COVID -19: CISLAC for Reform of Nigeria’s Oil Sector

COVID -19: CISLAC for Reform of Nigeria’s Oil Sector

Civil Society Legislative Advocacy Centre (CISLAC)/ Transparency International Nigeria, a long-standing Civil Society engaging the Extractive sector is calling on the administrators of the oil and gas sector in Nigeria to take a more decisive action in a bid to reform the sector.

Since Nigeria started exploration in the oil and gas sector, we have experienced a plethora of notable commitments and pronouncement from the successive leadership of the relevant institutions governing the oil and gas sector in Nigeria focusing on the sector’s transparency, accountability, inclusive development, sustainable governance, management of refineries and issues of deregulation/liberalization of the sector.

We note that there are several reports on activities of the sector – including commissioned inquiries, audits and investigations that have stressed transparency and accountability as crucial elements behind the inefficiency and corruption in the sector. These accountability issues are responsible for the hemorrhage on revenue flows and oil production that have earned Nigeria’s oil sector a not-too-favorable reputation both locally and internationally. We commend the monthly reportage of the Corporation’s transactions as a welcome development which is contributing to improving the image of the Corporation and the global rating of Nigeria’s oil sector.

On the wake of April 8, 2020, we were met with a press statement signed by Dr. Kennie Obateru -Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation announcing the removal of subsidy in the petroleum products and also the decision for NNPC to hand over refinery management to an independent body.

This also have been reiterated by the GMD, of NNPC on several media appearances stressing the same issue.

We think that this is a step in the right direction considering the current hemorrhage occurring in the sector through the subsidy/under recovery regime and the running of the refineries.

On the other hand, we are worried about the position of both the substantive Minister for Petroleum Resources and Minister of state who have neither made any pronouncement on this issue since it was released to the public by the NNPC leadership. Hence, some pertinent questions need to be raised and answered:
i) on which law is this pronouncement made enforceable since the Petroleum Industries’ Bill (PIB) is not in-sight anytime soon;
ii) what is the implementation plan to implement this detailing how the effects will be cushioned by the government to avoid acute negative effect on the citizens and impending push back;
iii) who else is consulted on this decision so that prevent unilateral decision which is going to be refuted by other administrative stakeholders in the sector and makes it un-implementable?

We thereby call on the Presidency, the National Assembly and the Ministry of Petroleum Resources to wade into this issue and provide more clarity on this very crucial decision at this critical stage in our Nation’s economy which is still as at now largely dependent upon this sector.

Take the COVID-19 pandemic and its effect on the oil price in the world as an imperative for the need to diversify the nation’s economy and invest in other sectors which provide added larger added value and more disposable revenues to the underemployed and vulnerable like agriculture, technology, etc.

This is a wakeup call for all Nigerians to fight against the frivolous waste in the governance process. The continuous mismanagement and corruption of the extractive sector is eroding substantial investments in sustainable development. It is high time that the Presidency and the Legislature to implement a substantive cut in the cost of governance and channel these funds to sustainable development projects, which would benefit the poor as opposed to the elite, which is a disproportionate recipient of Nigeria’s common wealth. In times of crisis, projects that have no economic benefits should be terminated. Proper cost-benefit analysis before engaging in any project is the only way to reduce inefficiency and promote value for money.

God bless Nigeria
Signed:
Auwal Ibrahim Musa( Rafsanjani)
Executive Director – CISLAC