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Nigeria lost N61trn to non-passage of PIB – NEITI

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THE Nigerian Extractive Industries Transparency Initiative, yesterday, called on President Muhammadu Buhari to take urgent steps to halt the unending delay in the passage of the Petroleum Industry Bill, PIB, stating that the country has lost $200 billion, about N61.1 trillion, using current official exchange rate, due to the failure to pass an enabling law for the petroleum industry.

NEITI, in its latest Policy Brief, titled: ‘The  Urgency of a New Petroleum Sector Law,’ declared that some of the losses are  projected investments, put at $120 billion  ($15  billion  yearly),  which had been deferred due to regulatory uncertainty.

Regulatory  uncertainty

According to NEITI,  clear,  unambiguous  rules,  predictable policy-making and efficient  regulations  have been  lacking in Nigeria’s petroleum sector, since  the  process of enacting a law for the sector  commenced.

It disclosed that the  Nigerian  oil and gas sector had continued to deteriorate due to the fact that the laws governing the industry are not sufficient for effective regulation and in some instances too outdated to be relevant in  today’s  global energy environment.

It said, “Though eight years in the National Assembly, the motion around the PIB has been on for all of sixteen years. Sadly, there is little about what is going on at the moment to suggest real movement or adequate learning from the past. The PIB ship should be rescued from a start-stop, unhurried and uncoordinated mode and brought swiftly ashore.

“There is need for President Muhammadu Buhari to take the lead by investing his presidential capital on this all-important legislation, putting in place a mechanism for rallying the stakeholders to a consensus, and using this law as one of the pillars of the bridge to a much needed economic recovery.”

NEITI stated that the losses in economic terms, due to the non-passage of the Bill, had equally been huge, causing an hemorrhage on Nigeria’s foreign reserves and value of the Naira due to imports of over $26.4 billion  worth of refined petroleum products that should otherwise have been done in-country and loss of jobs in their hundreds of thousands for the teeming unemployed Nigerians.

The situation, it said, was in contrast to Ghana’s experience in passing its own law, noting that 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,” it explained.

While it acknowledged the plurality of action on the petroleum sector law, NEITI lamented that there is no evidence that Nigeria has learnt from its past experiences to guarantee that the present journey will be any different.

According to it, the current efforts at reviving the process of enacting the law are already exhibiting disturbingly familiar patterns and have added a new dimension on whether the bill should be taken en bloc or passed piece-meal.

NEITI said, “The process of enacting a new law for Nigeria’s petroleum sector has gone on for far too long, and at enormous costs to the country. More urgency and better coordination are needed on the passage of this very important bill.

“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. NEITI underlined that as an agency set up to enthrone transparency and accountability in the extractive industries, it has legitimate interest in a petroleum law for the country.

“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,  including power of the minister, ownership and control of the resources, host community benefits, environmental concerns, appropriate fiscal regime, among others, and in the process, every administration has produced its own PIB draft(s), but not the law.

“NEITI therefore recommended that an inclusive task team  should be urgently empanelled,  with the  President  in the lead  and charged with building consensus among stakeholders. This task team should draw up a clear and well-communicated roadmap and fast-track the passage of the law in piece-meal rather than an omnibus approach.”

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