Nigeria'sPresident Umaru Yar'Adua is coming under intense criticism after he reportedlyannounced the he will seek cabinet approval next week for draft legislation torestructure the state oil and gas sector. The move would break up the NigerianNational Petroleum Corporation (NNPC). Critics of President Yar'Adua sayprevious sales of the country's national assets not only failed to achievetheir intended objective, but were also bought by allies whom opponentsdescribe as friends of those in power. But President YarAdua's government saysthe reforms aim to create an independent, profit-driven state oil firm that canraise funds by investing in capital markets instead of using governmentrevenue.
If theproposal is approved, the bill will be submitted to the National Assembly fordebate. Chudi Chukwuani is a Nigerian economist. From the capital, Abuja hetells reporter Peter Clottey that privatization of Nigeria's assets has notbeen in the interest of the ordinary Nigerian.
"My reaction is we want tosee what it is that he wants to restructure. But in order to break the monopolyof the NNPC, it sounds to me that he is planning to privatize NNPC. And itseems to me that the desire for the privatization of NNPC is in line with whatwas done by President Olusegun Obasanjo on the privatization of stateenterprises, whereby the state enterprises Obasanjo sold and the whole thingwas designed for a few private individuals. Associates of the president usedthe sale to corner the state assets, which was what was done during theObasanjo regime," Chukwuani noted.
He said privatization ofNigeria's assets did not yield any positive results for the ordinary Nigerian.
"If you look at all theprivatization that was done, there has been no significant economic gain to thelarger society," he said.
Chukwuani said he is notoverly enthused about the president's proposal.
"I strongly disagree withthat line of argument because if he wants to do something positive on NNPC, hehas to go and look at the NPPC original charter. NNPC was set up at the timethat countries like Venezuela and Saudi Arabia did not have a national oil company.NNPC was principally set up in order to build up local capacity in order toachieve technological transfer. Those principal objectives of NNPC have notbeen realized to date. NNPC cannot run an oil well from top to bottom,"Chukwuani noted.
He said the country's oilcompany has so far failed to live up to its billing.
"What you have in NNPC is abunch of people who are completely unpatriotic and who are there in order toline their own pocket. You know, they have formed themselves into a cabal," hesaid.
Chukwuanisaid there are many options available to President Yar'Adua that would tacklethe problems of the country's oil company.
"The way he can go about itif he is sincere to himself is, number one, to stop completely any executiveinterference in the affairs in the NNPC. He would immediately sack everybodythere and put new people who are patriotic and who knows what theirresponsibilities are. He would give them target, goals that he needs them toachieve for the benefit of the people. He would immediately put a stop to thenepotism currently going on in the NNPC. How can a president in good consciencein a country of 140 million people appoint his cousin as the managing directorof NNPC? That is a president that does not understand conflict of interest. Sothose are the things he needs to do if he is sincere to himself," Chukwuanipointed out.
Meanwhile,both Nigeria's unions and opposition parties have reportedly criticized the NigerianNational Petroleum Corporation for what they describe as a lack of transparency inthe management of contracts for fuel imports and crude exports, estimated to beworth billions of dollars annually. NNPC controls about 60 percent of thecountry's oil production of around 2 million barrels per day, but the companystruggles to finance its share of investment because it is poorly managed andstructured.