African Development Bank, Process and Industrial Development, P&ID court case against Nigeria, President Muhammadu Buhari | Federal government, external debt serving
Muhammadu Buhari, President, Federal Republic of Nigeria

In response to criticism from experts in the oil and gas industry, the Presidency has denied reports President Muhammadu Buhari’s refusal to sign the Petroleum Industry Governance Bill (PIGB) was due to a reduction of his powers and on advice from some ministers. 

Senior Special Adviser to the President on National Assembly Ita Enang, however, denied the reports and gave three reasons for the President’s refusal to assent to the bill, namely.

  • The provision of the bill permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated could affect FAAC allocations.
  • Expanding the scope of Petroleum Equalisation Fund (PEF) was at odds with the administration’s policy.
  • Some legislative drafting concerns which, if assented to in the form presented, will create ambiguity and conflict in interpretation.

What is the PIGB ?

The Petroleum Industry Governance Bill (PIGB) is one of four bills carved out from the Petroleum Industry Bill (PIB). The PIB was split in order to fast track the necessary reforms, having been stalled at the National Assembly since 2008.  The other bills are the fiscal regime bill, upstream and midstream administration bill, and the petroleum revenue bill.

The reasons may not hold much weight

A closer look at the President’s concerns, however, signal they may not have warranted his refusal to give assent.

 

 Implications of the non-passage 

Investments in the country’s oil sector will stall due to the non-passage of the bill.

Crude oil revenue is a key driver of Nigeria’s revenue and a slump in 2015 pushed the economy into recession. Softness in the oil sector partly contributed to the decline in GDP growth from 1.95% in the first quarter of 2018 to 1.50 in the second quarter of the year.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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