely expected to focus quickly on the financial sector as soon as he settled down in office. Although he is yet to name a Minister of Finance, who is expected to give policy direction on how the administration will run the economy, the president has, however, in his first 100 days in office, made some key appointments in the sector, which could give an inkling of his economic policy direction.
New Commissioner for Insurance
The first significant step that the president took in the financial sector was his appointment of Mohammed Kari as the Commissioner for Insurance and Chief Executive of the National Insurance Commission. Kari succeeded Mr. Fola Daniel, and his appointment, which is for a term of four years in the first instance, took effect from July 31, 2015.
New AMCON CEO/management team
However, the dissolution of the management team of the Asset Management Corporation of Nigeria (AMCON) and the appointment of Ahmed Lawan Kuru, as managing director of the corporation, is arguably the most momentous and contentious decision so far taken by Buhari in the handling of the economy . Kuru, the former Group Managing Director of Enterprise Bank Limited succeeded Mr. Mustafa Chike-Obi. Other members of the reconstituted AMCON management team were: Kola Ayeye as Executive Director, Eberechukwu Uneze as Executive Director and Aminu Ismail -Executive Director. A statement issued by the presidency said the appointment of Kuru and the three new AMCON executive directors took effect from August 18, 2015.
New FIRS boss
Also within the 100-day period, Buhari appointed Dr. Babatunde Fowler as the Executive Chairman of the Federal Inland Revenue Service (FIRS). Fowler was the Chief Executive Officer/Executive Chairman of the Lagos State Board of Internal Revenue from 2005 to 2014. He was instrumental to the growth in Lagos State’s internally generated revenue (IGR), making it the only one of the few financially viable states in the country. He succeeded Mr. Samuel Ogungbesan, a former Coordinating Director of FIRS, who was appointed to the post, albeit in interim capacity, by former President Goodluck Jonathan in March 2015.
New DG for Budget Office
Finally, the president appointed Mr. Aliyu Yahaya Gusau as Director-General (DG), Budget Office of the Federation. Gusau succeeded Dr. Bright Okogu, who held the post until June this year when he stepped down to take up an appointment with the African Development Bank (AfDB) as an executive director. Gusau’s appointment is for a term of four years, renewable for another four years, unless he attains the retirement age of 60 years or completes 35 years of pensionable service.
Buhari’s body language indicated that he is satisfied with the economic transformation that Information and Communication Technology (ICT), and most especially, the telecoms sector, has brought into the country. Part of the recommendations by the transition committee to Buhari was to look into how to sustain the continual growth of the telecoms sector, which is today one of the fastest growing in Nigeria, contributing about 9 per cent to the nation’s Gross Domestic Product (GDP).
New Chair for NCC
The first touch of Buhari in the telecoms sector was the appointment of a new Executive Vice Chairman for the Nigerian Communications Commission (NCC). Prof. Umaru Danbatta was named as a replacement for the former boss of the Commission, Dr. Eugene Juwah, following the expiration of the latter’s five-year tenure on July 28. Though an academic, industry stakeholders have hailed the choice of Danbatta as the new NCC boss.
He is a Professor of Telecoms and Engineering and had previously served as the Vice President of Digital Bridge Institute (DBI), a professional telecoms training arm of the telecom regulator. Analysts, however, say the Minister of Communication Technology billed to be announced as soon as the president constitutes his cabinet, which he has promised to do this month, should be a professional that understands the industry well.
The minister together with the NCC chairman and other stakeholders are expected to drive the agenda to raise the bar of the telecoms sector’s contribution to the nation’s Gross Domestic Product (GDP), in a global knowledge-driven economy. Speaking at a recent visit of a delegation from the Ministry of Communication Technology led by its Permanent Secretary, Dr. Tunji Olaopa and top of officials of other agencies under the ministry, including the NCC, National Information and Technology Development Agency (NITDA), Galaxy Backbone and NigComSat Limited, Buhari assured them of his readiness to deploy ICT as a key tool for accelerating his economic agenda.
In the maritime sector, five key appointments were made – the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), National Inland Waterways Authority (NIWA), Nigeria Customs Service (NCS) and Maritime Academy of Nigeria (MAN).
On, July, 27, 2015, Mr. Haruna Baba Jauro, was asked to take over from Mr. Calistus Nwabueze Obi, as the acting Director General of NIMASA. Obi, who took over from Mr. Patrick Akpobolokemi, the former director general of the agency, occupied the office for a week in acting capacity.
However, his interim appointment was reversed following the discovery that he was not the most senior executive director in the organisation. The president also renewed the appointment of Mr. Joshua Okpo, on July 31, 2015 as the Rector of the Maritime Academy of Nigeria (MAN) for a second and final term of four years.
Also, in August 14, 2015, Buhari terminated the appointment of Alhaji Sanusi Ado Bayero, as managing director of the NPA and reversed the sacking of his predecessor, Alhaji Habib Abdullahi, who was returned to office. Similarly, the president, on August 27 approved the appointment of Colonel Hameed Ibrahim Ali (rtd), as the new Comptroller-General of the Nigeria Customs Service (NCS) to replace Alhaji Dikko Inde Abdullahi, who voluntarily retired from the NCS on August 18, 2015.