Nigeria has had very many dark days. A series of unfortunate events has meant that the country has never quite managed to live up to its potential. But one particularly terrible dark day – April 1, 1977 – stands out as the biggest economic disaster that has so far befallen Nigeria since independence. That day, Nigeria’s economic future was altered negatively in such a way that the four decades since then can be counted as a lost generation.
On that most unfortunate Friday, the Nigerian National Petroleum Corporation (NNPC) was born and ever since, Nigeria and its economy have not known peace. It is not that NNPC introduced new vices into Nigeria’s political economy – no, there was already corruption and bad governance in the country. But the coming of NNPC raised all these terrible things to exponential levels and made all of them infinitely worse. From day one of its unfortunate birth, NNPC has been involved in making public money disappear – $16bn went missing between 1979 and 1983, just in case you think this is something that just started recently.
Every aspect of Nigeria’s governance and politics has been infected by the virus of this organisation. Much less known is that even the origins of the explosion of 419 crime in Nigeria can be traced to senior NNPC staff who aided and abetted the fraudsters in the 1980s. That is, NNPC has exponentially corrupted the leadership as well as the citizenry of the country. Having eaten the past, it is currently destroying the present and is all set to set fire to the country’s future.
As you read this, money is going missing at NNPC. The corporation is not really in the business of finding and selling oil – it leaves all that work to others. It simply concerns itself with new and innovative ways of making the proceeds from oil vanish – recall that $40m once disappeared in NNPC due to a ‘spreadsheet formula’. This is an organisation that never suffers the consequences of its failures – it simply shrugs its shoulders and moves on to the next disaster.
For a democracy to properly function, it needs commercial energy to be allowed to flourish. What the birth of the NNPC did in effect was to curb commercial energy in the country by concentrating power in the hands of government. And of course by concentrating so much power in one place, the job of looting the economy and abusing that power was made so much easier. So what can be done about this situation? With apologies to Jonathan Swift, I have a modest proposal.
Sell it off and give a sizeable chunk to Nigerians. Yes – the first step of this plan will be to distribute 20% of NNPC, in the form shares, to every adult Nigerian who meets a minimum criteria like having a BVN or a Tax Identification Number (TIN) or both. A deadline for this can be set say 6 months in advance. Once the deadline has passed, the number of Nigerians who met the deadline to register will be counted and then 20% of the godforsaken NNPC’s value will be divided into shares and distributed to them. Another condition of the shares is that they will have a 10-year lockup period – that is, you will not be able to sell them in that period but you will receive dividends. After 10 years, you will be allowed to sell 10% of your shares every 2 years. However, you will be allowed to nominate a member of your family who will receive your shares in the event that you die before the end of the 10-year lockup period.
Once this first part of Nigeria’s emancipation from NNPC has been sorted, the next step will be to completely privatise the remaining 80% of it. This will be done by listing the shares in a foreign stock exchange like New York, London or Singapore as well as Nigeria. The shares given to Nigerians, as well as the dividends from them, can even be denominated in US dollars guaranteeing all those Nigerians some level of US dollar income for 10 years. Let ordinary Nigerians too earn some dollars for a change.
How about the government? It simply faces its work as a tax collector. It will collect taxes on NNPC’s income – NNPC will finally start making money once it’s owned by private investors and foreign ones for that matter. Just watch. Government will also collect dividend taxes on the dividends paid to Nigerians as well as capital gains tax when they start selling their shares. Once all this is done, the day when NNPC is finally removed from the government’s hands can be declared as Freedom Day and made a public holiday. And Nigeria can begin the long journey towards becoming a normal and fast growing economy. And that was when I woke up from my dream.