NNPC, Central Bank of Nigeria Strengthen Ties; Establish Limits On Transactions

The Nigerian National Petroleum Company (NNPC Ltd.) and the Central Bank of Nigeria (CBN) are all set to strengthen their relationship to provide seamless commercial operation and establish specific limits to manage NNPC transactions.

Olufemi O. Soneye, Chief Corporate Communications Officer of NNPC, and Hakama Sidi Ali, Ag. Director, Corporate Communications Department CBN, issued a joint statement Thursday after a meeting in Abuja, revealing that NNPC's generated revenue will be transferred to the apex bank.

According to the statement, the CBN has provided enhanced digital platforms for all transactions and has established specific limits to manage NNPC transactions.

After their meeting, both entities acknowledged the positive impact of the decision on all involved parties. According to them, the decision will be beneficial for NNPC as it offers an improved platform for overseeing its cash-holding obligor limits in commercial banks, set by the board of directors.

The statement, shared on the official X (formerly Twitter) handle, mentioned that NNPC's Group Chief Executive Officer Mallam Mele Kyari and CBN's Governor Olayemi Cardoso have reviewed the decision "to domicile a significant portion of its revenues and other banking services with the CBN."

"Both parties have also committed to further strengthening the collaboration to ensure seamless operations of the commercial NNPC Limited and noted that NNPC Ltd. continues to have banking transactions with commercial banks as required," it added.

The statement came after President Bola Tinubu said last month that his administration will continue to intervene in the oil and gas industry to safeguard and enhance the value of investments in Nigeria.

However, Atiku Abubakar, former Vice President and presidential candidate of the People's Democratic Party (PDP), last week slammed Tinubu's directives of CBN's involvement with NNPC, claiming that it is an illegal directive and it can hinder the operation of the national oil company.

NNPC was created under the Petroleum Industry Act 2021 and signed into law by the President of Nigeria on Aug. 16, 2021. This makes the entity an independent limited liability company, as per Sections 53 to 65 of the Act.

Hence, Abubakar said that none of the state-owned enterprises are supposed to follow such orders and instead, the entities have complete control over their financial matter within the "confines of their respective establishment laws."