Why Nigeria lost $200bn —NEITI

THE Nigeria Extractive Industries Transparency Initiative (NEITI), on Wednesday, explained that Nigeria has experienced huge losses to the tune of about $200 billion due to failure to pass an enabling law for the petroleum industry.

It further explained that some of these losses were projected investments due to regulatory uncertainty which experts have put at $120billion ($15 billion yearly).

The agency, therefore, called on President Muhammadu Buhari to take the lead and infuse urgency into the process of passing a new law for the Nigerian petroleum industry.

In its latest policy brief titled, “The Urgency of a New Petroleum Sector Law”, which was signed by the Director Communications, Dr. Orji Ogbonnaya Orji, a copy of which was made available to the Nigerian Tribune in Abuja, the policy brief noted that clear, unambiguous rules, predictable policy-making and efficient regulations have been lacking in Nigeria’s petroleum sector, since the process of enacting a law for the sector commenced.

NEITI urged President Buhari to invest his presidential capital on this all-important legislation, putting in place a mechanism for rallying the stakeholders to a consensus, and using this law as one of the pillars of the bridge to a much needed economic recovery.

According to NEITI, “the process of enacting a new law for Nigeria’s petroleum sector has gone on for far too long, and at enormous costs to the country. More urgency and better coordination are needed on the passage of this very important bill.”

In the policy brief, NEITI expressed dismay at the inability of successive governments to enact a law for a sector that accounts for over 80% and 90% of its revenue and exports earnings respectively.

It observed that the setbacks suffered by the bill were not due to poor understanding of the problems or the deficiency in expert inputs, but largely due to disagreements among stakeholders on the “regulatory frameworks, including power of the minister, ownership and control of the resources, host community benefits, environmental concerns, appropriate fiscal regime, and in the process, every administration has produced its own PIB draft(s), but not the law.

It then advised that the PIB ship should be rescued from a start-stop, unhurried and uncoordinated mode and brought swiftly ashore.

The agency maintained that the PIB was one of the most important bills ever to be contemplated in Nigeria’s history, yet the one that has taken the most time and generated the most activity without legislation.

It, therefore, recommended that an inclusive task team should be urgently empanelled, with the President in the lead and charged with building consensus among stakeholders, saying the task team should draw up a clear and well-communicated roadmap and fast-track the passage of the law in piece-meal rather than an omnibus approach.”

NEITI noted that governance deficiencies have been equally prolific, because 2013 audit of the oil and gas sector revealed that $10.4 billion and N378.7 billion (N3.2 trillion at the current exchange rate) were lost as a result of under-remittance, underpayments, inefficiencies, theft or absence of clear fiscal regime in Nigeria’s oil and gas sector.

The agency further stated that the losses in economic terms have equally been huge; the hemorrhage on Nigeria’s foreign reserves and value of the Naira due to imports of over $26.4Billion worth of refined petroleum products that should otherwise have been done in–country and loss of jobs in their hundreds of thousands for the teeming unemployed Nigerians.