‘Resource governance in oil sector remains opaque, below par’
Poor improvement in almost all benchmarks or precepts used in measuring performance in the oil and gas sector has been attributed to the lack of transparency and weak fiscal intervention by regulators.
According to the Nigerian Nation Resource Charter (NNRC), Nigeria lags in proper use of oil and gas earnings, even as trust between the citizens and the governed appears to be non-existent.
Discussing the NNRC’s 2019 benchmark report recently launched in Abuja, and unveiled in Lagos, yesterday, Programme Coordinator for NNRC, Tengi George-Ikoli, said the non-passage of the Petroleum Industry Governance Bill (PIGB), remained a major setback to the efficient management of the nation’s resources.
To ensure effective management of these resources, she said NNRC assesses the governance framework used to manage Nigeria’s natural resource wealth against 12 economic best principles towards encouraging reforms.
She said Nigeria is known for setting targets, including increasing crude oil production to three million barrels daily, reducing the cost of extraction by five per cent, increasing domestic refining capacity, facilitating or providing a large number of well-paying jobs for youths, and taking 100 million Nigerians out of poverty in the next 10 years.
However, George-Ikoli said these targets would only be attainable if Nigeria’s petroleum wealth is managed appropriately.
“Diversification, hailed as the saviour for Nigeria’s economy can only be achieved by using Nigeria’s resource wealth to fund diversification efforts as done by Dubai, Norway, Saudi Arabia and other resource rich economies.
“Oil remains the driver and the lever needed to lift the larger percentage of Nigerians out of poverty as whatever happens within the petroleum sector directly or indirectly affects every other government policy direction and implementation,” she said.
Ken Henshaw of We the People, Centre for Social Studies and Development, identified unrealistic expectations placed on international oil companies in terms of CSR projects by the host communities often affect interventions in the country.
According to him, the leadership structure in the Niger/Delta has changed, as majority of the new leaders are former militants, thus creating a distortion in the negotiation process.
He expressed worry that the situation in the resource-rich region will likely be created in new oil producing states like Lagos, where related concerns and local impacts remain low.
Chibuike Onwusoro of Centre for Social Justice (CSJ), noted that government should introduce key incentives needed to drive investments in the oil and gas sector, even as it continues to tighten revenue leakages.
Gorge-Ikoli noted that with cases of improvement in other oil producing countries, diversification within the petroleum sector remained key to harnessing the linkages to the non-oil economy in Nigeria.