Spending on governance and personnel at the Nigerian National Petroleum Company Limited rose significantly in 2024, with payments to directors and the wider workforce recording sharp increases, according to the company’s audited annual financial statements.
The report shows that directors’ fees and reimbursable expenses climbed to N4.096bn in 2024, while total employee benefit costs surged to N749.7bn at the Group level during the same period.
A review of the 2024 Annual Report revealed that payments to directors increased by about 58 per cent from N2.593bn in 2023. The amount also represents a 214 per cent rise compared to the N824m paid in 2022. “NNPC Limited directors’ fees and expenses rose to N4.096bn in 2024, up from N2.593bn in 2023,” the report stated.
In addition to the increase in board-related expenses, the national oil company recorded zero voluntary staff resignations across all age groups for the second year running, a trend attributed to enhanced welfare packages and growing staff-related spending.
The report attributed the higher directors’ costs partly to board stability during the financial year, noting that all 11 board members served throughout 2024 without changes.
During the year under review, the board was led by Chief Dr Pius O. Akinyelure as chairman, while Mallam Mele Kolo Kyari served as Group Chief Executive Officer. Alhaji Umar Isa Ajiya held the position of Group Chief Financial Officer until November 2024, before the appointment of Mr Adedapo Segun, who subsequently joined the board.
Other non-executive directors during the period included Amb. Nicholas Agbo Ella, Mr Okokon Ekanem Udo, Mr Ledum Mitee, Mr Musa Tumsah, Dr Ibraheem Ghali-Mohammed, Prof Almustapha Aliyu, Mr David Ogbodo, and Mrs Eunice Thomas.
According to the report, many of the directors’ tenures ended on April 2, 2025, following the dissolution of the board by President Bola Tinubu and the appointment of a new leadership, with Engr. Ahmadu Musa Kida named chairman and Engr. Bashir Bayo Ojulari appointed as Group Chief Executive Officer.
Despite the surge in board expenses, total remuneration paid to key management personnel declined slightly in 2024. Short-term benefits for key executives increased to N985m from N818m in 2023, while post-employment pension and medical benefits dropped to N380m from N631m.
As a result, total compensation paid to key management personnel stood at N1.365bn in 2024, compared with N1.449bn in the previous year. The company clarified that the figures represent expenses recognised during the reporting period and apply only to key management personnel, defined as the Group CEO, CFO, General Counsel, Company Secretary, and all Executive Vice Presidents.
Beyond executive compensation, the company’s workforce-related expenditure rose sharply. Employee benefit costs at the Group level increased to N749.7bn in 2024 from N581.8bn in 2023. Workforce data in the report showed that no employee between the ages of 30 and 59 resigned voluntarily during the year, with all exits attributed to mandatory retirement between 60 and 65, consistent with the pattern recorded in 2023.
A breakdown of staff-related spending shows that N272.7bn was spent on salaries and wages, N79.1bn on staff allowances, and N40.5bn on welfare expenses. Pension contributions under the defined contribution plan amounted to N44bn, while gratuity charges rose to N84.4bn. Post-employment medical benefits stood at N3.3bn, and long-term employee benefits totalled N4.4bn.
At the company level, employee benefit expenses were put at N192.3bn in 2024. The report further noted that staff mortality assumptions remained unchanged, with deaths per 10,000 employees aligning with actuarial expectations across age groups.
The sustained absence of resignations highlights the strength of NNPC’s compensation and welfare framework, particularly following its transition into a limited liability company under the Petroleum Industry Act in 2021. Since then, the company has expanded spending on salaries, healthcare, pensions, gratuities, and long-service awards.
However, the sharp rise in directors’ fees and staff-related expenditure is expected to attract increased public attention, especially amid economic pressures, the fallout from fuel subsidy removal, and ongoing debates around cost efficiency and value for money at the national oil company.
The report also showed that general and administrative expenses rose steeply in 2024. At the Group level, these costs surged to N3.58tn from N2.09tn in 2023, while company-level expenses climbed to N1.66tn from N994.08bn.
Employee benefits were a major driver of the increase, rising to N749.74bn at the Group level from N583.8bn in 2023. Depreciation expenses also grew significantly, with depreciation of other property, plant, and equipment jumping to N623.41bn from N101.03bn, while depreciation of right-of-use assets rose to N66.5bn from N13.93bn.
Professional and consultancy fees recorded one of the steepest increases, climbing to N699.67bn at the Group level from N184.2bn in 2023. At the company level, consultancy costs rose to N544.17bn from N81.64bn.
Other cost increases were recorded across software licences and maintenance, security, transport and travelling, training and recruitment, entertainment, and local community development. The company also disclosed N27.76bn disbursed under the Host Community Development Fund and N118.78bn in fines and penalties, an expense line absent in the previous year.
On the asset side, NNPC reported impairments and write-offs, including N98.07bn on assets held for sale and N16.75bn in intangible assets.
Although some expenses declined, including other expenses which fell to N146.87bn from N563.74bn, the overall rise in administrative and operating costs is expected to intensify policy and public debate around transparency, efficiency, and spending priorities at the national oil company during a period of economic strain.
(PUNCH)
Post A Comment: