Oil debt recovery as panacea to economic viability

Nigeria’s political space has recently taken another dimension with the emergence of a set of reformists and critics since President Muhammadu Buhari assented to the Deep Offshore and Inland Basin Production Sharing Contracts Act.

By the new legislation, Nigeria is expected to get an estimated $62,190, 679,793.00 billion as at December 2018 as unpaid arrears from international oil companies.

The issue of recovering this huge amount of money for the Federal Government remains a focal point of concern to the reformists as to whether it can be recovered from the oil companies without full weight of legal machinery being put in place.

Before the presidential assent to the bill, the Supreme Court of Nigeria had in a suit filed by Bayelsa, Rivers and Akwa Ibom states in 2018 ruled that the Federal Government had the right to renegotiate royalties in its production sharing contracts if oil prices rose to more than $20 per barrel.  Shortly, after the court verdict, international oil companies rejected it, implying that the decision required a full legal back-up against the oil companies to recover these unpaid arrears.

This has resulted in trooping of legal entrepreneurs to lobby government seeking to be engaged as agents to recover the money based on five per cent incentive agreement to be paid upon recovery of the money in question.

The five per cent recovery fee was recently greeted with outcry by the critics who compared the percentage that would accrue to the company with Lagos State budget while turning a blind eye to the huge amount of money that Nigeria stands to get if the revenue in question is recovered.

Some even believe that the office of the attorney-general awarded the contract based on personal gain. Isn’t this a bizarre accusation?  While it had been made clear that the attorney-general of the federation has no power to make payment but it is the statutory mandate of the Federal Ministry of Finance Budget and National Planning to approve the dues to be paid to the company.

This is an amount that if recovered and managed judiciously is enough to transform Nigeria’s economic fortune. And, this is coming at a time when Nigeria is borrowing both locally and internationally to fund the N10.33 trillion 2020 budget. The unpaid revenue arrears is more than enough to fund a three-year budget of the country going by the 10.3 trillion budget presented to the National Assembly.

In view of the foregoing, the parameter for measurement and consideration should not be Lagos State budget but the 95 per cent revenue that Nigeria stands to benefit from the money, if recovered.

It is expected of every good citizen to exhibit high sense of patriotism above any personal gain and stop fuelling any unnecessary disquisition among Nigerians.

Rabiu Musa,

rabiumusa037@gmail.com