Why we moved our revenue to CBN — NNPCL

THE Nigerian National Petroleum Company Limited (NNPCL) has explained that its decision to move a ‘significant’ portion of its revenue to the Central Bank of Nigeria (CBN) was in alignment with the directives of its board of directors to maintain ‘safe obligor limits’ with commercial banks.

Investopedia describes an “obligor” as a person or entity who is legally or contractually obliged to provide a benefit or payment to another.

The group managing director of NNPCL, Mele Kyari, stated this on Thursday, February 8, in a meeting with the senior management team of the CBN, led by Olayemi Cardoso, its governor.

Kyari explained that the NNPCL, the largest company in the country, had a high transaction liquidity level, adding that the apex bank had created a digital platform for its transactions going forward.


He said, “We understand very clearly that this review of our decision to move a significant portion of our revenues to the Central Bank of Nigeria is very timely. We made that decision to align with the directives of our board of directors to maintain safe obligor limits with commercial banks.

“We do need additional support, particularly from the Central Bank. We are a very huge company. Our transaction liquidity levels are very high. And perhaps we’re the largest business in this country. We’re also happy that this CBN has created a very robust digital platform for transactions and also created a department that will deal with NNPC issues and it will have no hindrance to our operation.

“We will continue to collaborate with the Central Bank of Nigeria to ensure that further improvements are received to ensure that this relationship serves the best interests of our company and of course, ultimately, our country,” he added.

In his remark, the CBN governor, Olayemi Cardoso, averred that the NNPC had decided to move the ‘respectable part’ of its business to the Central Bank.

    He said the CBN had restructured and strengthened its internal processes, making it capable of taking on the new responsibility of keeping the NNPCL’s funds.

    “We are looking forward to further collaboration with NNPC. And I have absolutely no doubt in my mind that this effective collaboration will work in the best interests of NNPC and Nigeria in general.”

    It would be recalled that the NNPCL has entered into several cash call obligations and swap deals. Analysts believe the NNPCL revenue management by the CBN would enable transparency and easier fulfilment of debt obligations for deals entered into by the National Oil Company.

    “This development will put the NNPC into checks and ensure proper monitoring of its transactions by the CBN. It will also give assurances to international oil firms doing business with the NNPC on assurance of debt recovery and other concerns,” a development economist, Celestine Okeke, told The ICIR.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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