Oil prices topped $100 per barrel during much of the previous government’s tenure, which made these inefficiencies and leakages more affordable. This is no longer the case. For Nigeria to benefit more fully from its oil, President Muhammadu Buhari will have to change how NNPC works. In the short term, some basic steps would stem losses. The government could rein in NNPC’s discretionary spending (which has topped $7 billion in recent years), examine the utility of NNPC’s subsidiaries which tend to operate as financial black-boxes, and stop NNPC from doing business with unqualified and often politically-connected middlemen. Steps like these could be taken in the near term, while the government figures out a plan for restructuring NNPC into a more commercial entity.
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