News / Africa

    Questions Lie Ahead as Nigeria Reforms State Oil Company

    FILE- A man fills containers with diesel at a Nigeria National Petroleum Corporation petrol station in Abuja, Nigeria, May. 26, 2015.
    FILE- A man fills containers with diesel at a Nigeria National Petroleum Corporation petrol station in Abuja, Nigeria, May. 26, 2015.

    The state-owned Nigerian National Petroleum Corporation is in for a massive overhaul, its director announced this month, but analysts are divided over whether that will be enough to bring meaningful reform to Nigeria’s chaotic petroleum sector.

    The restructuring of the NNPC into five businesses and two service companies has been widely anticipated since President Muhammadu Buhari took office last year. He courted voters with promises to crack down on corruption, and there are few targets more prominent than the NNPC.

    The corporation represents the government’s stake in the country’s oil industry, which produces about 2 million barrels per day and is Africa’s largest.

    But few Nigerians reap the rewards of the oil wealth; about two-thirds of the population lives below the poverty line, a fact many blame on inefficiencies and dirty dealings at the state oil company.

    The NNPC is notoriously secretive, allegedly corrupt and recently unprofitable. In 2011, a joint report by the Transparency International and Revenue Watch Institute said the corporation keeps almost all its operations and files secret. Three years later, the former central bank governor accused the NNPC of not handing over $20 billion it owed the government.

    A spokesman for the corporation was not available for comment.

    Operating at a loss

    A restructured NNPC will make more money and do so with more transparency, said Dauda Garuba, the Nigeria officer at the Natural Resource Governance Institute. The company showed a loss last year, in part because of the crash in the global price of oil.

    “If you break up the NNPC, the independence of the various units will not be so guaranteed and issues will not be so straightforward and not too technical for people to follow up on and investigate,” Garuba said.

    But Matthew Page, a fellow at the New York-based Council on Foreign Affairs, said breaking up the company might not be enough to get it in the black.

    The corporation operates a number of losing subsidiaries, most prominent of which are Nigeria’s four refineries. They barely function, in part because the oil pipelines that supply them with crude keep getting attacked by criminals. As a result, Nigeria imports most of its gasoline and diesel.

    FILE- Cars queue in front of the Nigerian National Petroleum Corporation headquarters to buy fuel in Abuja, Nigeria, May 26, 2015.
    FILE- Cars queue in front of the Nigerian National Petroleum Corporation headquarters to buy fuel in Abuja, Nigeria, May 26, 2015.

    Despite calls from investors and analysts, Buhari has ruled out privatizing the refineries.

    “The refineries are, obviously, a major millstone hanging around the neck of the company,” Page said. “It’s really weighing it down. It’s the source of a lot of its financial losses.”

    No oversight

    The NNPC both buys and sells petroleum products and regulates the industry, Page said, making it “designed to evade outside scrutiny and effective oversight.”

    There’s even less oversight on it now since Buhari fired the company’s board shortly after taking office and has yet to reappoint new members, Page said.

    “All these things are clear conflicts of interest and practices that really are unheard of elsewhere in the world,” Page said.

    Buhari made the unprecedented move to personally act as petroleum minister, while leaving the day-to-day operations of the NNPC to his junior minister, Emmanuel Ibe Kachikwu.

    The president is busy guiding a military campaign against the Boko Haram insurgency in the northeast and putting together a budget for this year.

    But Page said that if Buhari wants to make these reforms really work, he’ll need to spend time overseeing the decisions at the NNPC personally.

    You May Like

    Vietnam Mulls Tough Measures for ‘Misbehaving’ Chinese Tourists

    Move comes after footage surfaced online of Chinese travelers harassing a banana hawker in Da Nang

    Pakistan Social Media Star's Honor Killing Fuels Debate

    Qandeel Baloch's murder puts spotlight on deadly tradition and other mistreatment of women

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Wall Already Runs Along Parts of US-Mexico Borderi
    X
    July 22, 2016 12:30 AM
    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.
    Video

    Video Number of Syrian Refugees Arriving in US Jumps

    The United States is committed to resettling 85,000 refugees from around the world by October. Of that number, 10,000 will come from Syria and already some 4,000 Syrian refugees have arrived in the United States, many of them settling in the state of Illinois. As VOA’s Kane Farabaugh reports from Chicago, their arrival is not the end of a difficult journey to find peace and stability.
    Video

    Video Rio’s Trams Await Olympic Tourists

    Over the past century, many cities around the world replaced electric trams, prone to breakdowns and backups, with faster and more spacious buses. But for some reason restored antique trams are a huge tourist attraction. So it’s no wonder the authorities in Rio de Janeiro are busy restoring their city’s old tram line ahead of the Summer Olympic Games. VOA’ George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora