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The rebuttals have
been swift and insistent. Barely 24 hours after the Minister of State
for Finance, Remi Babalola, announced that the country’s oil behemoth,
the Nigerian National Petroleum Corporation (NNPC), is “insolvent”,
senior government officials have been falling over one another to
disown him.

Minister of
Information, Dora Akunyili, and NNPC spokesperson, Levi Ajuonuma, on
Wednesday, both rose in shrill defence of the corporation’s finances.

“We cannot be
classified as insolvent when we have a healthy cash flow and we can pay
for our crude and product importation obligations,” Ajuonuma said.

Akunyili, on her
own part, said: “NNPC, from the auditor’s account, is a growing
concern, and does not have solvency issue as a corporation. Therefore,
categorically, NNPC is not insolvent.”

It wasn’t the first
time Mr. Babalola would be expressing concerns about the solvency of
the corporation. In January, he told journalists that the NNPC was
owing the Federal Government N450 billion, which it was unable to pay
because “they do not have the cash flow to pay the debt. There is no
doubt in my mind about that.”

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.

If the NNPC’s
reputation – an undisputed status as the headquarters of Nigeria’s
‘rent-seeking’ industry – is anything to go by, whatever its officials
say must be taken with a pinch of salt. Don Etiebet, former minister of
petroleum under the late General Sani Abacha, confessed late last year
that in his position as supervising authority of the NNPC, he found it
impossible to reconcile the corporation’s accounts.

It hardly helps
that the corporation is perennially in a state of flux; a serial victim
of ruthless ‘cleansing’ sprees by successive governments, all in the
name of ‘reform’ – which tragically continues to remain elusive. In the
last year and half alone, the corporation has had three CEOs. Only a
little over a year ago, late President Yar’Adua ordered the sack of six
executive directors.

With this state of
affairs in the NNPC, it appears that Mr. Babalola’s submission would be
much closer to the truth than the strident rebuttal by the government
and the corporation. It is hard to imagine why a serving government
minister would consistently raise the alarm about a government agency’s
finances – especially one that his position compels him to have
dealings with all the time – without being deeply convinced of the
veracity of his position. Crying wolf in this case would not merely be
mischief, it would be madness.

On the other hand,
the NNPC and the Federal Government have every reason in the world to
be economical with the truth. One only need to turn to Greece to see
the severely negative implication of national insolvency on a country’s
credit rating, and its future economic prospects.

For a country like
Nigeria, which depends on oil for 80 percent of its earnings, it is
easy to see why foreign governments, financial institutions, and
potential investors would equate the national oil company’s insolvency
with national insolvency. Fear of such a scenario would be enough to
compel any government to angrily dismiss any speculation that its
cash-cow is broke.

From the foregoing,
it appears that it would be best to conclude that the NNPC remains
broke until proven otherwise. The burden of proof is solidly on the
corporation; Nigerians would need far more than an angry denial as
evidence that all is well.