Nigeria is a special place. The nation was celebrating a magical profitability of NNPC only for us to just notice that the profit was indeed “technical” (not driven by the usual common demand and supply equilibrium pricing movements). Yes, some movement of funds from the federal government made the Nigerian National Petroleum Corporation (NNPC) whole. It is indeed a very crazy one for the nation; many have challenged the validity of that profit!
Hoping that audited statements when released would provide clarity, the auditors ramped up the high voltage searchlight, revealing something frightening : “The group reported a net profit of N287.2 billion (Corporation: N235.3 billion) during the year ended 31 December 2020 and, as at that date, the current liabilities exceeded it current assets by N4.6 trillion (Corporation: N729.1 billion)…These events or conditions, along with other matters as set forth in Note 42, indicate that a material uncertainty exists that may cast significant on the group and corporation’s ability to continue as a going concern.” the auditors PricewaterhouseCoopers (PwC) said.
Now, are you going to buy the shares of NNPC? I have explained my experience with Transcorp Plc here.
Yes, NNPC could be teetering on the brink of bankruptcy as the liabilities outweigh its assets by as much as N4.6 trillion. Of course, Nigeria will say nothing to worry because it is Nigeria.
Please, can someone email the full audited statement to us here; I need to spend time and read the revelations well ahead of the 2024 planned IPO, since it is evident that the Corporation will need to go public to raise money, and improve its balance sheet.
Nonetheless, commendation to the current leadership of NNPC for going that close to reveal these then-“classified documents”. Now, we know where we stand in this country: the temple which feeds the nation may need more sacrifices!
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