Last month, after much dilly dallying, and a particularly rowdy session which brought back memories of royal rumble legislation, the controversial Petroleum Industry Bill, that has aroused tension at the National Assembly since its presentation last year, was given a second passage.
The main objectives of the bill include: the establishment of a progressive fiscal framework that encourages further investment in the petroleum industry; creation of efficient and effective regulatory agencies; and promotion of transparency and openness in the administration of the petroleum resources of Nigeria. Sounds good doesn’t it?
Here comes the carrot: in achieving their functions and objectives under this bill, oil companies and regulatory institutions are to be guided by the principles of the Nigerian Extractive Industries Transparency Initiative (NEITI) Act of 2007. This would bring some much needed transparency into a petroleum sector beleaguered by unfathomable corruption.
And the sticks: The bill makes provision for a 10% community fund for oil producing communities, and confers upon the petroleum minister the power to grant and revoke oil licenses and leases.
Here comes the carrot: Nigeria is the 12th largest producer of petroleum in the world and the 8th largest exporter, and earns about $282 million (about N42 billion) from oil revenue daily.
And the sticks: an estimated 100 million Nigerians live below the poverty line, about 21 million Nigerians are unemployed, infant mortality rate is 70.49, life expectancy at birth is 43.83 years and a woman dies approximately every 3 minutes from childbirth in Nigeria.
And the Dummies: Lawmakers from the North and their counterparts from the South are divided on the 10% community fund for oil producing communities. Northern legislators argue that oil producing states already collect 13% derivation fund from the federation account, and are also catered for by the Niger-Delta Development Commission and the Ministry of Niger-Delta, so the 10% should be spread across board. Lawmakers from the South, and especially those from the Niger Delta, however are of the opinion that the goose laying the golden egg must be well taken care of, and by all means necessary.
Analysts at Standard Bank estimate that Nigeria has made over $1.6 trillion in oil revenue over the last 50 years while an audit conducted by NEITI on Nigeria’s petroleum industry from 1999 – 2008 indicated that the Federal Government earned a total sum of $269 billion (over N40 trillion) in revenue over that period. With power generation barely up to 5000MW and infrastructures in a state of comatose all over the nation, one if forced to ask: what happened to all these money? And perhaps more importantly, what is the future of Nigeria without oil? It is rather unfortunate that Nigeria’s crop of overpaid lawmakers have left the pertinent questions unasked while chasing after a tithe of the crumbs of a leavened national cake.
While adding my voice to the calls for proper development of the Niger Delta, it is hard to argue for the introduction of a 10% community fund while most of the revenue going into that region remains unaccounted for. The discussion I believe should be centred on saving as much of the oil revenue Nigeria is earning at the moment while the commodity still commands appreciable value.
It is time for each of Nigeria’s geopolitical zones must wake up from this oil-windfall induced, dangerous dependence on federal allocation which has killed creativity in revenue generation and develop their human resources and non-oil sectors in preparation for what lies ahead. Government has to take the fight against corruption serious and take drastic, painful steps to reduce recurrent expenditures and make more funds available for the execution of essential capital projects.
– Ogunyemi Bukola is a writer, an editor and a social media strategist