Claim: President Buhari claims that NNPC’s N287 billion naira 2020 profit is the first in 44 years.
The claim that NNPC’s N287 Billion naira 2020 profit is the first in 44 years is false. Financial reports released by the Corporation in 2019 reveal it has also made 111, 591 in 2017. Hence, this claim is false.
On August 26th, President Mohammadu Buhari announced on his verified Facebook page that the Nigerian National Petroleum Corporation (NNPC) has made a net profit/profit after tax of N287 Billion for the first time in 44 years.
“I am pleased to announce the declaration of Profit after Tax of Two Hundred and Eighty Seven Billion Naira (N287 Billion) in Year 2020 by the Nigerian National Petroleum Corporation NNPC. This is sequel to the completion of the statutory Annual Audit exercise for Year 2020.”
“The NNPC losses were reduced from N803 Billion in year 2018 to N1.7 Billion in year 2019 and the eventual declaration of Net Profit in Year 2020 for the first time in its 44-year history.” The president said.
Aside from the wide range of media coverage the announcement attracted, Femi Adesina, an aide to President Buhari on Media and Publicity, also also wrote a lengthy article on his Facebook page that underscored how the profit came about. A feat he attributed to the current administration’s efforts to strengthen the Nigerian economy.
“The news came like a thundering typhoon last week. For the first time in its 44-year history, the Nigerian National Petroleum Corporation (NNPC) has made a profit.”
“Net profit after tax stood at N287 billion in Year 2020, sequel to the completion of the statutory Annual Audit exercise. What year? 2020. Year of the Coronavirus pandemic, when most of the world, including Nigeria, was under lockdown! And here was NNPC, recording profit for the first time in its history. How did it happen? How can it?” The Presidential aide wrote on his Facebook page.
In the article, he went further to explain that “Well, it happened because perhaps for the first time in the history of the country, and of the NNPC, there is a President who is not using the place like a personal automated teller machine. He’s not collecting millions upon millions of dollars by fiat, nor is he giving directives for any under the table deal. And that President also happens to be the Minister for Petroleum Resources.”
Both the President’s and his Aide’s announcement attracted wide media attention and a plethora of other views. While some experts commended the achievement and gave a positive response to it, others criticized it and even challenged its legitimacy.
One Facebook user, Emmanuel Ogu who commented on Mr. Femi’s post, questioned that “What jinx did he break after 6 years of non-performance as Minister for Petroleum Resources. I beg don’t come and deceive some of us who can discern between propaganda and the reality on the ground.”
Yet it was not only him, Atebo Peterside, the founder of IBTC Stanbic Bank was reported by Punch Newspaper to have questioned the accomplishment. He was quoted to have said on his Twitter handle that “There is an allegation that NNPC dipped their fingers in the Federation Cookie Jar in order to announce bumper 2020 profits; they should come clean and publish details of all dividends received by them and tell us which ones they recently diverted from the Federation to themselves.”
Another reader, Collins who commented on Peterside’s reported views, reinforced that “It’s impossible for them to have made profit last year when oil price dropped to a near zero. These are people filled with lies, what a shame.”
Though Femi Adesina quoted the President, and the President only announced the success, there are no documents or a financial report of the NNPC’S 2020 profit yet. Perhaps it will be out eventually since it is merely a profit announcement. Nonetheless, the questions around the matter, stresses the need for a closer look. Is this the first profit NNPC has made so far in 44 years? Or are there other facts to it?
NNPC bid for financial transparency
NNPC’s financial report may perhaps have some answers. The corporation back in 2019 published a financial report detailing an audit of its economic activities.
In the report, details of NNPC’s 2018 and 2019 financial accounts were made open for public access alongside a five-year financial summary from 2015 to 2019 for the first time since its creation.
The whole crux of the initiative was to encourage transparency and translucency in the financial dealings of the corporation.
Both President Buhari and his Aide, Femi Adesina, said the NNPC made a Net profit after tax for the first time in 44 years (N287 Billion).
However, the financial audit report published by NNPC in 2019 reveals otherwise.
Though from 2015 to 2019 the corporation registered significant losses as presented in the report, in 2017, it did, in fact, made a reasonable Net profit of N111, 591 Billion.
Determining NNPC’s 2017 profit
Net profit and profit after tax means the same thing. It is the actual profit after working expenses have been paid or extracted from total income realized.
It should also be noted that digits placed in brackets signifies a loss according to the report, as also clearly identified in ‘Profit (loss) before income’ tax and ‘Profit (loss) after tax’.
According to the financial report, the corporation registered losses in 2015 and 2016 but made an exception in 2017. However, they fell back to a heightened level of loss in 2018 (₦803,144 billion) but reduced drastically in 2019 (1.762 billion).
This clearly reveals that in 2017, NNPC had registered a profit of N111, 591 billion (highlighted yellow in ‘profit after tax’ above) both under ‘Profit (loss) before income’ tax and ‘Profit (loss) after tax.
Why NNPC’s financial report is a point of evidence
In a report published by NNPC on their website that served as an access link to the detailed financial report, the corporation stated that “Barely five months after publishing its 2018 Audited Financial Statement, the Nigerian National Petroleum Corporation (NNPC) has released its 2019 Audited Financial Statement with a 99.7% reduction in its loss profile from ₦803bn in 2018 to ₦1.7bn in 2019.”
These are the same digits Buhari quoted in his announcements “The NNPC losses were reduced from N803 Billion in year 2018 to N1.7 Billion in year 2019 and the eventual declaration of Net Profit in Year 2020 for the first time in its 44-year history.” These amounts were the same presented in the 2019 and 2018 “Profit (loss) after tax” of the actual financial report (highlighted red). Apparently, the corporation’s 2017 financial turnover was left out of the President’s announcements.
A possible explanation
When NNPC released its 2018 financial report, it indicated N82 billion loss in 2017. However, months later, when the 2019 financial reports came out, the group “restated” the 2015, 2016 and 2017 figures. Just this time, the 2017 “restated” figure showed that the corporation made a profit of N111,591 billion instead of the earlier loss documented in the year.
‘Restated’ in financial statements such as in this case, is a revision of a previously issued financial statement to correct an error. Portions of a financial statement are required to be restated when it is determined that a previous statement is inaccurate.
Thus the 2015, 2016 and 2017 ‘restated’ figures in NNPC’s 2019 financial statements were corrected. Conceivably, there might have been a possible communication gap between NNPC and government officials prompting them to proclaim 2020 profit as the first in 44 years by holding on to the 2017 old figure.
A screenshot from NNPC’s 2019 financial report showing the “restated” changes on 2015, 2016, and 2017 financial summary
Nonetheless, to seek for more information and clarity over the findings, DUBAWA reached out to NNPC, but received no response from the corporation as of the time of writing this fact check.
NNPC’s Two Hundred and Eighty Seven Billion Naira (N287 Billion) 2020 profit is not the corporation’s first-ever profit in 44 years as announced by the president. A financial report published by the corporation shows it has registered a net profit of N111,591 in 2017. This claim is false.