The Lagos Chamber of Commerce and Industry (LCCI) has commended the commercialization of the Nigerian National Petroleum Company Limited (NNPCL) but cautioned that the timing of the Initial Public Offer (IPO) in June 2023 may suffer an interruption as the expected new government would be only weeks old then.
Director-General of the Chamber, Dr. Chinyere Almona noted that the commercialization of the NNPCL gives a ray of hope that the implementation of the Petroleum Industry Act (PIA) 2021 is still on course. “With the provisions of PIA 2021, NNPCL, Africa’s largest National Oil company, is now independent and expected to operate under the best international business practice in transparency, governance, and commercial viability. The NNPC Limited should operate in compliance with the provisions of the Companies and Allied Matters Act (CAMA) and the Code of Corporate Governance,” she said.
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While she noted that the Company will offer its shares to the public by June 2023 which will see it transform into a Public Liability Company (PLC), she cautioned that the timing of the IPO in June 2023 may suffer an interruption.
She, therefore, advised the present administration to provide all the necessary support toward its final transition to a PLC before handing it over on May 29, 2023. “We look forward to Africa’s largest oil company getting listed on global stock exchanges like the New York, Johannesburg, London, and Japan stock exchanges with values denominated in top currencies.”
The Chamber also made a case for minimal state interference, sensitivity to all interested parties and stakeholders, and a clear focus on profitability, efficiency, and inclusive governance.
According to Almona, a level playing ground for all players in the oil and gas industry is a critical factor to consider in creating a conducive business environment. The financing model through equity, she said, has proven to be cheaper than the costly debts that Nigeria has entangled itself with for years.
She urged the government to extend the financing model to other government-owned enterprises in raising revenue for capital projects without necessarily imposing more taxes on already overburdened taxpayers.
The Chamber also said it expects to see more progress made in the implementation of all other provisions of the Petroleum Industry Act 2021 especially the removal of fuel subsidies. LCCI said it has always advocated for a fully deregulated downstream sector of the oil and gas industry and creating a level playing field where market forces are allowed to allocate resources through cost-reflective pricing.
It appealed to Government to engage with all relevant stakeholders and players in the sector to arrive at an inclusive deregulation policy that creates a competitive business environment where all investors can thrive.
