Speaking last week at a conference in Lagos, the Group Managing Director of NNPC, Mr. Maikanti Baru, said no less than 40 per cent of the worth of Nigeria’s oil and gas behemoth would be taken public. This is, however, dependent on presidential assent to the Petroleum Industry Governance Bill (PIGB).
According to Baru: “The PIGB is focused on key governing institutions in Nigeria’s oil and gas industry and aims to separate the regulatory, policy and commercial roles of public sector agencies and allocate respective roles to each agency properly positioned to perform them.”
The Bill, upon enactment, provides for immediate incorporation of two entities carved out of the NNPC. These are the Nigerian Petroleum Assets Management Company (NPAMC) and the Nigerian Petroleum Company (NPC) as companies to be vested with some assets and liabilities of the NNPC and to be limited by shares.
The NPC, for instance, shall be a fully commercialised integrated oil and gas company operating across the entire value chain. According to report, it shall be responsible for all assets currently held by the NNPC except the production sharing contracts (PSCs). While the initial shares shall be held by the Ministry of Petroleum Incorporated; Ministry of Finance Incorporated and the Bureau for Public Enterprise, however, tranches of the shares totalling not more than 40 per cent would be floated on the NSE over a period of about 10 years.
We think this is one of the most cheery news coming out of the NNPC and therefore urge the president to give assent to the PIGB pronto. The benefits of this singular move are too numerous to be enumerated here.
But most notable is that NNPC would finally begin to lose its odious identity as Nigeria’s behemoth of corruption. In the last three decades or so, Nigeria’s oil giant has degenerated into perhaps one of the most opaque and distorted business entities in the world; not to mention being cripplingly inefficient.
In recent years, NNPC has become a sluice way for ruling party slush funds and the playground of the presidency which seems to have unfettered access to its treasury. And currently, governors of the 36 states of the federation have kicked against NNPC’s remittances into the Federation Account, insisting that the corporation finagled with its accounts thereby short-changing them. For about a month, they would not touch the declared sum in the account until NNPC has shown them record of transactions. But the record is kept secret as if it were a family business.
Such is the state of putrescence that has become pervasive and instituted in the NNPC that it matters little which government is in power. Apart from the fact that it has failed woefully to live up to its lofty mandates like its counterparts in Algeria, Brazil and Saudi Arabia, it is unable to render annual accounts of its operations and finances as required of it by law while its budget is probably the best kept secret in the land.
Though we, like many Nigerians, do not trust that anything noble could emanate from the NNPC, we encourage it to do well to redeem some image for itself this time. We do not understand why it would take an entire decade to float 40% of a commercialised public corporation on the Exchange, yet the thought of going public is most salutary.
Reasons: Nigerians would participate as shareholders and derive direct benefits from the national patrimony; the new firms would render account and operate under some modern corporate governance strictures. And lastly, Nigeria may begin to get full value for her most important asset.