A Special Moment in Nigeria’s Economic History

On July 19, nearly a year after Nigeria’s long-awaited Petroleum Industry Bill became law, providing the legal framework for the selling of shares, the Nigerian National Petroleum Corporation finally became a private company – the Nigerian National Petroleum Company Ltd. The former state-owned company, known for its relatively poor leadership and lack of profits for some 45 years, will now be independent of government and operate without state funding, with the new goal of delivering value to its shareholders. NNPC’s shares and assets, including oil blocs and refineries, are now held by the ministries of petroleum and finance.

By transitioning from a corporation to a limited liability company, the NNPC becomes Africa’s largest and potentially most profitable company, according to NNPC CEO Mele Kyari. To resolve the poor performance of oil production in Nigeria, the new NNPC Ltd will “act quickly, borrow money quickly and return people’s money quickly and can also make decisions quickly,” said Kyari. The limited company is also hoping to launch an initial public offering (IPO) by the middle of next year. An IPO will enable the diversification of the shareholder base to include institutional and retail investors rather than just the federal government. NNPC Ltd arrives at a time when fuel prices in Nigeria have risen by 3.4% in six months. Recently, and although Nigeria is Africa’s biggest oil producer, the pump price of premium motor spirit was increased to $0.42 per litre, provoking widespread dismay.


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