In recent years, Nigeria’s sudden oil and energy sector has seriously impacted the economy, leading to the country’s first recession in decades. This year the country has finally managed to crawl out of stagnation and back into growth.
The country’s government has been in recovery and is relentlessly pushing for the Petroleum Industry Regulation Act (PIGB), which would reform the country’s energy sector. The bill has been controversial and has turned many foreign investors and business partners off due to significant delays in passing the legislation.
The bill seeks to regulate the industry, which has been shockingly lacking in proper oversight and regulatory frameworks for over a decade. One of the significant changes brought about and regulated by the bill is the promised reduction in inert gas waste due to the occurrence of gas flares.
The new reform proposals are designed to harness this gas and process it into liquefied natural gas (LNG), which will enrich Nigeria’s gas revenues and drastically reduce harmful carbon dioxide emissions. There are, of course, many other problems that the draft law aims to solve.
The biggest focus for the PIGB is to clarify the Nigerian government’s role in regulating the oil industry and creating enforceable rules. There is a great need for transparency in the way regulations are made in the industry and for greater government accountability for the impact on the industry, which plays an important role in the country’s economic recovery.
Recognition of the need for reform has resulted in the drafting of a National Gas Policy, a National Oil Policy and an overarching Taxation Policy, all of which have been drafted as separate bills to be approved by the National Assembly.
Expected Benefits
Senator Tayo Alasoadura, chairman of the Senate Petroleum (Upstream) Committee, said in May this year that the bill would create a significant number of jobs for local Nigerians and pave the way for existing and new energy companies to function more smoothly once the law is properly established became.
Great emphasis has been placed on encouraging local businesses by prohibiting the employment of foreign personnel to perform duties and skills that are locally available.
For skills that cannot be obtained locally, foreign experts are hired to guide locals in acquiring the same. This is indeed a major boost for the domestic economy and comes at an opportune time after the crushing recession the country has experienced in the recent economic past.
Sen. Alasoadura continued: “Government revenues from the oil industry will increase. This means that more funds are getting into the hands of the government to pursue development activities. The reform of the law will make it easier for the industry to generate profits, thereby inviting foreign investors to boost the economy.
Niger Delta Image Source: Depositphotos
To be present
Electricity generation is expected to increase through greater utilization of domestic gas resources, which will spur the development of its industries.
There will be liberalization and deregulation of the downstream petroleum sector, and subsidies will be completely eliminated. The aim is to promote local companies and building contractors and to involve them more in shaping their country’s economy. This is a very empowering step.
The PIGB also gives ownership of any petroleum or mining discovery to Nigerians, whether onshore or offshore. The Revenue Sharing Act and other provisions such as the Host Community Fund, all listed in the bill, will guarantee this.
Safety and security laws in the energy industry have also been revised and updated for the benefit of the people. Much of the terror and threat posed by militants in the Niger Delta is to be combated and effectively minimized.
Although the threats posed by the terrorist groups have not yet been fully elucidated, the draft law should at least pave the way for better protection for those in the energy industry.
Philanthropists empower their fellow citizens
Despite the huge economic divide in Nigerian society, there are several wealthy individuals of Nigerian descent who are finding ways to give back to their homeland and empower those less fortunate than them. Philanthropy is not dead yet and the Nigerian economy is benefiting from the initiatives of some Nigerian billionaires.
The Aiteo Group is one of Africa’s fastest expanding energy industries and its green initiatives and assets are already revolutionizing Nigeria’s (as well as the larger African) oil and other energy-related industries.
Their CEO, Benedict Peters (who has a net worth in excess of $2.7 billion) hopes to bring Nigeria back into the global energy arena. Under Peters’ leadership, the company has attracted billions of dollars in foreign investment while enabling the development of local employees and other indigenous resources.
Peters has also supported other national charities in improving sanitation, health and providing basic amenities like clean water – to his fellow citizens.
Aiteo has also been in the news for its embrace of microgrid solutions and alternative energy. According to Peters, much of the country will not have access to a large network infrastructure. To solve this problem, Aiteo has backed aggressive projects and solutions that create microgrids and help most citizens in Nigeria to harvest energy without needing gas or oil.
Other notable Nigerian philanthropists include Folorunsho Alakija of Famfa Oil, whose charitable foundation focuses primarily on widows and orphans, has facilitated their empowerment by providing educational and legal assistance to those in need. Aliko Dangote is another such individual whose industrial group teaches numerous Nigerians and other West Africans.
So, despite the murky history of the beatings that the energy has suffered, it is commendable that the government and powerful Nigerian individuals alike are helping to bolster the industry and the Nigerian people.
There is an opportunity to further boost oil production in the country once investment and current regulations increase and empower the industry. In addition to oil, the gas and other petroleum industries are expected to increase over time. Perhaps Nigeria can now finally step into the future of the global energy economy. The turbulent past has taught important lessons, and Nigeria has learned and evolved from them.
DepositPhotos: African Oil Image Credit