Nigeria performed very poorly in a recent ranking of the way countries administer their oil, gas and mining industries, finishing a dismal 55th out of the 89 ranked countries.  Ghana, which only recently discovered oil, was ranked 13th, and best in Africa, followed by Burkina Faso, which ranked 20th.  In fact, out of about 20 African countries ranked, Nigeria lagged behind 16. The New York-based Natural Resource Governance Institute ranked the countries in policy areas such as “state-owned enterprises, taxation, licensing, local input, sovereign wealth funds and sub-national revenue sharing.”

Nigeria’s oil industry has long been known for its opaqueness and poor commitment to global best practices. It is, to all intents and purposes, a government unto itself, and hardly answerable to anyone except itself and its paymasters. It is a situation that has befuddled successive governments which have mostly paid lip-service to issues of reforms in the industry, while exploiting the loopholes and lack of transparency to their own selfish advantages, but to the detriment of the industry and the country at large.

Attempts to engender the needed reforms through the Petroleum Industry Bill (PIB) have stalled in the federal legislature for the better part of eight years. Even now, there is no end in sight to the logjam and political shenanigans which have hampered real progress in the industry.

At the inception of the current 8th Assembly, Senate president, Bukola Saraki, had assured the nation that the PIB was very high on the agenda and would be passed. Part of the strategy for this was to unbundle the perceived nebulous and controversial proposals of the original PIB into five components, starting with the Petroleum Industry Governance Bill (PIGB). While the Senate has passed this first component, the House of Representatives decided to take three of the components together.  Of course, these have not been passed, hence the Senate version is still awaiting concurrence from the House. At this rate, we are left to doubt the commitment of the legislature to the PIB and wonder if, indeed, it will ever be passed to the satisfaction of all the critical stakeholders in the industry. It is actions like this that stalled the reform of the industry, and made the country lag behind smaller oil producing nations.

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The PIB, if and when eventually passed into law, is primed to restructure the oil industry, streamline the coordinating role of the minister of petroleum resources, create an efficient and effective governing institution, promote transparency in the administration of the petroleum resources of the country and, finally, create a conducive business environment for industry operators.

All of these objectives constitute lofty ideas which experts believe would bring the industry to its optimal best and in line with global best practices. Why, therefore, is there no unanimity of purpose to bring this about? It is time for government and all stakeholders to get really serious. While the present opaqueness in the industry may serve narrow and short term interests, in the end, we are all losers.

The country’s oil industry, in many ways, mirrors the failings of the country.  While the few privileged elites in the corridors of power are satiating their primitive thirsts for oil funds, the host communities at the lower end of things, and the entire oil and gas industry, are stopped from actualising their full potentials for the benefit of all.  It is unfortunate that Nigeria abandoned its many other resources that had, until the discovery of oil, served it well to concentrate efforts on this resource, to its utter shame and damnation. Today, oil is viewed more as a curse than a blessing.

But, the nation must strive to get its acts together. Now that the diversification of the economy has become imperative on account of the crash in oil prices in the international market, the product is still the country’s major revenue earner that will be used to fund the desired diversification. It is, therefore, imperative that it is properly administered to maximize its benefits.  Nigeria, with over fifty years oil exploitation experience should not be a laggard trailing behind smaller countries in oil governance issues.