VENTURES AFRICA – … if the parliament remains firm on its current standing to withdraw the president’s right.
Almost two years and six months after the Petroleum Industry Bill (PIB) first landed on the table of the Nigerian House of Representatives, the lower chambers of the country’s parliament, an amended copy has finally been made public. However, it has some major alterations.
The most significant of several tweaks is the removal of a clause that usually granted the President, or Head of State, the power to dish out licences to oil operators without the consent of the parliament – largely known as the National Assembly in Nigeria. The process will now be made more transparent by employing an open bid strategy, where the highest bidder, after a competitive session, will be awarded the oil asset, or assets.
But why such a move?
Previous Nigerian military heads of government like Gen. Ibrahim Babaginda and late Gen. Sani Abacha are said to have handed out a significant portion of the country’s oil assets indiscriminately to friends and close allies during their administrations, making them some of Nigeria’s wealthiest individuals today. This, in contrast, was perpetuated in a society where, despite having one of the biggest economies in Africa, over 40 percent of the population lived on less than $2 a day, though this statistic has dropped to 30 percent as of February this year and the country’s economy has grown into the continent’s biggest with a GDP of $510 billion.
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The country’s oil returns account for more than 80 percent of its annual revenue, making it the most sought after sector. This is why an overhaul of what is considered “a highly corrupt system” has long been clamoured for. It is the reason the PIB was developed in the first place – to reposition the country’s most lucrative sector to become more transparent and progressive. “The rationale behind this amendment is simply to avoid the practice whereby the power for the award of oil blocks is discretionary,” a statement from the House of Representative read.
Asides weakening the president’s monopoly, the amendment also relieves the Minister of Petroleum from overseeing Nigeria’s public oil companies including the National Oil Company (NOC), Upstream Petroleum Inspectorate Agency (UPIA), Downstream Petroleum Regulatory Agency (DPRA), Asset Management Company (AMC).
“The rationale behind the removal of the ministerial powers is to ensure smooth running of the agencies without undue influence, and to guarantee independence of the same, which is in line with current global practice,” the report added.
