Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 29)

In line with the provisions of the Petroleum Industry Act (PIA), the Nigerian National Petroleum Corporation (NNPC) on July 16 was transformed into a new entity and regulated under the provision of the Companies and Allied Matters Act (CAMA).2 As a result, NNPC was transited to Nigerian National Petroleum Company Limited (NNPC Limited) as a private entity without government interferences and free from regulations such as the Treasury Single Account (TSA), public procurement, and Fiscal Responsibility Act. The transition seeks to strengthen the capacity and market relevance of the country’s oil industry. Although, the transition promises to enable optimal performance of the country’s entire petroleum industry, concerns still hover as there are seemingly no defined strategies on how the new structure intends to deal with the industry’s legacy issues that include extant liability, compulsory commitment to frontier exploration, political interferences (especially as the Ministry of Finance and the Ministry of Petroleum Resources remain key shareholders), and loss-making subsidiaries. Under this new framework, there is a need for NNPC Limited to have robust funding and operating strategies necessary to compete favourably with domestic and global energy industries

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