It is a welcome development for the Nigerian National Petroleum Corporation ( NNPC) which has not lived up to its billing in terms of its contribution to the overall development of the Nigerian economy to be taking these initial first important steps to the assumption of a private sector led entity. Nigeria by this move is a Johnny come lately to how many other crude oil exporting countries around the world have conducted their affairs in this connection.
This development automatically signals the fact that the profit motive would be the overriding bases for taking decisions going forward. Hitherto we conducted our affairs in this respect as if there was a deliberate attempt to kill the goose that lays the golden egg. The NNPC was seen, regarded and considered as a cesspit for corrupt enrichment and for the peddling of favours to family, friends and cronies of those in government.
As a matter of fact the NNPC became an albatross that was sinking the ship of State. There was so much lack of transparency, it is unbelievable! The volume of crude that was exported, even what was forcefully diverted, the volume of refined products that was consumed daily in the country galloped at such a worrisome and alarming rate that it was difficult to rationalize, the worrisome ill-advised payments of subsidies were all shrouded in secrecy. The corruption that was found in this Corporation stank to high heavens. Any steps therefore that will change this extant scenario to reinvent the narrative is solid legacy worthy of celebration.
With the registration of the company with the Corporate Affairs Commission, it means that the company now has its Memorandum and Articles of Association which as we know is a blue print that will guide the Company’s operations going forward. This is one of the sure benefits of the new status of the company as it is now feasible for any investor to take an informed decision about becoming a shareholder of the company. The rebranded Corporation has an initial shareholders Fund of 200 billion Naira which for now is evenly held by the Ministry of Finance and the NNPC. It has 11 shareholders with Mele Kyari retaining his position as the Group Managing Director with Senator Mary Okadigbo as Chairman.
The Company is expected to go to the market by the middle of the year 2023 to raise money from the public, which opportunity will of course initially be dominated by Nigerians. it will be good to court International investors to give the Organisation desired International outlook to underscore the fact that best practice would be the order of the day. But realistically International investors will per force be adopting a wait and see attitude. We must face the facts that we have not conducted ourselves in a manner that will give confidence to would be foreign investors particularly from the perspectives of macro-economic instability which has been the bane of our economy for a very long time now and made Nigeria an unattractive investment destination. Already complaints have been raised with regard to the spread seen in the Composition of existing shareholders. All that will change as soon as the Company goes to the Capital Market to raise money. For shouting out loud Investors reserve the rights to nominate those who will represent their interests.
We expect that Nigeria would reserve a sizable interest, may be the equivalent of not more than 49% adopting the LNG template. Saying the obvious, the new company must be private sector managed without Government interference in anyway. Otherwise it might be difficult to attract private funds. Once these steps are taken, we should expect to see a company that lives up to its tremendous promise of impactful contributions to the treasury.
We expect that preparatory to taking the company to the market that proper evaluation will be professionally undertaken to determine the actual net worth of the Company. But mindful of the urgency of energy transition now already upon us as fossil fuel is being downgraded for cleaner energy there is the need to act urgently as fossils fuel will continue to lose value as we move into the future.
If we have to pinpoint one aspect of our operations that has contributed more than its fair share to the continued lackluster performance of the Nigerian economy; NNPC has the cake in this respect. President Buhari to help his legacy should endeavour to conclude and take NNPC to the market before the expiration of his tenure. Nigeria can no longer afford the luxury of the inevitable delays that will be consequent upon leaving an unfinished business in this connection as it will amount to costly waste of time. We celebrate these tentative steps as a panacea with great prospects to unlock the potential of the Nigerian economy which has been bottled up for so long to the chagrin and pain of all Nigerians. Shalom
Boniface Chizea is a development economist and consultant