The drive to reform Nigeria’s oil and gas industry just took a detour that leads nowhere but the departure lounge that we started from. After many years of legislative struggles, many thought the Nigerian oil and gas industry was on the verge of undressing itself of the opacity that has characterised it for many years. It took series of debates, public hearing, advocacy and sensitisation, research, consultations and lobbying for the national assembly to eventually arrive at the PIGB that was sent to President Buhari earlier this year for his assent. The passed bill is the first in the series of bills under the PIGB aimed at reforming Nigeria’s oil and gas industry. Many had hoped the president would assent to the bill and usher a new era in the industry currently responsible for more than 90 per cent of Nigeria’s foreign earnings. By signing the bill into law, the president would have been remembered for consummating the legislative framework for lasting reforms in the oil and gas industry initiated by past administrations.
Contrary to the widespread expectation, the president surprised the nation when news filtered last week that he withheld assent to the PIGB passed and forwarded to him three months ago. By that singular decision, the president has temporarily matched the break and slowed down the journey to reforming Nigeria’s oil and gas industry. Withholding assent to a bill passed by the national assembly is really not new, and there is nothing bad in the act itself. It is part of our democratic process especially the acknowledgement of separation of powers. The law empowers the president to withhold assent. However, the grounds on which the president has withheld assent is what has elicited interest from observers. The president believes passing PIGB into law will restrict the powers of the minister of petroleum in the management of the oil and gas industry. The argument of the president may be valid for anyone that has leanings for a socialist economy or its variations.
It is difficult to accept the argument of the presidency considering the expansive consultation and public hearings that were done before this bill was passed after nearly 20years of its introduction. The question that should be asked is: what exactly was and still the intent for PIGB? The bill is simply meant to lay the statutory foundation for the reform of the oil and gas industry, and completely transforms the Nigeria’s national oil company, NNPC, into a profitable and transparently run entity. A central objective of this reform is to instil transparency and widen the opportunities in the industry. The overarching aim is to reduce political interference and ensure that the industry is not at the whims and caprices of those in power. There is no gainsaying that the PIGB in its current form does not solve all the problems with Nigeria’s oil and gas industry; nevertheless, it is a major step in the nation’s drive for a new order. The bill addresses one of the fundamental provisions that have aided political controlling of the NNPC. Currently, the president is empowered by law to handpick members of the board of NNPC. In the same vein the minister of petroleum is empowered to award and renew oil blocks, a provision that facilitates the opacity and corruption in the industry. However, the new law replaces the power of the minister to award oil blocks, and now vest it in the Nigerian Petroleum Regulatory Commission (NPRC) which members will be appointed by president and approved by the national assembly.
Today, whilst the oil and gas industry generates more than 90 per cent of the nation’s foreign exchange, the total number of people employed by the industry is less than one per cent of the population. A reform of the industry will automatically attract more investment and increase employment opportunities. The world has moved from the pure socialist perspective of economics to capitalism and its modified variations. Why do we need the minister of petroleum to wield so much power in the running of the oil and gas industry in Nigeria when the many years of sustaining this approach has led us nowhere? The industry is in the current state it is because of the unnecessary political entanglements that have been created in the running and administration of the entire industry.
The decision of the president has now also introduced another round of uncertainty which will also affect investors’ decision in the country. The entire nation and stakeholders in Nigeria’s oil and gas industry have been following this proceeding and will probably get disappointed at the new decision. What it also connotes is that the PIGB may not come into law in this dispensation and will have to wait till after 2019. However, the law has also provided a possibility that could be explored by the lawmakers. The national assembly has the power to override the president and still pass the bill into law. What is important is the need to reform the oil and gas industry in Nigeria.