NNPC Reform: Commercialisation Will Immediately Reduce Corruption by 50%

Commercialising of Nigeria’s National Petroleum Corporation (NNPC) through the full implementation of the Petroleum Industry Act (PIA) is a reform that will reduce corruption within the sector by 50% immediately. 

This claim is based on the fact that reforms have been long overdue and have been met with resistance from political elites.

Henry Adigun, an expert in oil and gas, explained that “no government wants the NNPC free of corruption” on Channels TV’s “Inside Sources” programme. This is why, according to Adigun, Nigerian political elites have delayed, blocked, postponed legislative and policy reform in the oil and gas sector for more than 25 years. Reforming the NNPC would bloc opportunities for huge corruption which exist when the NNPC remains a company under government control and people in government or their representatives can run the company and award contracts.

 

The Petroleum Industry Act

The Petroleum Industry Bill (PIB), first introduced during the administration of President Olusegun Obasanjo, was aimed at rebuilding the oil and gas industry, promoting transparency, and ensuring efficient management of Nigeria’s hydrocarbon  resources. 

However, the journey to pass this critical legislation took 21 years, over two decades, with various interests in the political class delaying its progress. The bill was eventually passed under the administration of President Muhammadu Buhari in 2021, becoming the Petroleum Industry Act (PIA).

Despite its passage, the current administration has failed to fully implement it, which is seen as crucial for reforming the NNPC and making it more commercially practicable. 

Without the full implementation of the PIA, the NNPC remains exposed to corruption, inefficiency, and mismanagement. The key provisions of the PIA are created to ensure that the NNPC operates as a profit-driven entity, free from political interference.

 

The lack of implementation continues to raise concerns about the commitment of the government to these reforms. The PIA was intended to foster a transparent and accountable oil sector by separating the NNPC’s regulatory, operational, and commercial functions. This separation would minimize the opportunities for corruption by clearly delineating roles and responsibilities, reducing the concentration of power that has historically fuelled malpractice.

One of the main challenges in tackling corruption within the NNPC lies in the complex web of self-interest in attaining wealth. Adigun explained that no government wants to implement the reforms that will really change the nation’s oil and gas industry because of the  “It is our turn” mentality. Politicians ask themselves, why implement reforms and rob ourselves of the very lucrative opportunities for controlling NNPC, making appointments, awarding contracts etc when “it is our turn”?

Reforming and commercializing the corporation would reduce the control of these powerful groups over Nigeria’s oil wealth. By turning the NNPC into a commercial entity, there would be greater scrutiny over contracts, revenue, and operations. 

Despite the clear benefits, the reluctance of the government to fully implement the PIA continues to stifle progress. The current administration’s hesitation suggests that political actors still benefit from the industry.

Experts, however, argue that if the NNPC were commercialized and corruption reduced by half, the effects would be felt across the Nigerian economy, improving governance and boosting public trust in state institutions.

 

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