Bureaucratic Politics and the Implementation of Liberalization Reforms in Nigeria: A Study of the Unbundling and Reorganization of the Nigerian National Petroleum Corporation

Abstract

This study investigates the motivations and activities of some bureaucratic agencies and their managers in the systematic derailing of the decision to unbundle the Nigerian National Petroleum Corporation (NNPC) and privatize some of its subsidiaries. The study applies the bureaucratic politics model to explain implementation politics as it relates to inter‐agency interests. I find that key officials of bureaucratic agencies in the petroleum sector have worked to enhance their various agencies' sphere of influence and maintain critical tasks, thereby derailing and delaying institutional reforms and reorganization of the petroleum sector in line with the liberalization agenda. The study expands the scope of bureaucratic politics in understanding policy outcomes, contributes to literature on inter‐agency relationships and interests in policy implementation. It suggests consideration of inter‐agency relationships in the design and implementation of policies, the need for clearer definition of agency responsibilities in the establishing law in a developing country environment. Related Articles Related Media Center for Strategic & International Studies. . “Nigeria's Oil Sector: Improving Governance and Addressing Corruption.” https://www.youtube.com/watch?v=QAu1XOaHcCM Abubakar ANuhu‐Koko. . “The Restructuring of the Nigerian National Petroleum Corporation (NNPC): Some Pertinent Observations.” http://www.gamji.com/article6000/NEWS7380.htm

Natural resource fund governance and the institutionalization of rent seeking in Nigeria's oil sector

“…The nationalization and vesting of the ownership rights on the federal government, operated and managed by its gargantuan state‐owned oil company the NNPC, further strengthened the practice of unaccountable management of natural resource revenue that has characterized the NNPC to date. The NNPC has struggled with the Ministry of Petroleum and other federal government agencies since its creation to maintain control of the omnibus role of policy, regulation, and commerce in the sector in what Ikeanyibe (2018, p. 287) has described as bureaucratic politics in the implementation of the unbundling and reorganization of the NNPC. In his study, Ikeanyibe showed that efforts by the Nigerian government to unbundle, reorganize, and commercialize the NNPC and privatize its subsidiaries (e.g., the refineries) was either derailed or unimplemented due to the desire of top bureaucratic personnel in some agencies to compete for the control of the petroleum sector and to hold onto critical tasks.…”

“…In these cases, the state‐owned oil companies were seen to be unwieldy, performed omnibus tasks, and managed and controlled revenues through political discretion rather than market rules. In the Nigerian context, particularly, Ikeanyibe (2018, p. 277) points out that there has been overconcentration of powers in the NNPC which allowed it to operate as the regulator of the oil sector, importer of petroleum products, distributor and marketer of products, producer and competitor in oil production, claimant, and payer and payee of accruable revenues. This has entrenched rent seeking, which prevented efforts to “unbundle the entity to improve efficiency, transparency, and accountability, and enhance its financial and managerial autonomy” (Ikeanyibe, 2018, p. 277).…”

“…The conferment of the ownership rights of Nigeria's mineral resources on the federal government rather than the British Crown, as in the colonial era, led to the establishment of the state‐owned oil company, the National Oil Corporation (NNOC) in 1971, later transformed to the NNPC in 1977. Ikeanyibe (2018) observes that

the creation of NNPC through Decree 33 of 1977 saw the parastatal saddled with the responsibility of all the business functions hitherto performed by the NNOC: the exploitation, production, transportation, and processing of oil; the refining and marketing of crude oil and its refined derivatives, as well as the regulatory and supervisory functions of the oil sector.

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