The Petroleum Industry Act (PIA) is designed to be implemented in phases, and there’s a committee tasked with overseeing the transition. The restructuring of the NNPC to function as a limited liability company may not be the vision marketed by Atiku, which is outright privatization, ahead of the 2019 elections, but Atiku’s template is a more realistic business model.
The current structure of the NNPC still retains the federal government as the “sole proprietor” of the company, with the shares held on its behalf by the Ministries of Finance and Petroleum. The difference between this and the previous versions of the oil company is the introduction of periodic dividends. The company had served as a glorified cash cow of the federal government in the past decades, and would now be forced to rely on dividends based on the company’s profit profile.
Atiku’s vision of the NNPC is one that allows private investors to acquire shares of the company. This is how NLNG, which is arguably the most successful majorly government-owned enterprise in the country, has functioned. NLNG is owned by NNPC (49%), Shell (25.6%), Total (15%), and Eni (10.4%). The federal government doesn’t even own a controlling stake in NLNG.
I welcome the commercialization of Nigeria’s old cash cow, but whether the government is going to prioritize profits in managing an enterprise in which it owns a 100% stake is an experiment for which none of us can vouch with absolute certainty. To maximize profits means, for instance, getting rid of redundant workers and liabilities, and these are some difficult decisions I don’t expect a “sole proprietor” to authorize easily, either in sensitivity to public outrage or to protect the interests of the ruling class.
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