Nigeria’s renewed plan to list the Nigerian National Petroleum Company Limited (NNPC) on the Nigerian Exchange is welcome, but it is difficult to escape the feeling that the nation is once again arriving late to an opportunity it identified over a decade ago.
The idea of transforming the national oil company into a publicly traded enterprise was first seriously advanced in 2016 and subsequently reinforced by the Petroleum Industry Act. Yet, after years of promises, Nigeria is only now talking seriously about bringing the company to the capital market.
There is a legitimate question: why did it take so long?
The delay is particularly costly because Nigeria’s oil and gas industry has changed considerably. The emergence of the Dangote Refinery, increasing participation by indigenous producers, renewed interest in gas, and the growing importance of private capital mean that NNPC is no longer operating in precisely the environment that existed when the listing proposal was first conceived. Nevertheless, the proposed listing remains potentially transformative.
With an estimated asset base of between $150 billion and $153 billion, even a relatively modest public float could fundamentally change the size and character of the Nigerian Exchange. A 10 per cent stake valued conservatively at $40 billion could create a company larger than the current market leaders and dramatically increase the energy sector’s representation on the exchange. For Nigerians, however, the significance should go beyond market capitalisation.
Listing NNPC could make Nigerians shareholders in one of the nation’s most important commercial assets. More importantly, public ownership would impose stronger disclosure requirements, independent scrutiny and greater pressure for financial discipline. An institution that has historically operated under considerable government influence would have to explain its accounts, liabilities, investments, revenues and corporate decisions to investors.
That is precisely why the government must resist the temptation to rush the exercise simply because the NGX is currently performing strongly. A booming stock market is not sufficient justification for an NNPC IPO. The company must first be genuinely investment-ready.
Its accounts must be audited and credible. Its assets and liabilities must be independently valued. Its relationship with the Federal Government must be clearly defined. Its obligations to joint-venture partners and other stakeholders must be transparent. Above all, investors must be able to understand exactly what they are buying.
Nigeria must also avoid using the listing as another opportunity to raise money to finance government expenditure. The purpose should be deeper – transforming NNPC from a politically exposed national institution into a professionally managed, commercially accountable energy company.
There is another important consideration. The world’s energy industry is changing. Oil remains indispensable, but the long-term shift towards gas, cleaner energy, electrification and new technologies means Nigeria cannot assume that today’s petroleum valuations will remain forever. The longer the nation delays reform, the greater the risk that assets currently regarded as enormously valuable could face changing market conditions.
At the same time, Nigeria now has an opportunity to create a broader energy investment ecosystem. The proposed Dangote Refinery listing, stronger indigenous oil companies, gas investments and NNPC’s potential listing could transform the NGX into a major African energy capital market.
But competition should encourage reform, not complacency.
The ideal approach is therefore a phased and transparent listing, beginning with a clearly defined minority stake while government retains strategic control where necessary. Independent valuation, internationally credible audits, strong corporate governance, professional management and protection for minority shareholders must be non-negotiable.
The government should also commit publicly to how proceeds from any sale will be used. Nigerians should not wake up to discover that proceeds from the sale of national assets have disappeared into recurrent expenditure.
The NNPC listing can become one of Nigeria’s most consequential economic reforms, but it will only succeed if it is treated as a governance transformation rather than another capital-market transaction.
Nigeria has already lost ten years and cannot afford to lose another decade preparing to prepare.