Human rights activist and lawyer, Deji Adeyanju, has written a letter to President Bola Tinubu expressing concern over the Nigerian National Petroleum Corporation’s, NNPC, decision to reduce its stake in the Dangote Refinery from 20% to 7.2%.
Aliko Dangote, CEO of Dangote Refinery, announced the reduction on Sunday in Lagos, stating that NNPC failed to meet its payment obligations in June.
Adeyanju’s letter to the President highlights the potential negative impacts of this decision on the country’s economy and energy sector.
He wrote, “As a concerned citizen of Nigeria, I feel compelled to address the recent decision by the Nigerian National Petroleum Company Limited to reduce its stake in the Dangote Refinery from 20% to 7.2%. This decision has significant implications for our national economy and the welfare of Nigerian taxpayers, and it raises several concerns that warrant immediate attention and transparency.
“To provide context, in September 2021, the Nigerian National Petroleum Company Limited acquired a 20% stake in the Dangote Refinery for $2.76 billion. This investment was intended to secure a significant share in the refinery, which is expected to be a crucial asset for Nigeria’s energy sector.
“The initial financing included $1.036 billion provided by Lekki Refinery Funding Limited, with $1 billion paid directly to Dangote Refinery and $36 million allocated for transaction costs. The remaining $1.76 billion was to be paid through a discount on crude oil prices and future dividends.
“The reduction of NNPC Limited’s stake from 20% to 7.2% represents a substantial loss in potential revenue for the Nigerian Government. The Dangote Refinery is poised to be a critical asset in our nation’s energy sector, and owning a significant share would have ensured a steady stream of revenue through dividends and profit sharing.
“By reducing its stake, NNPC Limited diminishes its share of future profits, directly impacting the funds available for public services, infrastructure, and other critical needs. This decision essentially sacrifices long-term financial benefits for what appears to be short-term expediency.
“Additionally, this move reduces NNPC Limited’s strategic influence over the refinery’s operations. With a smaller stake, NNPC Limited will have less say in the management and strategic decisions of the refinery, which is a key national asset.
“This diminished influence could lead to decisions not aligning with our national energy policies or best interests. It raises questions about whether this decision was made adequately considering its broader implications for Nigeria’s energy security and economic stability.
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“Moreover, the lack of transparency surrounding this decision is deeply troubling. There has been little or no detailed explanation provided to the public regarding the reasons behind the reduction in NNPC Limited’s shares.
“Was this decision driven purely by financial constraints, or were there other factors at play? The absence of clear, comprehensive communication from NNPC Limited fuels suspicion and erodes public trust in our institutions. It is imperative that NNPC Limited and the Nigerian government provide a full and transparent account of the motivations and deliberations that led to this decision.
“Furthermore, this decision has direct implications for Nigerian taxpayers. By capping the investment, NNPC Limited avoids potential immediate financial strains, but it also forfeits future financial benefits that could have supported public services and infrastructure development.
“The reduction in potential revenue could impact the funds available for critical national development projects, thereby affecting the quality of life for Nigerian citizens.
“I urge the Nigerian government and NNPC Limited to reconsider this decision or, at the very least, provide a detailed and transparent explanation to the public. The people of Nigeria deserve to understand the rationale behind decisions that significantly impact our national assets and future prosperity.
“It is essential to restore public confidence through openness and accountability. Failing to do so will only deepen the distrust and skepticism that many Nigerians already feel towards our institutions.
“In conclusion, the reduction of NNPC Limited’s stake in the Dangote Refinery is a decision laden with negative implications for Nigerian taxpayers and raises serious concerns about transparency and potential foul play. I call upon the Nigerian government and NNPC L Limited to address these concerns promptly and ensure that all future decisions regarding our national assets are made with the utmost integrity and in the best interest of the Nigerian people.”
