The expense associated with managing the board and staff of the Nigerian National Petroleum Company Limited increased significantly in 2024, as director salaries and costs reached N4.096 billion, whereas overall expenditure on worker perks jumped to N749.7 billion, based on the firm's verified yearly financial statement.
A review of the 2024 Annual Report conducted by The PUNCH on Thursday revealed that director compensation and eligible expenses rose by approximately 58 percent compared to N2.593 billion in 2023.
The number shows a rise of 214 percent compared to the N824 million given to the executives in 2022. "Directors' compensation and costs for NNPC Limited increased to N4.096 billion in 2024, rising from N2.593 billion in 2023," the report stated.
That same year, the state-owned oil corporation reported no employee departures among all age groups for the second year in a row, an outcome attributed to enhanced benefits programs and increased spending on workforce matters.
The document states that all 11 board members remained in their positions during the entire 2024 fiscal year with no replacements, leading to increased director expenses mentioned in the financial statements.
The board was led by Chief Dr Pius O. Akinyelure throughout 2024, with Mallam Mele Kolo Kyari serving as Group Chief Executive Officer. Alhaji Umar Isa Ajiya held the position of Group Chief Financial Officer up until November 2024, before Mr Adedapo Segun took over, subsequently becoming part of the board.
Additional non-executive board members were Ambassador Nicholas Agbo Ella, Mr. Okokon Ekanem Udo, Mr. Ledum Mitee, Mr. Musa Tumsah, Dr. Ibraheem Ghali-Mohammed, Professor Almustapha Aliyu, Mr. David Ogbodo, and Ms. Eunice Thomas.
Several of the directors' terms, according to the report, concluded on April 2, 2025, when President Tinubu disbanded the board and established fresh management under Engr. Ahmadu Musa Kida as chairperson and Engr. Bashir Bayo Ojulari as Group Chief Executive Officer.
Although board costs increased, overall pay given to top managers at NNPCL slightly decreased in 2024. Temporary staff perks for senior officers went up to N985m compared to N818m in 2023, whereas pensions and healthcare payments after retirement dropped to N380m from N631m.
In total, the remuneration provided to top managerial staff amounted to N1.365 billion in 2024, reflecting a decrease from N1.449 billion in the prior year. The firm clarified that these numbers indicate costs incurred throughout the reporting period and apply exclusively to senior executives, including the Group Chief Executive Officer, Chief Financial Officer, General Counsel, and Company Secretary, along with all Executive Vice Presidents.
In addition to administrative and executive expenses, the report indicates that NNPC allocated N749.7 billion for staff welfare across the group in 2024, compared to N581.8 billion in 2023. An analysis of personnel records reveals that none of the employees within the age range of 30 to 59 left the company willingly throughout the year. Any departures were solely because of compulsory retirement between the ages of 60 and 65, following the same trend observed in 2023.
Staff-related expenditures consist of N272.7 billion for pay and remuneration, N79.1 billion for employee perks, and N40.5 billion for well-being costs. Expenses related to pensions under the defined contribution scheme reached N44 billion, whereas compensation payments increased to N84.4 billion. Medical support after employment totaled N3.3 billion, and extended worker benefits were valued at N4.4 billion.
Employee benefits costs amounted to N192.3 billion in 2024 within the organization. The report further indicated that assumptions regarding staff death rates stayed consistent, with the number of fatalities per 10,000 workers matching actuarial projections for different age groups.
The absence of resignations highlights the effectiveness of NNPC's pay and benefits system, especially following its transformation into a limited liability corporation under the Petroleum Industry Act in 2021. As a business-oriented organization, NNPC has increased investment in wages, medical coverage, retirement plans, bonuses, and loyalty rewards.
Nevertheless, the significant increase in director compensation and employee expenses may heighten public attention, particularly under financial constraints, following the elimination of subsidies, and during continuous discussions about operational effectiveness and return on investment within the state-owned petroleum corporation.
The expenses related to NNPC's management have attracted increased public attention following the organization's shift from being a state-owned enterprise to a limited liability company as outlined in the Petroleum Industry Act, which mandates more rigorous financial reporting and openness.
Although advocates for the changes claim that fair compensation is essential to draw in and keep high-quality employees within a market-driven state-owned petroleum corporation, opponents continue to express worries regarding increasing management and executive expenses during periods of financial difficulty and ongoing income challenges.
In parallel, the general and administrative costs for the Nigerian National Petroleum Company Limited increased significantly in 2024, highlighting the rising expenses associated with managing Africa's biggest state-owned petroleum firm as it moves towards becoming a completely market-oriented organization.
Data from the firm's 2024 Annual Report indicates that overall general and administrative costs for the Group increased to N3.58tn in 2024, rising from N2.09tn in 2023. On a company-specific basis, expenditures went up to N1.66tn, as opposed to N994.08bn in the prior year.
One key factor behind the rise was employee benefits expenditure, rising to N749.74 billion within the group in 2024, compared to N583.8 billion in 2023. On the company level, personnel expenses amounted to N192.3 billion, marginally less than the N194.56 billion noted in 2023.
Depreciation expenses also climbed sharply. The depreciation of other property, plant, and equipment jumped to N623.41 billion in 2024 from N101.03 billion the previous year, due to asset revaluation, higher capitalization, and broader operational activities. The depreciation of right-of-use assets reached N66.5 billion, up from N13.93 billion in 2023.
One of the most significant rises was seen in professional and consulting expenses, which surged to N699.67 billion across the group in 2024, compared to N184.2 billion in the prior year. On a per-company basis, these consultation charges climbed to N544.17 billion, an increase from N81.64 billion, indicating increased dependence on outside advice and specialized services.
Software licensing and maintenance costs rose sharply to N210.06 billion at the group level, up from N66.59 billion in 2023, whereas security expenditures went up to N271.37 billion, compared to N170.7 billion in the prior year, indicating ongoing security issues within oil and gas operations.
Several other expense categories also saw an increase. Transportation and travel costs doubled to N91.55 billion, whereas training and hiring expenditures went up to N90.39 billion from N48.95 billion. Expenses related to entertainment reached N30.34 billion, rising from N7.44 billion, and funding for local community projects grew to N29.89 billion, compared to N6.87 billion in 2023.
The NNPC documented a payment of N27.76 billion through the Host Community Development Fund, indicating commitments outlined in the Petroleum Industry Act, whereas costs for fuels and lubricants reached N27.4 billion.
The firm also revealed fines and charges amounting to N118.78 billion, which was an item absent from the previous year's financial data. Although auditing costs reached N3.16 billion, this represented a slight increase compared to the N2.68 billion noted in the preceding period.
On the asset side, the firm recorded N98.07 billion in impairments related to assets available for sale, plus N16.75 billion written off as intangible assets and N633 million allocated to the amortization of intangible assets.
Although costs rose in most areas, additional expenses dropped significantly to N146.87 billion at the Group level in 2024, compared to N563.74 billion in 2023, indicating a shift or reduction in specific optional expenditures.
The significant increase in NNPCL's administrative and operational expenses is anticipated to reignite discussions among the public and policymakers regarding effectiveness, openness, and financial worth within the state-owned oil corporation, especially during an era of economic difficulty and increased examination of government expenditure after the elimination of fuel subsidies and wider financial changes.
Supplied by SyndiGate Media Inc. ( Syndigate.info ).
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