The country is losing about $200bn as a result of its failure to pass the Petroleum Industry Bill as an enabling law for the oil and gas industry, the Nigeria Extractive Industries Transparency Initiative has said.
NEITI, in its latest policy brief entitled, ‘The urgency of a new petroleum sector law’, has said some of the loses were projected investments due to regulatory uncertainty, which experts had put at $120bn since the commencement of the process for the passage of the bill, or about $15bn annually.
The policy brief, which was made available to our correspondent in Abuja, stated that clear, unambiguous rules, predictable policy-making and efficient regulations had been lacking in Nigeria’s petroleum sector since the process of enacting a law for the industry commenced.
NEITI, which is an agency of the Federal Government set up to enthrone transparency and accountability in the extractive industries, also called on President Muhammadu Buhari to take the lead and infuse urgency into the process of passing a new law for the petroleum industry.
It said governance deficiencies had been equally prolific and noted that its 2013 audit of the oil and gas sector revealed that $10.4bn and N378.7bn were lost as a result of under-remittance, underpayments, inefficiencies, theft or absence of clear fiscal regime in the industry.
The agency further stated that the losses in economic terms had been huge.
This, it said, could be seen in the haemorrhaging of the country’ foreign reserves and slump in the value of the naira due to the importation of over $26.4bn worth of refined petroleum products that should have been done in the country, as well as loss of jobs in their hundreds of thousands by the citizens.
NEITI traced the journey towards the enactment of a petroleum law to the past 16 years when the reform of the sector started.
It noted that Nigeria’s oil and gas sector had continued to deteriorate due to the fact that the laws governing the industry were not sufficient for effective regulation, and in some instances, too outdated to be relevant in today’s global energy environment.
The situation, it said, was in contrast to Ghana’s experience in passing its own law.
It said, “As a new oil producing country, Ghana’s petroleum sector may not be as complicated as that of Nigeria. However, the fact that Ghana passed the law for its petroleum sector two years after commencing the process should be a lesson for Nigeria.”
“The PIB is one of the most important bills ever to be contemplated in Nigeria’s history, yet the one that has taken the most time and generated the most activity without legislation.”
It observed that the setbacks suffered by the bill were not due to poor understanding of the problems or the deficiency in expert inputs, but largely due to disagreements among stakeholders on the regulatory frameworks.
