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The Union Nigeria

How Nigerian Refineries Spent N127bn On Salaries With Zero Income

The increase in wage bills between 2021 and 2020 comes despite a decrease in the number of staff who worked in these years.

by The Union Nigeria
October 22, 2022
in Special Reports
How Nigerian Refineries Spent N127bn On Salaries With Zero Income

NNPC Towers

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The ‘Change’ mantra of seven-year-old administration of President Muhammadu Buhari is seen not to be having an impact on state-owned refineries in Nigeria’s energy sector, the economic heartbeat plagued with teething challenges.

In the face of very poor performance and large overheads, fixing Nigeria’s unprofitable refineries to functional capacity has remained the promise of every administration since 1999 as Abuja intentionally prefers to pile debt rather than embrace global examples on how to run a successful refinery or rein in its appetite for waste that has eaten the country’s national budget for decades.

A culprit of that inefficient spending is President Muhammadu Buhari. The president preaches prudence in government spending in public, but the expenses he signs off annually tell a different story.

Under the watch of President Buhari who also doubles as Nigeria’s minister of petroleum, the government maintained Nigeria’s long history of wasteful spending on turnaround maintenance as audited financial statements show that these companies’ did not make a single naira between 2020 and 2021, showing a lack of operational activities.

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Despite these developments, the Kaduna, Port-Harcourt and Warri refinery companies spent the sum of N127.326 billion on salaries, Wages and Employees benefits between 2020 and 2021, a review of the companies’ audited financial statements has shown.

In simpler terms, while operations were not ongoing at refineries (going by the details of the financial statement), the workers received monies running into billions of naira as Salaries, Wages and employees benefits.

Asides from the details of the financial reports, it is even more curious given that at various times, the Nigerian government had been reported as stating that refineries have failed to work, a development that necessitated contracts for rehabilitation, thus unclear what works were done by these workers who received over N127 billion salaries, wages, and benefits.

A study of the financial reports shows that the Port Harcourt refinery Company spent the sum of N22.547 billion in 2020 and another N32.023 billion in 2021 on Salaries, wages and employee benefits.

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This shows that between 2020 and 2021, the sum of N9.476 billion was added to the money spent on salaries, wages and employee benefits.

How Nigerian Refineries Spent N127bn On Salaries With Zero Income
NNPC Towers

In the case of the Port Harcourt refinery Company, the number of Directors whose emoluments were within 12 million and above numbered four in 2020 and another four in 2021.

Warri Refinery Company spent N12 billion in 2020 and another N14 billion in 2021, while Kaduna Refinery Company spent N26 billion in 2020 and N20 billion in 2021. The company increased its wage bill by two billion naira within a year despite no operations.

A further study shows that the highest paid director in the Kaduna Refinery Company earned N25.392 million in 2021 while the sum of N22.811 million was earned in 2020, showing that despite no activity, the Oil company increased remuneration to its highest paid director by over N2.5 million.

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The increase in wage bills between 2021 and 2020 comes despite a decrease in the number of staff who worked in these years.

For instance, at the Port-Harcourt refinery the total number of staff in 2020 stood at 487 persons but fell to 450 persons in 2021, this did not stop the wage bill from increasing by N9.476 billion within these one year.

Nigeria has continued to grapple with fiscal challenges, with concerns raised on the management of its Oil company, NNPCL.

Although the Oil corporation has been rebranded to a limited liability company, there are still concerns on its management especially financially.

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