Foot in mouth disease

By | July 16, 2010

Three days ago, Nigeria’s Junior Finance Minister, Mr Remi Babalola, said that the Nigerian National Petroleum Corporation is insolvent. The Beeb:

“NNPC is insolvent as current liabilities exceeded current assets by 754bn naira ($5bn; £3.3bn),” Mr Babalola said at a government finance meeting.

He said the NNPC owed about $3bn (£2bn) to Nigeria’s Federation Account, which distributes oil money to varying levels of the country’s government.

Now, this is a company that controls about half of the oil produced by the country.

The federal government replies two days after:

the Minister of Information and Communications, Dora Akunyili, who read out the stand of the FEC at the presidential villa, said though NNPC is a growing concern, it is not broke.

“NNPC, from the auditor’s account, is a going concern, and does not have solvency issue as a corporation. Therefore, categorically, NNPC is not insolvent,” she said.

She added that there is always an outstanding balance between the federal government and the oil giant because of the regular transactions between them.

NEXT’s Tolu Ogunlesi asks:

The billion-naira question now is this: who is to be believed? Mr. Babalola, who, six months after saying he had no doubts about the precarious financial position of the NNPC, is insisting that nothing has changed (that in fact, things have grown worse), or Mrs. Akunyili (on behalf of the Federal Government) and the NNPC, who are telling us that Mr. Babalola has no idea what he is saying.

In case you are unduly puzzled, remember, this is a country that does not know the amount of oil it produces

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