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Making the best of reforms beyond PIB

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The debates on the Petroleum Industry Bill (PIB) rage on the hallowed chambers of legislators, the highbrow offices of operators and stakeholders and on the streets. In this analysis, Najim Animashaun, a seasoned oil and gas expert and Partner, Gulf of Guinea Consulting, underlines the imperatives of reforms in the oil and gas sector and the need for government to undertake more urgent reforms in the sector

 

The Petroleum Industry Bill (PIB) that is before the National Assembly is the first time in Nigerian history that the complete overhaul of the legal regime of the sector has, since 1963, occurred in a democratic dispensation, and, more importantly, not coincided, at least within two years, of a new constitution or restructuring of the Nigerian state occurring.

These two connections would be coincidental or even accidental, if five of the most consequential structural or constitutional changes to Nigeria’s political-geography had not happened within two years of major petroleum industry legislative changes.

Successive governments since Frederick Lugard amalgamated Northern and Southern Nigeria have designed legislation to exert control over and extract revenue from the petroleum industry. That would not be a concern, were that fixation accompanied by an enterprising mind-set rather than narrower imperial or statist ‘rentier’ goals. Why consult the governed when designing governing systems when you can have a monopoly on resources to fund government, essentially without imposing or effectively enforcing tax on the populace? Why create an energy sector, when tax and other resource revenues enter government coffers? The default mind-set is thus to secure the resource for revenue for the government. And the constitution is there to support that endeavour. This mind-set is consistent with creating an extractive industry but is anathema to creating a diversified energy sector. That constitution making and petroleum legislation have gone hand in hand at critical junctures of our history thus bears further scrutiny.

For present purposes, constitutions should chart a path for the future. But when combined with petroleum legislation, including the current PIB, they tend to focus on solving past problems than meeting future challenges. Or as the Columbia Center for Sustainable Investment (CCSI) described the PIB as “a small step when Nigeria needs a leap”.

“The PIB, ultimately, fails to account for climate change, acknowledge the Paris Agreement, and address the need for diversification to adequately prepare Nigeria for the energy transition that is already underway, ‘’ CCSI notes in its blog. They continue “rather than locking more capital into projects and infrastructure that will soon be obsolete, Nigeria should be promoting the stewardship of assets that propel the energy transition forward, not those that will be left behind”.

In short, the PIB does well to play catch up, while being woefully unprepared for what’s coming next. NNPC is not only way behind its peer National Oil Companies in planning energy transitions, but the PIB’s proposed new NNPC limited is not equipped for the monumental changes facing the energy sector. Equinor, for example, Norway’s National Oil Company (NOC), is an investor in Oxford PV, an innovator in solar panel production using Perskovite cells. Equinoris also creating the world’s first fully decarbonised industrial cluster at an old chemical plant in Saltend, England.

Where Equinor is investing in cutting-edge solar and Carbon Capture and Storage technology, the PIB obsesses over applying 10 per cent of revenue from acreage rents to subsidise petroleum exploration in frontier basins for reserves that may not be worth much after 2030, elevating sectional political agendas over compelling commercial and climate change priorities.

Policy blindspots to changing global trends can be traced to the 1914 Ordinance. That law restricted participation in Nigeria’s oil industry to British companies, while also claiming ownership of the resource for the British crown. While excluding European competitors was good for Britain, was it any good for newly amalgamated Nigeria, or even in the Lugard administration’s enlightened self-interest, especially as the colonial office refused to fund exploration at the time? Imperial policy and post amalgamation public revenue demands drove the 1914 and subsequent petroleum legislation that Nigerians in the 1940s dubbed ‘obnoxious ordinances’.

Only upon enacting the 1963 Mineral Oils Amendment Act were these ‘obnoxious ordinances’ repealed, making room for Italy’s Eni to become Nigeria’s first non-British oil concessionaire. This amendment also came on the heels of the 1963 Republican Constitution that made subtle but consequential changes, beyond declaring Nigeria a republic, strengthening executive powers. Changes that enhanced state control over petroleum and gave the Prime Minister operational control over the security services. But changes that also triggered military intervention and the descent to civil war.

By 1965 Nigeria began asserting its desire to participate in the sector without defining whether this would-be private sector or government led. The Tafawa Balewa government negotiated a 35 per cent option to participate in Eni’s concession in 1963. In 1965, the deal with Shell over the Port Harcourt refinery included a term vaguely granting options for “Nigerians” to participate.

Shell’s reluctance to pay royalties and fees to the Federal Government during the civil war influenced government policy, paving the way for Nigeria to assert resource sovereignty and vest vast discretionary powers in the Minister of Petroleum under the Petroleum Act 1969. Abolishing regional governments and creating 12 states, in 1967, made Nigeria a federal republic thereby increasing the centralisation of power and centralisation of revenues from oil to the Federal Government. By 1971 oil revenue began exceeding non-oil revenue. This would continue for 45 years until 2016. Greasing political power with revenues from resources is a powerful multiplier of executive authority.

A literal demonstration of the allure the power of petroleum legislation backing constitutional authority is the fact that all present and past presidents in this Fourth Republic, with the exception of Goodluck Jonathan, for all or some of their tenure, made themselves minister of petroleum; dispensing altogether with any pretence of governing through ministers. Something no military or civilian leader before them ever did. To its credit the PIB devotes substantial energy to curbing these discretionary powers.

Until 1971, the minister’s wide discretionary powers under the 1969 Act were restricted to policy and regulation. It was not until the Nigerian National Oil Company (NNOC) was formed as part of the requirements for Nigeria to join OPEC, that the fusion of policy, regulation and commercial operations became possible. This vastly increased the operational scope and exercise of ministerial discretion. Thereafter commercial petroleum operations fueled ever deeper patronage networks that have come to define Nigeria’s petroleum and political landscape.

Battles over operational and commercial decisions between the management of NNOC and the Permanent Secretary, Ministry of Mines nearly caused Nigeria to default on her obligations in 1973. Without adequate capitalisation and no operational autonomy NNOC was unable to function commercially. The Murtala-Obasanjo regime, rather than set NNOC commercially free, decided to abolish the ministry altogether and yolk NNOC’s successor NNPC with policy and regulatory responsibility, while repeating the earlier mistake of not capitalising NNPC. The net effect is that NNPC was no more autonomous than NNOC but now had to set national policy and regulate the oil companies. Essentially, Government threw the baby out with the bath water in the NNPC Act 1977, which act also accompanied another monumental wholesale constitutional change – the 1979 Presidential Constitution and the creation of additional states.  Three years after the NNPC Act was decreed, the “N2.8-billion oil money is still missing” scandal Fela sang about in 1985 occurred – an NNOC-type scandal all over again.

Meaningful reform came during Ibrahim Babangida’s administration, which arguably made more consequential commercially oriented reforms and promoted more private sector led indigenous participation in the petroleum sector than any administration since Tafawa Balewa amended the Mineral Oils Act.

Babangida, notwithstanding, failings in other spheres, also created new states and promulgated a new constitution of 1989 (from which the 1999 constitution is cloned). In the petroleum sector, he incentivised Deep Water exploration, restructured NNPC along commercial lines – creating and incorporating strategic business units such as Nigerian Petroleum Development Company and Corporate Service Units such as NNPC headquarters, which survive to this day. He appointed the first independent chairman of NNPC.  He even announced plans to commercialise NNPC through the Technical Committee on Privatisation and Commercialisation (now the Bureau of Public Enterprises).

He also separated policy functions from regulatory functions reestablishing the Department of Petroleum Resources as regulator in 1988.  Babangida’s reforms decoupled from 25 years of increasingly statist- driven policy re-making the petroleum landscape without enacting a new framework law . The PIB is the policy progeny of these reforms, but cannot shake off the limiting statist impulses.

After 20 years of struggling to pass a PIB, we have reached a fork in the road, with a bleak future for petroleum and no accompanying structural political change on the horizon. Petroleum can no longer paper over the cracks in the constitutional structure. It behooved this government to have more ambition than to bet on a petroleum future when our petroleum past, at the best of times, has produced suboptimal returns. In light of the apparent decoupling of structural or constitutional change from petroleum policy reform, Nigeria may be missing that rarest of opportunities to forge a new energy future untethered to hydrocarbons, essentially bypassing the industrial revolution in the way Nigeria did with telecoms.

The PIB would have been a forward-looking piece of Legislation in 1992 when the Earth Summit in Rio de Jenario, Brazil brought Climate change into international political consciousness. It would even have positioned the industry for greater domestic utilisation and diversification had it been passed in 2000. But, today, it is a day late and dollar short. Though, perhaps, this is better than no dollar at all.

 

  • Animashaun is a Partner at Gulf of Guinea Consulting, Abuja.

 

Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics

The Nation

Power should shift to Southeast, says Ufomba

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By Emmanuel Olades, Deputy Editor

 

The clamour for power shift to the Southeast geo-political zone is being intensified by politicians from the zone.

How realistic is the agenda? A prominent Igbo politician and former governorship contender, Chief Reagan Ufomba, said there is justification for the agitation.

“Where there is inequality, there will be no justice;  there will be no unity,” he told reporters in Lagos.

The Peoples Democratic Party (PDP) chieftain said there are many Nigerians from the Southeast who are eminently qualified to succeed President Muhammadu Buhari in 2023.

He described Igbo as good managers, saying: “Anything you give to an Igboman, he turns into gold. Give Nigeria to an Igbo to run, and all will be well.”

Ufomba said there are agitations in the Southeast, owing to persistent feeling of exclusion from federal power. “There are poverty, unemployment, hunger. So, there is agitation,” he stressed.

Ufomba maintained that Igbo presidency is not debatable in 2023. He said it is either Igbo president or nothing.

“In 1999, Obasanjo came from the Southwest. In 2007, Yar’Adua came from the Northwest; a fantastic president who admited that the poll that brought him was flawed.

“Jonathan came from the Southsouth. In 2015, Buhari came from the Northwest. It should be the turn of the Southeast in 2023,” he stressed.

Ufomba has other priorities. For 12 years, he has been gazing at the Abia Government House. “To govern Abia remains my vision,” he said without much elaboration. “I will take that decision in 2022,” he added.

Abia is another mini-Nigeria as the various ethnic groups struggle for the front seat. To foster unity, the Abia Charter of Equity was agreed upon by the founding fathers of the state. Thus, Orji Kalu from Abia North became governor in 1999. His successor, Theodore Orji, is from Centeal. In 2015, Okezie Ikpeazu from South became governor.

Ufomba is from Central. Therefore, what is the chance of assuming the reins? He said his chance is bright. “Power walks. It doesn’t fly. It will walk through Abia Central,” he said.

The PDP chieftain hailed the idea behind the charter of equity. “What is fair to all is good. The charter defines the best principles and strategies for sharing and distribution of power. I support it,” he added.

However, Ufomba said the discussion on succession should not take the front burner now so that the governor will not be distracted.

He commended the governor for fighting the infrastructure battle in the state by constructing the roads, building hospitals, sponsoring human capacity development and sending artisans abroad for skill acquisition training.

Ufomba said: “We will assess him(governor)in 2022. He is on the right course. He has paid the backlog of salaries. He has done over 100 roads in Abia. When I joined the party in 2017, I discovered that the governor was being sabotaged. The federal roads he was constructing were stopped. The design of the bridge at Osisioma was not released. Over nine federal roads in Abia are being rebuilt. He has been doing that, whether he will get refund or not.”

In his view, Abia is work in progress. For the state, life is full of ups and downs. The state is surrounded by seven states-Imo, Anambra, Akwa Ibom, Rivers, Enugu, Ebonyi-all of them linked by federal roads. Yet, these federal roads are abandoned.

Ufomba said the distant Federal Government can hardly cope with the items on the Exclusive List in the constitution. Lending his voice to the call for the devolution of power, he said:”Until the nation is restructured to give room for states to manage certain infrastructure in these states, there will always be abandonment.

“Most of the federal roads should be handed over to states. Why should the Federal Government should be coming to Abia to repair roads?”

Ufomba also assessed the Buhari administration, saying much still needed to be accomplished. He noted that the policies of the government favoured. But, he lamented that young people now find it difficult to farm.

On security, he said: “No foreign investment can come when there is no security. Insecurity makes the environment to be hostile. Politics is the only industry that works.

The PDP chieftain said security ought to have improved because the president is a General who understands the terrain. He observed that the first constitutional priority of government is security. He called for the change of service chiefs, an end to banditry and misbehaviour of herdsmen.

On economy, Ufomba said: “Inflation is an indication that the economy is bad. The economy is in shambles.  People now say that Jonathan was better.”

But, he said on anti-corruption fight, “Buhari has done a little well. “The complaint, he said, revolves around the methods for fighting graft.

“People are concerned about modus operandi. Let there be due process and transparency. EFCC has become a debt collector,” he added.

 

Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics

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The Nation

Abandoned health facilities litter Edo communities

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 Communities in Edo State lack good hospitals and are as such at the mercy of ill-health. Many of the health care centres are in a bad dilapidated shape with many abandoned, writes FRANK IKPEFAN

 

For residents of Ojavun, and Uzebba communities in Edo State, a good hospital exists only in the dream.

Apart from the lack of other basic amenities, the absence of an equipped hospital means there is virtually no obvious dividend of democracy in the areas.

The Uzebba health centre is now a habitation for rodents and reptiles; residents say the scare of these wild animals is the beginning of wisdom.

In Edo North, the primary health care centres built with millions remain in ruin, an investigation has revealed.

Many of the health care centres are in a bad dilapidated shape with many abandoned.

Three primary health care centres which ought to alleviate the health crisis in the three communities by providing a basic, affordable and accessible health care are in a state of disrepair.

PHC constituency project allegedly nominated by Iriase

The development has led to anguish for members of the communities, who often have to go as far as Sabongidda – Ora and Afuze, both in Owan East and West Local Government Areas to access medical care.

The trip is a burden to the less privileged and pregnant women in the communities. Many people have died from travelling long distances for medical care, a member of Ojavun community told our reporter.

Community’s health centre converted to church in Edo

In Uzebba community, a primary healthcare centre (PHC) abandoned by the government has been converted to a church.

The PHC, conceived as a place for diagnosis and treatment of disease has been converted to a worship centre for Christians in the area.

The project, which has been abandoned for ten years, according to residents of the community, now plays host to a fast-growing protestant church despite the absence of a public medical facility in the community.

“This project has been abandoned for the last ten years. Our people don’t have access to any health care facility to use. We go to Sabo before we can have access to medical care.

“Please we need help. If the government can help us complete this facility we will be very happy. At least that will help us and our children, especially our pregnant women during pregnancy. We will not have to go as far as Sabo before we can have access to treatment,” a member of the community, Justice Osagie, said.

Uzebba: Constituency project abandoned, overgrown by weeds

As it is with state government health projects so it is for federal government projects in the same community.

A PHC project in the same community that was captured in 2015 under the Federal Government’s intervention programme (constituency project) has been overgrown by weeds.

The project, allegedly nominated by a former member of the House of Representatives, Pally Iriase, has faded into an unpleasant sight of taxpayers’ money put to waste.

But the former Deputy Chief Whip of the House of Representatives denied nominating the projects.

Iriase, in a text message to The Nation, said: “I didn’t nominate any health centre for Uzebba throughout my tenure in the House of Representatives. So I am not connected with the abandoned project you referred to in your text.”

However, according to Tracka, a citizen advocacy group, the project, which was conceived as a health centre under the zonal intervention project with a borehole, was awarded in 2015 for N30 million.

Tracka, in its 2016 Federal Constituency Projects Report, said the lawmaker approached the community in 2015 and requested for a plot of land to execute the health centre, promising to build a grade B facility for the community.

Abandoned Uzebba PHC
Abandoned Uzebba PHC

The Community Head, Chief Dogo Samuel, according to the report, told Tracka team that despite the provision of the plot of land by the community as requested, the health centre is yet to be completed despite several efforts.

Also, in a letter by a former Special Assistant to the lawmaker, F. O Agge, in 2016 confirmed that Iriase nominated the project as part of his effort to ensure that “Uzebba benefits from federal projects.”

The former lawmaker thereafter directed the community to the implementing agencies – the Benin Owena River Basin and the National Primary Health Care Development Agency for “performance status, implementation plans and duration.”

The abandoned Uzebba health centre in its present state has been turned into a habitation for rodents and reptiles.

Ojavun: Completed but not functional

In Ojavun, a community in Owan East LGA, another health centre project constructed by the local council is about to go down the drain.

The project, a primary health centre completed in 2019, has not been open to access by residents of the community. Residents of the community said the facility has not been equipped since its completion last year.

The modest size building stands solitary in an expanse of land surrounded by weeds and bushes. Giant grasses have overgrown the site so much that one would need to stand on a pedestal to peep into the shattered state of the bungalow.

As at the time of going to press, the structure has not been functional, thereby depriving members of the community access to a needed lifeline.

A member of the community, Esther Esemuze said: “We don’t have a health centre in this community. If someone is sick and is in need of emergency care, if we don’t go to Sabo or Afuze we can’t access health care. If a woman is in labour we will look for transport for hours before we will get. These are the challenges we face. That’s why this health centre was established so that we can receive help.

“This health centre was built so that it can help children and women, especially when they want to give birth. The health centre has been established and abandoned halfway. We are still where we are with no health centre. We have not moved forward; we don’t know where we are going, we don’t know where we are coming from.”

In 2018, President Muhammadu Buhari flagged off the revitalisation of 10, 000 Primary Health Care (PHC) Centres nationwide.

Under the first phase, the federal government which is collaborating with the lower levels of government and development partners in the scheme said it will work on a PHC in each of the country’s 109 senatorial districts in Nigeria. This means, three in each state and one in the Federal Capital Territory.

The president emphasised that the programme would focus on the poor, especially women and children under 5 years in the rural areas of the country. For children and women in Ojavun and Uzebba, a revitalised health care system in their communities is a miracle waiting to happen. It will no doubt be of great relief to their aching hearts and empty pockets.

 

 Edo  didn’t return calls

 

Efforts to get the Special Adviser to Godwin Obaseki, Crusoe Osagie to speak on the matter were not successful. Calls made to his mobile number were not returned. He was yet to respond to text messages sent to him as at press time.

But the governor, during the presentation of the 2021 budget to the state House of Assembly, stated that his administration has earmarked N11.3bn to strengthen the state’s healthcare system and provide quality healthcare services to Edo people next year.

While N1bn will be expended on contribution to the state Health Insurance Scheme, the other N10.3 billion will be used to strengthen institutions and systems required to provide affordable and quality healthcare service to the people.

Obaseki said: “The new design is that, with the pilot building of 20 primary health care centres for each local government to test it and the expansion to about 60, we hope to get about 250 PHCs in the next one and half years.

 

“In supporting a robust response to the COVID-19 pandemic, we would be reinforcing structures to support the provision of effective and efficient Medicare at the local government area level.”

 

  • Reporting was done as part of Civic Hive Media Fellowship 2020.

Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics

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The Nation

Okowa relaxes curfew in Delta

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Okungbowa Aiwerie, Asaba

The Delta State Government has announced a relaxation of the statewide curfew imposed on 22 October, 2020 following wanton destruction of public property.

The curfew which had run from 6p.m. to 8 a.m. would now be between 8 p.m. and 6 a.m. with effect from Saturday, October 31, State Information Commissioner, Charles Aniagwu disclosed.

Aniagwu, in a statement ,yesterday ,expressed appreciation to Deltans for observing the curfew, which is expected to restore normalcy in the state.

“As a government we are not unmindful of the stress our people are going through on account of the curfew, but it was inevitable in order to protect lives and property of Deltans.

READ ALSO: Creation of new wards to correct imbalance in Delta – Okowa

“I must thank Deltans for protecting the interest of our common patrimony by ensuring that no further destruction of public buildings was recorded in the state.

“As part of our avowed commitment to build a stronger Delta with our youths, let me also express the determination of the State Government to give effect to the decisions reached at the recent Town Hall meetings with youths in the state,” he said.

Aniagwu appealed to Deltans to comply with the curfew regulation to ensure that peace prevailed in the state.

Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics

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Army Rescues Five Abductees, Kill Bandits In Katsina

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By Augustine Okezie – Katsina

A joint military operation in Katsina/Zamfara border forest on Saturday led to the rescue of five abducted residents and left several bandits dead.

The Secretary to the Government of Katsina State, Mustapha Inuwa, who confirmed the development while receiving the rescued kidnapped victims from representative of the Commander, 17th Brigade, Katsina, said the coordinated operation was simultaneously carried out by the joint ground forces of the 17th Brigade and the Air force from Katsina and those in Zamfara axis.

He said the Joint military action, which started in the morning and lasted in the evening, had successfully led to the destruction of the bandits camps and recorded several casualties on their side.

”Some of the bandits fled and abandoned their kidnapped victims who became stranded and finally ran into the hands of the soldiers,” he stated.

A statement by the Director Press to the Secretary to the Government of Katsina State, Abdullahi Aliyu Yar’adua, quoted the SGS as saying: ” if the coordinated military occupation continues and carried out simultaneously in all the affected states, very soon armed banditry, kidnapping and cattle rustling would become history in the North West”.

The SSG commended the troops for their gallant operation and called on the leadership to sustain the tempo.

The five rescued persons include 2 males: Amadu Rufa’i, 45years and Habibu Yakubu, 25, both of Mazanya village in Jibia local council of Katsina State.

The three females were: Hauwa’u Lawali,13; Khadija Rabe, 13 and Sumayya Rabe, 10, all of Karamne village in Madarumfa region of Niger Republic.

Narrating their ordeals, the two men said they were kidnapped while working on their farms while the girls said they were hawking onions in Gurbi, which is a neighbouring town in Zamfara State, when the bandits whisked them away.

According to Rufa’i, they spent five days in captivity, adding that the bandits had started demanding for N10m ransom from his family when the military aircraft suddenly stroke followed by “gound soldiers”.

All of them attested that the operation had caused serious damages to the bandits and their camps, claiming to have stepped over several of their corpses in a struggle to get out of the forest.

 

Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics

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