Rising Costs and Governance Challenges at Nigerian National Petroleum Company Limited
The financial landscape of the Nigerian National Petroleum Company Limited (NNPC Limited) has seen a significant shift in 2024, with substantial increases in both board and workforce expenses. According to the company’s audited annual report, directors’ fees and expenses reached N4.096 billion, marking a 58% increase from N2.593 billion in 2023. This figure represents a dramatic rise from the N824 million paid to directors in 2022, showing a 214% surge over two years.
In addition to these board-related costs, total spending on employee benefits soared to N749.7 billion in 2024, up from N581.8 billion in the previous year. This increase highlights the company’s growing investment in its workforce, which is reflected in the absence of staff resignations across all age brackets for the second consecutive year. The report attributes this stability to improved welfare packages and rising staff-related expenditures.
Board Composition and Leadership Changes
Throughout 2024, the NNPC Limited board was chaired by Chief Dr Pius O. Akinyelure, with Mallam Mele Kolo Kyari serving as Group Chief Executive Officer. Alhaji Umar Isa Ajiya was the Group Chief Financial Officer until November 2024, when Mr Adedapo Segun took over. Other non-executive directors 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.
Many of the directors’ tenures ended on April 2, 2025, when President Tinubu dissolved the board and appointed a new leadership team led by Engr. Ahmadu Musa Kida as chairman and Engr. Bashir Bayo Ojulari as Group CEO.
Compensation and Employee Benefits
Despite the rise in board expenses, total compensation paid to key management personnel fell slightly in 2024. Short-term employee benefits for key executives increased to N985 million from N818 million in 2023, while post-employment pension and medical benefits declined to N380 million from N631 million. Overall, total compensation for key management stood at N1.365 billion in 2024, down from N1.449 billion in 2023.
At the Group level, employee benefits amounted to N749.7 billion in 2024, with breakdowns including N272.7 billion on salaries and wages, N79.1 billion on staff allowances, and N40.5 billion on welfare expenses. Pension costs under the defined contribution plan were N44 billion, while gratuity charges rose to N84.4 billion. Post-employment medical benefits totaled N3.3 billion, and long-term employee benefits stood at N4.4 billion.
General and Administrative Expenses
General and administrative expenses at the Group level surged to N3.58 trillion in 2024, up from N2.09 trillion in 2023. At the company level, expenses climbed to N1.66 trillion, compared with N994.08 billion in 2023. A major driver of this increase was employee benefit expenses, which jumped to N749.74 billion at the Group level in 2024, from N583.8 billion in 2023.
Depreciation charges also rose sharply, with depreciation of other property, plant, and equipment surging to N623.41 billion in 2024 from N101.03 billion a year earlier. Professional and consultancy fees recorded one of the sharpest increases, ballooning to N699.67 billion at the Group level in 2024, from N184.2 billion the previous year.
Rising Operational Costs
Other operational costs also saw significant increases. Software licence and maintenance expenses climbed to N210.06 billion at the Group level, from N66.59 billion in 2023, while security expenses increased to N271.37 billion, compared with N170.7 billion the previous year. Transport and travel expenses doubled to N91.55 billion, and training and recruitment costs rose to N90.39 billion from N48.95 billion.
Entertainment expenses climbed to N30.34 billion, up from N7.44 billion, and spending on local community development increased to N29.89 billion, compared with N6.87 billion in 2023. NNPC also recorded N27.76 billion disbursement under the Host Community Development Fund, reflecting obligations under the Petroleum Industry Act.
Implications and Public Scrutiny
The sharp rise in administrative and operating costs at NNPC Limited is expected to fuel renewed public and policy debate about cost efficiency, transparency, and value for money at the national oil company. These concerns come amid economic strain and heightened scrutiny of public-sector spending following fuel subsidy removal and broader fiscal reforms.
