The confusion that occasionally trails governance in Nigeria again reared its ugly head recently following the altercation between the Minister of State (Finance), Mr. Remi Babalola, officials of the Nigeria National Petroleum Corporation (NNPC) and the Federal Executive Council (represented by the Minister of Information, Prof. Dora Akunyili and her counterpart in Finance, Mr. Olusegun Aganga), over the current state of financial health of the NNPC.

It all started on July 13, at the press briefing after the Federation Account Allocation Committee (FAAC) meeting, where Mr. Babalola told news hounds that the NNPC was insolvent as contained in a letter by its Group Managing Director to the FAAC, to the effect that it was unable to pay its N450 billion outstanding debt to the Federation Account. The same day, the NNPC refuted Babalola's claim, insisting that the corporation was not insolvent but only going through some difficulties owing to the inability of the government to pay its N1.156 trillion debt to the corporation. The debt has accrued from subsidies on imported petroleum products and other advances. Then the next day, the Federal Executive Council, after its weekly meeting, spoke up on the issue, reassuring the public that the NNPC, from auditors' reports, was "a going concern" and "does not have solvency problems".

This is appalling, for the government seems to be speaking from both sides of the mouth. What makes the confusion worse is the central role of the NNPC in Nigeria's oil industry. The contradictory statements from within the same government and finance ministry do not do Nigeria's credibility any good. In any case, is the NNPC really broke? If that is not the case, as the federal cabinet wants the public to believe, what was the difficulty in Mr. Babalola confirming his information with the substantive Minister before going public, especially given that the issue was very sensitive and in fact had been a recurring one at previous FAAC meetings? Or is there an attempt at a cover-up? It is jolting that an establishment like the NNPC could be described as 'insolvent', given its strategic role in the nation's oil industry and the fact that by virtue of its ownership, it automatically enjoys Federal Government guarantee. This is why there may be a basis to believe that there is still a lot more to the issue than the public has been told.

Just as surprising is the fact that no government official, to date, has denied the NNPC's claim that its is being owed N1.156 trillion by the government. Besides, the NNPC also claims that its current liabilities have arisen from accumulated problems, including incessant demands by government for release of funds for sundry matters, which in most cases are unbudgeted: subsidies from the importation of petroleum products, which government is yet to refund; N7 billion spent on demurrage in 2008 from fuel importation; cumbersome repairs of damaged oil pipelines as a result of economic sabotage in the Niger Delta; incessant breaks in the fuel pipeline network amounting to over N175 billion between 2000 and 2009; and the frequent disruption in oil production due to militant activities in the Niger Delta, resulting in poor revenues. It is a grim humour that the same government that has evidently ensured that the NNPC is run down and cash strapped, just like several of its businesses, is now turning round to cry, 'Wolf!'

We decry the government's frequent recourse to spending unbudgeted funds, which violates the 1999 Constitution. Section 80 (3) of the Constitution, for instance, states explicitly: "No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly". Such flagrant disobedience of the nation's supreme law, as frequently witnessed in the past, must now be firmly checked, if this democratic order is to endure.

We also note, regrettably, that the NNPC has over the years become the bastion of corruption in Nigeria. Practically everything about Nigeria's oil industry is shrouded in secrecy, ranging from factual oil and gas production figures, to sales proceeds and how oil blocks are allocated. The fact that the President not too long ago mandated the Ministry of Finance to carry out a thorough audit of the NNPC's accounts indicates the perceived rot in the organization. Can anyone honestly compare NNPC with either Norway's STATOIL or even Malaysia's PETRONAS? Yet these, like the Nigeria's NNPC, are state-owned corporations regulating their countries' oil industries.

Frankly, the NNPC has failed Nigeria. Its problems require comprehensive long-term solutions, however. While acknowleging the FG's recent moves to re-structure the corporation for effectiveness, we think the systemic culture of graft, which thrives within the cult of official opacity, may be the real challenge to overcome. Ultimately, it seems obvious that a transparent Presidency also implies a more accountable and transparent NNPC. The Jonathan administration should therefore set a new tone and example by insisting on opening the NNPC's books to close and regular scrutiny.

A more scrupulous compliance with constitutional provisions in spending public funds is also vital. We do not understand, for example, why the Nigerian state persists in keeping the patently illegal Excess Crude Account. Furthermore, we also call on the National Assembly to speedily pass the Petroleum Industry Bill (PIB), given that it takes care of most of the identified problems of the country's oil industry.