Why Nigeria’s economy bleeds despite oil exploration – Experts

27 June 2016, Lagos – Experts in the country’s oil and gas sector, have accused the Federal Government and the oil communities of ignorance to contractual agreement signed before exploration and production in the region.

Drilling operations on Bamboo 1 Well offshore Cameroon.

Drilling operations on Bamboo 1 Well offshore Cameroon.

This was as they attributed such dysfunction to policies and regulations supposedly meant to guide petroleum operations.

Disclosing this at a workshop with journalists organized by Natural Resources Governance Institute, NRGI, Managing Partner, Sterling Partnership, Mr. Israel Aye, stated that for the oil sector to develop to its fortune, there is need for development of the country’s legal framework, which requires that such laws, regulations and policies governing the industry should be unambiguous, comprehensive, flexible, transparent, dynamic and practical.

According to him, “Framework should be responsive to Nigeria’s peculiar environment and not merely an un-successful mimicry of global standards.”

He added that passing the Petroleum Industry Bill, PIB into law is fundamental to providing certainty to regulating the industry thereby attracting foreign investors which would inturn enhance development for the economy.

“Regulatory agencies in Nigeria need to develop the capacity to ensure good behavior of the new generation companies coming into the industries, as the IOC’s are operating on a higher code of ethics that is regulated.

He explained that the oil and gas industry in the country is blessed with vast deposit which should provide seed capital for development in other sectors.

“However, Nigeria is deficit in this aspect as the vast petroleum deposit has not translated into the development associated with it, compared to other oil rich countries.

“Apart from generally known products extracted from crude which includes, Petrol, Diesel and Kerosene, other products like tyres, roofing sheets, fertilizers, others could also be a positive byproduct of crude oil.”

He also lamented that government is solely concerned about the petroleum products gotten from crude, however, shortchanging itself of other benefits that could be generated from harnessing the full potential of crude oil.

He stressed that proceeds from oil revenues should be used for development effort as opposed to squandering it.

He cited that Norway, already have a re-investment program for its oil proceeds to develop other sectors of the economy that could encourage Internally Generated Revenue.

Thus, he urged the government to harness the oil proceeds to develop other sectors of the economy other than what is been practiced, “because oil will one day finish, as it is a non-replaceable natural resources,” he added.

On his part, Deputy Executive Director, Environmental Right Action, Friends of the Earth, Nigeria, Akimbode Olufemi, also blamed the country’s weak policy and legislations on laws inherited from the colonial masters, saying that such are outdated, ineffective and begging for review.

“Most of the environmental laws in Nigeria were enacted many years ago as far back as 1950, 1970s with reviews in the 1990s, thus these laws are outdated and urgently needs review with current realities in the sector.”

He added that the weak and inactive institutions especially those who regulate the sector like; DPR, NESRA, are marred in corruption.

There is lack of environmental laws to protects the local communities and livestock.

  • Vanguard
About the Author