Those who argue that Africa’s most populous country is a failed state often point fingers at the Petroleum Industry Bill, PIB.
The bill to reform the Nigerian petroleum industry – to make it more efficient and profitable – was first introduced in the Senate in 2008, but almost nine years later on the eve of 2017, it has not been passed by the Senate.
When the PIB was first introduced in 2008, President Musa Yar’ Adua was in power. He died two years later in 2010 but the PIB had not been passed. President Goodluck Jonathan stepped in the same year in 2010 and by the time he was leaving office in 2015, the PIB had not been passed. President Muhammadu Buhari was sworn into office in May 2015 and as we move to 2017, the PIB has not been passed.
Worse, the PIB has been broken into several bills that would be heard in batches for a long time.
Yes, you read it well. Three Presidents have been in power and hundreds of Senators have sat on the floor of the Senate since PIB was first introduced, but even though oil contributes over 90 percent of Nigeria’s foreign exchange earnings and over 40 percent of its revenue sources as disclosed by President Muhammadu Buhari during his 2017 budget presentation last week, the bill to make the oil industry more competitive and more efficient has dragged on for almost nine years.
In presenting his 2017 budget last week, President Buhari projected that Nigeria would generate 4.94 trillion naira next year and oil would contribute 1.98 trillion naira, or a little over 40 percent, of that amount.
A careful look shows that even the funds President Buhari hoped would come from recovered stolen loot are still funds from the oil and gas industry. In essence, oil still contributes almost 60 to 70 percent of all revenues in Nigeria.
The point is the petroleum industry remains the mainstay of the Nigerian economy and oil and gas would likely remain for the foreseeable future, Nigeria’s most important non-renewable energy source. The troubling fact is that nine years have passed but the PIB still has not seen the light of the day.
However, there is some hope that the Petroleum Industry Governance Bill, PIGB, being considered by the Senate would soon be treated accordingly as announced by the Senate President, Mr. Bukola Saraki, on December 7 when he declared open the Public Hearing on the PIGB in Abuja.
We all agree with Mr. Saraki that the Nigerian oil and gas industry today is yearning for good governance, competitiveness, transparency, indigenous participation and accountability, and this can only be done through the passage of a bill or bills that will reform the industry.
We also share his frustration that “It is unacceptable that till date, we still import over 90% of needed petroleum products (petrol and chemicals), we flare substantial gas produced, we have damaged our eco-systems and polluted our communities and cannot supply adequate electricity to our homes and industries”.
As he said during his speech at the Public Hearing, the above situation “has undermined our citizens’ standard of living, life expectancy, our national energy security and has resulted to other unforeseen fall-outs like: labour unrest; fuel queues; high cost of delivery of products; high cost of delivery of overall services in the overall economy; and unquantifiable wastage of national productivity as a result”.
Mr. Saraki should back his words with action because as he noted himself, “while the PIB was stalling and its passage delayed at the National Assembly, investment decisions in the industry continued to suffer, keeping the country’s future in limbo and denying Nigeria the unique opportunity as an oil and gas leader in Sub Sahara Africa”.
Senate President Bukola Saraki
We agree that the petroleum sector is a politically sensitive industry with diverse and divergent interests, and that there might have been the need to unbundle the PIB into manageable compartments that could be passed and implemented in tranches, but it would be necessary to have at least one of the bills passed.
The Petroleum Industry Governance Bill, the PIGB, which is being considered now is important because major reforms in the governance and institutional structure for the sector are necessary and urgent.
The Bill establishes the process for breaking the Nigerian National Petroleum Corporation (NNPC) into two commercial entities which will be limited by shares. The two entities will be known as the National Petroleum Company and the National Assets Management Company.ojp
Once the PIB is passed and signed into law, Nigeria will have the necessary legislative framework that is needed to ensure the creation and sustainability of commercially-oriented and profit-driven entities that makes possible value addition and the internationalsation of Nigeria’s petroleum industry.
A major drawback of the existing framework is the lack of clarity of roles, self- regulation, conflicts and unnecessary overlaps and as Mr. Saraki noted “The key objectives of the Petroleum Industry (Governance & Institutional Reforms) Bill therefore is to reform this segment of the industry by introducing international best practices that have led other countries to success in the development of their various oil and gas sectors. In doing this the bill will enable us;
- a) Create efficient and effective governing institutions with clear and separate roles for the petroleum industry;
- b) establish a framework for the creation of commercially oriented and profit driven petroleum entities that ensures value addition and internationalization of the petroleum industry;
- c) promote transparency in the administration of the petroleum resources of Nigeria;
- d) create a conducive business environment for petroleum industry operations”.
We urge the Senators to quickly deal with the governance bill and move swiftly to the thorniest issues: Fiscal Framework and Host Community issues.
If 2017 comes and goes without any PIB being passed by the Senate, those who say Nigeria is a failed state may have more ammunition to justify their stand.
Simon Ateba is the Publisher of TheSimonAtebaNews. He can be contacted on [email protected]://www.https://www.todaynewsafrica.com