Regulation as risk: A PPE Lens on the NMDPRA Controversy
John Onyeukwu
Regulation as risk: A PPE Lens on the NMDPRA Controversy
Resignation, Reform, and the Test of Nigeria’s Regulatory Institutions
By John Onyeukwu
Published in the Policy & Reform Column of Business a.m. newspaper, on Monday December 22, 2025
At moments of national stress, regulation can either steady the ship or quietly drill holes below the waterline. Nigeria’s energy sector now finds itself at such a moment, one made more consequential by the recent resignation of the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The public allegations by Aliko Dangote against Engr. Farouk Ahmed, until recently the CEO of NMDPRA, were never merely a clash between a powerful businessman and a regulator. They exposed deeper structural questions about how regulatory power is exercised, how economic value is protected or leaked, and how law and institutions function in a fragile political economy. The resignation of the CEO does not close this chapter; it opens a more demanding one.
This is not about personalities. It is about systems, and whether Nigeria’s regulatory architecture can withstand stress without losing legitimacy.
Using the PPE lens, Philosophy, Politics, and Economics, and grounding the discussion in law and business realities, we can better understand why these allegations matter, why the resignation is symbolically important, and why institutional follow-through is now unavoidable.
At its core, regulation is a moral undertaking. Regulators do not merely apply rules; they exercise delegated power on behalf of society. That power is fiduciary in nature—it must be exercised with restraint, impartiality, and fidelity to the public good.
Section 15(5) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) obligates the Nigerian state to “abolish all corrupt practices and abuse of power.” This provision is not aspirational; it is foundational. It establishes that the legitimacy of public authority depends on visible integrity and accountability.
A resignation may be prudent as a conflict-management tool, but it does not discharge this moral obligation. Where credible claims suggest that regulatory conduct may undermine domestic refining capacity, distort competition, or entrench import dependence, ethical responsibility demands more than administrative quietude. It demands institutional clarity.
A society that treats resignation as closure risks normalising moral evasion. Over time, this erodes the ethical spine of regulation itself.
Politically, this episode sits at the convergence of elite power, public suffering, and state credibility. It unfolds at a moment when Nigerians are being asked to absorb painful economic adjustments while trusting that the institutions managing strategic sectors are acting in good faith. In such circumstances, perceptions matter as much as facts. Even the appearance of regulatory inconsistency or elite impunity can deepen public cynicism and harden resistance to reform.
The Petroleum Industry Act (PIA) 2021, which created the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), was one of Nigeria’s most ambitious reform efforts in decades. Its promise was clear: depoliticised regulation, investor confidence, transparency, and value maximisation for the Nigerian people. It was designed to break with a long history of opaque decision-making and discretionary power in the petroleum sector. Any perception that the regulator operates inconsistently with these objectives weakens not just one institution, but the reform consensus underpinning the entire sector, including the willingness of investors and citizens alike to believe that change is real.
The resignation of the NMDPRA CEO may temporarily lower the political temperature, but unresolved allegations risk producing a more corrosive outcome: the belief that powerful offices can be exited quietly, without public explanation or institutional reckoning. In a context defined by subsidy removal, inflation, and rising hardship, this perception is politically dangerous. It reinforces narratives of unequal accountability and fuels distrust in government motives.
Trust, once lost, is expensive to rebuild. For reforms to endure, transparency and accountability must be seen not as optional gestures, but as foundational obligations of public authority.
Economically, the controversy highlights long-standing structural weaknesses. Nigeria’s continued reliance on imported refined petroleum products, despite significant domestic refining capacity, has predictable consequences: foreign exchange depletion, imported inflation, fiscal stress, and vulnerability to global supply disruptions. These are not accidental outcomes; they are systemic, reflecting decades of policy incoherence, weak enforcement, and regulatory capture that have repeatedly undermined local value addition.
If regulatory decisions or omissions contributed to sustaining this dependency, the resulting economic damage is not episodic but structural, compounding balance-of-payments pressures and constraining industrial growth. This is where the issue intersects with Illicit Financial Flow (IFF) risks, as recognised by the AU/UNECA High-Level Panel on IFFs, the United Nations, and the OECD. Modern IFFs rarely involve crude illegality. They often arise from policy and regulatory environments that enable rent-seeking, mispricing, capital flight, and avoidable value leakage, sometimes through transactions that appear legally compliant but are economically corrosive and socially costly.
At this stage, no conclusion should be drawn. But the scale of potential harm, combined with Nigeria’s fragile macroeconomic position, makes the risk itself sufficient to justify careful, independent inquiry.
Legally, Nigeria’s framework does not permit accountability to expire with tenure. Public office is held in trust, and the end of an appointment does not extinguish legal responsibility for actions taken while in office. The ICPC Act, EFCC Act, and the Code of Conduct Bureau and Tribunal Act provide clear statutory bases for examining abuse of office, conflict of interest, illicit enrichment, and other economic and financial crimes, whether alleged against serving or former officials.
In addition, Nigeria’s obligations under the United Nations Convention Against Corruption (UNCAC) and the African Union Convention on Preventing and Combating Corruption impose duties of transparency, impartial investigation, and equal application of the law. These instruments explicitly discourage selective justice or administrative silence in the face of serious allegations.
Due process protects everyone. It safeguards the reputation of the former officeholder, the credibility of the institution, and the confidence of the public in the rule of law. Anything less leaves suspicion in its wake, eroding institutional legitimacy and weakening the deterrent effect of accountability mechanisms.
From a business standpoint, regulatory certainty is cumulative. Markets are not reassured by silence; they are reassured by closure that is credible, documented, and final. Capital is patient with process, but intolerant of ambiguity that lingers without explanation.
Investors, local and foreign, do not fear regulation. They fear unpredictability, unresolved controversy, and opaque transitions that suggest discretionary power rather than rule-based governance. A leadership change unaccompanied by institutional clarification prolongs uncertainty, complicates risk assessment, and ultimately raises risk premiums across the sector, affecting financing costs and investment timelines.
A transparent, time-bound inquiry is therefore pro-market. It demonstrates institutional maturity, reassures counterparties, and signals that Nigeria is serious about rules, not personalities. In the long run, such clarity strengthens regulatory credibility and supports sustainable investment decisions grounded in confidence rather than speculation.
The resignation of the NMDPRA CEO should mark a transition, not an ending. It presents a critical opportunity for the Nigerian state to demonstrate that institutions matter more than individual officeholders, and that reforms are anchored in rules rather than personalities. Leadership exits, if mishandled, can either reinforce public cynicism or strengthen institutional credibility. The choice lies in how the moment is managed.
By authorising an independent, credible, and time‑bound inquiry into the issues surrounding NMDPRA, the Presidency would affirm a simple but powerful principle: accountability must outlive office. Such a process should examine both individual conduct and systemic weaknesses, not as a witch‑hunt, but as institutional self‑correction.
Transparency in process is as important as the outcome. Public communication, measured, factual, and consistent, would help reassure citizens and markets that the state is acting deliberately and lawfully. Where wrongdoing is established, consequences should follow in accordance with due process. Where decisions were lawful but flawed, reforms should be clearly articulated and implemented to prevent recurrence. Either outcome strengthens governance.
Beyond individual accountability, this moment should catalyse deeper institutional repair. That includes clarifying regulatory mandates to eliminate overlap and discretion, tightening oversight mechanisms through routine audits and performance reviews, strengthening inter-agency coordination to close enforcement gaps, and embedding enforceable safeguards against conflicts of interest and regulatory capture. Institutional design must actively anticipate risk, not merely react to crisis.
It also requires reinforcing professional norms within regulators, ensuring that technical judgment is insulated from political or commercial pressure and anchored in evidence, law, and public interest. Capacity building, ethical training, and transparent decision-making processes are central to this effort.
When regulation becomes a risk to the economy, accountability is no longer optional. It is the price of legitimacy and the foundation of reform. Managing this transition with integrity would signal that Nigeria’s reform agenda is resilient, self-correcting, and ultimately worthy of sustained public trust.
http://www.policy.hu/onyeukwu/
“Let us move forward to fight poverty, to establish equity, and assure peace for the next generation.”
-- James D. Wolfensohn
This message contains information which may be confidential and privileged. Unless you are the addressee (or authorized to receive for the addressee), you may not use, copy or disclose to anyone the message or any information contained in the message. If you have received the message in error, please advise the sender by reply e-mail, and delete or destroy the message. Thank you.