News reports say President Mohammed Buhari has finally sent the Petroleum Industry Bill to the Senate for consideration and passage. The Bill according to media sources among other things still proposes the restructuring of the Nigerian National Petroleum Corporation and the Petroleum Products Pricing Regulatory Agency. The NNPC will be replaced by a limited liability company, which shall be called Nigerian Petroleum Company (NPC Limited). The bill also proposes the establishment of an agency known as the Nigerian Upstream Regulatory Commission which will be responsible for the technical and commercial regulation of upstream petroleum operations alone.

READ: Nigeria to handover TAM of refineries to Indian companies

The Petroleum Industry Bill (PIB) was first introduced to the National Assembly in December 2008. A presidential committee set up in 2007 to look into the oil and gas sector came up with this bill, which aims to increase transparency at the NNPC and to increase Nigeria’s share of oil revenue. Drafts of the bill, however, became very contentious due to objections from the international oil companies (IOCs) and the Nigerian National Petroleum
Corporation (NNPC). Consequently, the bill was never passed into law. Towards the end of 2015, the PIB was amended to speed up its passage and was broken into different bills, one of which was the PIGB, to address the governance framework of the oil industry. The Senate President noted that the plan was to expedite the aspects of the old law that were not controversial while the controversial areas could be placed on hold. The two houses passed
the PIGB in 2018 but the President did not sign the bill till it ran out of time.

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In all the versions of the Bill, key themes that have constantly featured include; The ownership and management of petroleum resources, functions and powers of the Minister of Petroleum, the establishment of the Nigerian Petroleum Regulatory Commission (NPRC) to act as a regulator for the industry and the restructuring of the NNPC. According to the Minister of State for Petroleum Resources Timipre Sylva, this version that has been sent to the National Assembly is a harmonisation of all the existing versions from 2000 to date with necessary adjustments to address the concerns raised by the industry players. One of such concern was the recommendation of a single regulator for the entire industry as was stated in the PIGB which has been addressed in the current version of the bill.

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With more than a decade of deliberations and revisions, it will be a great relief to all stakeholders if this version of the Bill is finally passed into law. Currently, Nigeria is said to have one of the least competitive Deepwater fiscal terms in Africa and is increasingly losing significant amounts of potential investments to other African countries. Many stakeholders hold strongly that new investments in the oil sector is dependent on the passage of the PIB which would take a more holistic approach in addressing issues around the fiscal terms especially following the passage of the Deep Offshore and Inland Basin Production Sharing Contracts (amendment) Bill, 2019 (PSC Amendment Bill).

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News reports earlier this week say the Vice President, Prof. Yemi Osinbajo, speaking at a virtual meeting noted that the problems associated with Nigeria’s refineries will persist if the Federal Government continues to own and run them. According to him, the government should have no business running refineries as they should be in the hands of the private sector. He further noted that the government’s focus currently is to assist the private sector develop modular refineries. He listed a few private refineries coming on stream which include a 100,000-barrel capacity refinery located near Portharcourt, the Niger Delta Petroleum refinery in Delta state and six modular refineries that should come on stream soon.

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About 90% of the refined petroleum products consumed in Nigeria are imported. The nation’s refineries located in Kaduna, Warri, and Port Harcourt with a combined nameplate capacity of 445,000 bpd have long operated at low levels due to many years of underinvestment and poor maintenance. Despite continuous talk of revamping the
refineries, in 2019, combined capacity utilization of Nigerian refineries fell to 2.5%, an all-time low annual activity level since 1998 when NNPC started providing the data. Last year, Pipelines & Product Marketing Company (PPMC) reported that it imported 9,158,528mt of refined products (PMS, HHK, AGO & ATK) while it evacuated only 963,302mt of refined products from Nigerian refineries, implying local production was just at 10.5% of total refined products available for distribution. Going by the historical performance of these refineries, it is safe to agree with the Vice President that the Nigerian government has no business running refineries.

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Asides the modular refineries mentioned by the Vice President expected to come on stream soon, the country is also patiently awaiting Dangote’s 650,000 barrels perday capacity refinery. The BUA group also recently announced plans to commence a 200,000 barrels per day refinery and petrochemical plant in Nigeria to be located in Akwa Ibom State. Although it is widely believed that the local refining operations will reduce the nation’s reliance on
imported refined products, the question in the minds of many Nigerians is how local refining of petrol will impact the pump price. In this regard, the Minister of Finance, Budget and National Planning, Zainab Ahmed, stated that refining petrol locally will not significantly reduce the price of petrol since the refineries will sell at the international price, noting that the only expected savings will be freight or shipping.

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That said, Nigeria as a country has a lot to benefit from being a net exporter of refined petroleum products. Nigeria is the second largest producer of oil in Africa. The combination of rising shale production in the US, continued oversupply in the export market and weak demand, means the market for Nigerian crude is quite uncertain and a shift from export of crude to refined products bodes well for the country. The start up of these refineries will also
attract investment in warehousing and storage facilities, enhance employment opportunities and conserve the foreign exchange earnings of the country

READ: Six Modular Refineries billed to commence operation, FG says 

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The headline above seems a little inappropriate given the earnings of Bankers, vis-à-vis statistics on salaries and wages in the Nation.

The average Nigerian Banker earns at least four times the poorly implemented National minimum wage of N18,000; gets his pay promptly without being owed arrears, and enjoys other employment benefits, such as healthcare, without hassles.

Why then would these privileged few, whose wage bill cost the 13 NSE listed banks, a whopping N178b in the first three months of 2020, lockdown notwithstanding, need to supplement their already impressive income?

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Simple, because they need to meet up with their financial obligations.

The expectations are high for anyone with a decent job in a country where the unemployment rate is currently 27.1%, and where 28.6% of its population are underemployed.

The expectations are even higher for those whose work is in the banking sector, of whom it is erroneously believed, have access to unlimited funds, and an endless flow of credit facility, because they facilitate the consummation of volumes of such transactions daily.

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The peculiarity of HR policies in Nigerian banks does not allow for ‘helping’ of relatives into the same system, as is obtainable in the Nigerian Civil service. Hence, the basic assistance which Bankers can offer their ever-expanding network of dependants is direct financial aid, forcing them to engage in moonlighting activities to meet up the ‘hype’.

The activities below are from close observation and interactions with Nigerian Bankers.

Forex dealings

The existence of different exchange rates, coupled with the scarcity of FX for most sectors of the economy has given rise to opportunities for arbitrage and round-tripping. Most bankers, who by virtue of their jobs have become privy to their customers’ FX needs, are able to broker deals; matching the demand of FX with supply, and earning handsome margins in the process. Gratitude, loyalty, and referrals from their customers are an added bonus for flouting their Bank’s internal policies on staff participation in FX dealings.

Such dealings have in recent times expanded to include transactions in cryptocurrencies.

Personal professional practice

Nigerian Banking industry is a melting pot of various first degrees, with some using their bank jobs as a stop-gap for their employment problems, as they seek to improve on their chosen professions. Hence, it is not uncommon to see bankers start and run their startups in other fields, while still in paid employment of their banks.

Although, the Banks are likely to frown on not getting 100% commitment from their employees; they continue to provide a rich base of potential clients for these startups and have been their customers too.

Sports betting and Mobile Money agencies

Sports betting in Nigeria has opened up a new world of investment possibilities for sports enthusiasts and shrewd businessmen. Since 2009, when the first online sports betting site launched in Nigeria, over twenty more have joined to compete for the market in Africa’s most populous black nation, and they all seem to be thriving, as each sports competition sees the unveiling of another sports betting site in Nigeria.

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Bankers, with their knowledge of the industry figures, have had a first mover’s advantage in being agents of these sport betting firms.

The same holds true for Mobile Money agencies, where Bankers have been known to use the influence of their office to expedite mobile money agent approvals and secure POS terminals, which have consequently become inaccessible to the common man.

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Other activities

As with most business endeavours, Bankers generally indulge in businesses, in which they have a comparative advantage. Bankers in big cities use their cars to run shifts under popular cab-hailing services; some moonlight as real estate agents, because they can match customers with their real estate needs. A few others have become millionaires, by investing in their customers’ businesses. The possibilities are endless, as Bankers seek to make ends meet through their ingenuity, while staying relevant in their careers.

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Cyprian Ekwensi in his classic novel ‘Chike and the River’, made popular the phrase of a man who lives by the bank of the Niger, washing his hands with spittle. Sadly, this has become the lot of most Nigerian Bankers, as they live from paycheck to paycheck, exploring one loan option to pay off a previous loan, even as they condescend to their customers in volunteering financial advice, that they are better off implementing in their personal finances.

No one is immune to the economic squeeze our double-digit inflation has brought on fixed income earners, especially not our beloved bankers.