Around 20 percent of Nigerian workers were made unemployed by the implementation of a planned restructuring of eight state-owned oil companies by the management of the Consolidated Oil Companies (COVID), according to official figures obtained by Fox News.
The Nigerian government, through the federal government’s National Petroleum Corporation (NPC), had planned to sell 49 percent of NNPC’s nine subsidiary oil companies. NNPC owns 49 percent of the nine companies and has half the controlling shares.
Initially, all the companies had been slated to be sold, but the government recently tabled a proposal to sell only eight, while retaining the management of the remaining three. The remaining three are not part of the intended divestment.
Fox News also was not able to confirm the NNPC’s initial cost estimates for the projects, but Nigerian media had previously reported that the first phase of the project was expected to cost $4.1 billion.
The planned company restructuring, which is not expected to generate significant profit and has been labeled as a “one-off job creation program”, was announced in May 2018. In the months leading up to the restructuring, the government declined to provide further information about the programs.
According to the Nigeria Communications Commission (NCC), some 200,000 Nigerian workers were made unemployed between March and June 2018, by the implementation of Nigeria’s Big Data initiative, where large data sets are managed by data analytics in data analytics.
Originally, Nigerian journalists, critical of the planned oil company restructuring, had argued that a company dissolution would only further enrich just one man – Ibrahim Mahamed, the President of Transcorp.
Mahamed has a stake in some of the targeted companies.
The Transcorp portfolio, worth about $7.5 billion, is made up of interests in several companies including PowerGen Limited and Transcorp Hilton Nigeria Limited.
Over 1,000 people were affected by the planned restructuring and a vast majority were laid off, according to the Nigerian media.
The employees reportedly lost 10-30 percent of their entitlements. There are no estimates available for their total losses, but as a majority of them were in the oil production business, most of their employment was thought to be indirectly related to oil.
“[Transcorp president] Ibrahim Mahamed will certainly pocket as much as $3 billion out of this [scheduled company merger],” a Nigerian media report said.
Following the company restructuring, several media outlets reported that Transcorp’s President Mahamed escaped with more than 100 percent of his salary. According to Media Rights Agenda, one of the groups involved in the Nigerian media’s efforts to obtain comprehensive information about the planned company restructuring, the salary of Mahamed and the new managing director of the subsidiary’s upstream business, Mazi Obi Nwoko, was each reportedly around $5 million.
In June, Nigeria’s Department of Petroleum Resources, the government agency responsible for licensing operations and certifying oil facilities, warned that Transcorp had no specific licenses for selling oil in the upstream sector.
Like Africa’s largest economy, Nigeria is facing economic downturn after crashing crude oil prices and currency depreciations.
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This story was compiled and shared by Fox News based on material provided by Nigerian media.
