IMF backs PIB, urges early passage

IMF headquarters 122 May 2013, Lagos – The International Monetary Fund, IMF, has urged an early passage of the Petroleum Industry Bill, PIB, at the National Assembly as it expressed support for the current reforms in the Nigerian energy sector.

According to the IMF, the PIB would “boost investment, government revenue and fiscal transparency.”

The executive board of the Fund recently concluded the 2012 Article IV consultation with Nigeria, based on which it said: “(The) directors welcomed reforms underway in the energy sector, and looked forward to an early passage of the Petroleum Industry Bill.” The consultation was concluded on February 6, 2013.

IMF maintained that wide-ranging reforms were key to making growth more inclusive and called on the Fderal Government to cut poorly-targeted fuel subsidies, adopt a rule to set the reference oil price in the budget, and bring the Sovereign Wealth Fund, SWF, into operation.

The IMF position on the PIB comes at a time the bill is encountering critical appraisals at the National Assembly.

Nigerian National Petroleum Corporation, NNPC, Group Executive Director, in charge of Exploration and Production, Mr. Abiye Membere, described the IMF endorsement as “heartening.”

He said this has given a counterweight to the criticisms of the Bill from the international oil companies, IOCs, in addition to giving the lawmakers the assurance and confidence that the document presented to them is of international standard and that it merits passage into law for the betterment of Nigeria and its citizens.

He said: “This initiative will provide a counterweight to the trenchant criticism coming mainly from the international oil companies regarding the bill.

“Ultimately, of course, the fate of the bill will be decided in Abuja, but the contribution of IMF helps to present an important international perspective on the bill for the benefit of the lawmakers who are fed daily with disparaging remarks about the document”.

Membere expressed delight that the IMF was also supporting the PIB despite the popular notion created by the IOCs that the passage of the bill would force operating companies to exit Nigeria for countries with more generous fiscal terms.

“The fact that the Fund supports the PIB, thereby dismissing the jeremiad expression of the oil majors’ concerns, is therefore very heartening.

“For those like me, inclined to take the IMF’s view as an earnest and neutral analysis, it is excellent to have the support of so qualified a body,” he added.

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