The Nigerian National Petroleum Company Limited (NNPCL) has disclosed a staggering N5.4 trillion profit for a single month in 2024, a financial highlight that comes alongside a sharp 58% increase in directors' fees and expenses, which rose to N4.096 billion. This revelation is contained in the company's recently released audited annual report, intensifying public scrutiny over its spending amidst Nigeria's ongoing economic pressures.
Board Stability Fuels Rising Governance Costs
The cost associated with the company's board of directors surged to N4.096 billion in 2024, a significant leap from the N2.593 billion recorded in the previous year. This figure represents a colossal 214% increase compared to the N824 million paid out in 2022.
The report attributes part of this rise to an unprecedented period of stability in the company's leadership. All eleven members of the board served throughout the entire 2024 financial year without any changes. The board was chaired by Chief Dr Pius O. Akinyelure, with Mallam Mele Kyari as the Group Chief Executive Officer. This stable tenure ended on April 2, 2025, when President Bola Tinubu dissolved the board and appointed a new leadership team.
Staff Welfare and Administrative Expenses Skyrocket
In a notable trend, the report indicated that not a single employee voluntarily resigned from NNPC in 2024, marking the second consecutive year of zero resignations across all age groups. The company links this retention success to enhanced welfare packages.
Consequently, total employee benefit expenses at the Group level climbed to N749.7 billion, up from N581.8 billion in 2023. This spending included N272.7 billion on salaries and N79.1 billion on various allowances.
However, the most dramatic rise was seen in general and administrative (G&A) expenses. At the Group level, G&A costs ballooned to N3.58 trillion in 2024, a sharp increase from N2.09 trillion the year before. A major driver was professional and consultancy fees, which exploded to N699.67 billion from N184.2 billion in 2023.
Executive Pay and the Scrutiny of Public Funds
Interestingly, while board costs soared, the total compensation for key management personnel saw a slight decrease. Executive pay for top figures like the CEO and CFO totaled N1.365 billion in 2024, compared to N1.449 billion in 2023.
The disclosure of these figures, especially the massive administrative costs juxtaposed with record profits, is set to fuel intense debate. This scrutiny comes at a sensitive time for Nigerians grappling with the removal of fuel subsidies and general economic hardship.
Proponents of NNPCL's commercial transformation argue that competitive pay is essential to attract world-class talent to a fully commercialized entity. Critics, however, contend that such steep increases in governance and administrative spending could erode public trust, questioning the value for money delivered by the national oil company even in times of impressive profitability.
As NNPCL continues its operational transition under the Petroleum Industry Act (PIA), its financial discipline, particularly regarding personnel and board remuneration, will undoubtedly remain a focal point for stakeholders and the Nigerian public.
