It is no news that the Nigerian government has successfully sold over the Nigerian National Petroleum Commission (NNPC), which is a collective heritage of hundreds of millions of Nigerians, to the hands of greedy private individuals. What is news, however, is the tendency for destructive penury that this ill-timed move portends.
Here are eight (8) reasons why the privatisation of NNPC is a terrible mistake all Nigerians must kick against.
It is on record that over 65% of Nigeria’s oil blocs located in the south-south are in the possession of a wealthy <1% of pseudo-capitalists from the North and South-West. Crude oil is cruelly drained on a daily basis with a less than satisfactory recourse to the plight of these oil-producing communities. Within this circle of cruel rulers who have mastered the art of weaponizing poverty for lavish gains, there are those who have laboriously lobbied for the privatisation of NNPC to further rob already impoverished Nigerian citizens to the grave.
Energy as a driver of the economy
Nigeria has over 40 million small businesses, excluding big manufacturing industries, heavily dependent on fossil and hydroelectric power. Since the Power Holding Company of Nigeria (PHCN) was privatized in 2013, Nigeria has struggled to add only a paltry 3,000 Megawatts to cater for an additional population of close to 40 million. This induced scarcity – a result of the government’s stifling regulations and a level of disastrous greed and incompetence shown by the private firms in control – has spiked the cost of power almost five times. Privatizing the NNPC only means one thing – more of such hardship for the masses.
Lack of competition
With the fractionalization of the NNPC into the upstream and downstream segments run by private oil and gas companies, it is expected that healthy competition will spur innovation, drive efficiency and reduce prices. In reality, this is far from the truth. The Buhari-led government has only succeeded in creating another cruel cabal of apathetic capitalists like the oil subsidy group. Barely months into this arrangement and nationwide gas prices have become 0ver 350% higher.
Incompetent religio-centric cronyism
One of the hallmarks of the Buhari-led administration is his unquestionable penchant for incompetence. From energy to transport, finance to lawmaking and election management, all key sectors for quality governance and economic wellbeing have been stripped off the reach of competent hands and handed over to relatives, friends and allies of the president. No other presidential administration has populated Aso Rock with over 85% of politicians who either relate to Buhari, share in his kinsfolk or hold his radical Salafism ideology. The problem with these new entrants is their proven incapability to push the frontiers of development for the nation. This is the fate likely to befall NNPC once the crop of rulers begins to bid for a portion of Nigeria’s biggest energy provider.
A North- South Debacle
Thanks to a retinue of power mongers affiliated with the president, the unspoken North-South debacle continues to intensify. Following the latest word play, all crude oil and natural resources in the South are referred to as national property to be richly exploited for the benefit of all regions of the country. In contrast, the gold and diamond mines located in the northern areas of Zamfara and Katsina appear to be strictly for the development of the north. While three standard refiners lay moribund in the south, the federal government has spent millions of dollars building a modular refinery in Niger – Buhari’s ancestral home country.
The protracted neglect and now hurried hurl of a so-called “national property” into the hands of selfish capitalists suggests all doom and little gloom for the nation’s energy future.
Reveals Buhari as a hypocrite
In 2017 Buhari openly criticized the privatization of PHCN, inferring that government properties ought not to be privatised. Now in 2020, the privatisation of NNPC only means: Buhari is a hypocrite who finally got to eat his words or Buhari was only concerned about privatisation because none of the so-called benefits was accrued to him during the process in 2013. Either way, it shows how this is a bad idea and many leaders place value on cleverly stolen wealth over the life of impoverished citizens whom they daily rob.
It is estimated that this privatisation exercise will boost employment generation efforts and create tens of thousands of jobs across the energy chain. However, a rise in the cost of petrol and gas which are the cheapest source of energy for Nigerians will mean a rise in the cost of transportation and production for over 40 million SMEs and an additional 20 million employed persons who would end up with a significantly reduced purchasing power while commuting for work. The exit or downsizing of these SMEs due to high production costs will lead to massive job loss in millions.
Ultimately, this becomes the case since Nigeria has shown that it no longer has control over petrol price increases following the privatisation exercise.
The latest food price index from the Nigerian National Bureau of Statistics show a consistent six-month inflation decrease to approximately 19%. On the street, however, this is a false report. The cost of a loaf of bread has increased 40%, cooking gas 150%, fuel 23%, bag of rice 55%, bag of beans 150%, and so on. Many of these sectors attribute the increased price to the high cost of energy for production and transportation.
With an NNPC in the hands of cruel capitalists, there is all the possibility of further uptick in prices driving further inflation and pushing an extra 5.6 million people into multidimensional poverty.