Opinion
Privatising Nigeria’s Petroleum Industry (1)
The Nigerian economic
and political lexicons had never been in want of the right choice of words when government decides to intervene in the affairs of the petroleum industry. This is more so as the Petroleum Act 1969 Now Cap 10 Laws of Federation of Nigeria 2004, which supervises and regulates the industry from which the NNPC Act 1977, was derived, authorises the government to intervene.
The 1969 Petroleum Act also made NNPC a vertically integrated national oil company which means that NNPC can engage in exploration, production activities, transportation, marketing, supply and distribution of both crude oil and petroleum products ( upstream and downstream activities) .
This is one of the greatest undoing of the corporation as these activities are quite enormous for just one corporation, hence the various calls for its unbundling and restructuring. Thanks to the restructuring of 1988, which saw the creation of twelve departments out of the corporation but sadly enough, all of them were both in spirit and letter appendages of the NNPC.
For these reasons, they could not discharge their functions optimally and efficiently as the various departments were caught up by regulatory capture; each of them could not function independent of their farther and in particular, the Department of Petroleum Resources (DPR) which is industry regulator. No thanks to the non -passage of the Petroleum Industry Bill (PIB), which seeks to correct some of the challenges facing the industry.
I argue strongly that the non- passage of the PIB by the National Assembly is contributing to the regulatory uncertainty which faces the government in the petroleum sector, afortiori to the economic hardship that is currently strangulating Nigerians of all strata and the continuing environmental degradation of the Niger Delta region by oil companies operating in the region.
This is more so as poor regulatory framework in a regulated economy such as ours would lead to an unstable petroleum industry.
Conversely, a dynamic, robust and proactive regulatory benchmarks could revitalise an ailing public institution. Furthermore, a robust law could compel the government, to maintain certain level of standards of public services for its citizens in terms of the supply of petroleum products. The absence of any proactive legal regime in the industry has orchestrated regulatory and economic policy uncertainty in the sector in Nigeria
President Muhammadu Buhari-led government in its wisdom, has correctly or incorrectly intervened just like his predecessors in the affairs of the corporation, by announcing a new price band for the PM.
The reason government gave was that NNPC could not adequately supply more’ than 50% of the petroleum products requirements of the country and that the independent marketers could not, under the prevailing price regime, secure enough forex for the importation of petroleum product without recording a loss. The government also argued that the new price regime is the only way to make the product available and reliable for Nigerians.
However, it could be argued whether there is any need for govemment to be engaged in the control and management of the NNPC. The nature and extent of this control and management seems less clear but sometimes desirable.
Given the international nature of crude oil market, the capital intensive nature of the petroleum industry and the importance of petroleum as a catalyst for economic development in most countries , it would not be difficult to argue for the government’s control of this sector.
However, historically, governments are not good managers of resources. The examples in Britain and Normay could suffice here. In Britain, the control and management of British Petroleum in the UK was formerly under the supervision of the UK’s govemment but was later fully privatised, hence the
efficiency of the BP petroleum with huge presence in more than 100 countries of the world.
Norway oil was also fully owned by government but was later unbundled into two private independent companies with one saddled with policy matters while the other is engaged with investment and portfolio management.
Thus, the failure of NNPC in Nigeria to deliver efficient services after 47 years of its existence calls for a rethink of the government’s continuing direct control and management of the petroleum industry, in any guise, including the fixing of prices of products. This call has become all time imperative.
It has been restated overtime that to correct the market failures in the petroleum sector, the best govemment could do is to set out enabling environment, ensures stable legal, political and social environment for private partners to engage in the development of petroleum resources; leaving the industry to fix prices based on economic forces of demand and supply, while the government maintains some form of control through firm regulations and fiscal policies.’
Dr Dike is a senior lecturer, Rivers State University of Science and Technology, Port Harcourt.
Samuel C. Dike
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Empowering Youth Through Agriculture
Quote:”While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries”.
The Governor of Rivers State, Sir Siminalayi Fubara, recently urged youths in the Rivers State to take advantage of the vast opportunities available to become employers of labour and contribute meaningfully to the growth and development of the State. Governor Fubara noted that global trends increasingly favour entrepreneurship and innovation, and said that youths in Rivers State must not be left behind in harnessing these opportunities. The Governor, represented by the Secretary to the State Government, Dr Benibo Anabraba, made this known while declaring open the 2026 Job Fair organised by the Rivers State Government in partnership with the Nigeria Employers’ Consultative Association (NECA) in Port Harcourt. The Governor acknowledged the responsibility of government to create jobs for its teeming youth population but noted that it is unrealistic to absorb all job seekers into the civil service.
“As a government, we recognise our duty to provide employment opportunities for our teeming youths. However, we also understand that not all youths can be accommodated within the civil service. This underscores the need to encourage entrepreneurship across diverse sectors and to partner with other stakeholders, including the youths themselves, so they can transition from being job seekers to employers of labour,” he said. It is necessary to State that Governor Fubara has not only stated the obvious but was committed to drive youth entrepreneurship towards their self-reliance and the economic development of the State It is not news that developed economies of the world are skilled driven economies. The private sector also remains the highest employer of labour in private sector driven or capitalist economy though it is also the responsibility of government to create job opportunities for the teeming unemployed youth population in Nigeria which has the highest youth unemployed population in the subSahara Africa.
The lack of job opportunities, caused partly by the Federal Government’s apathy to job creation, the lack of adequate supervision of job opportunities economic programmes, lack of employable skills by many youths in the country have conspired to heighten the attendant challenges of unemployment. The challenges which include, “Japa” syndrome (travelling abroad for greener pastures), that characterises the labour market and poses threat to the nation’s critical sector, especially the health and medical sector; astronomical increase in the crime rate and a loss of interest in education. While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries.
While commending the Rivers State Government led by the People First Governor, Sir Siminilayi Fubara for initiating “various training and capacity-building programmes in areas such as ICT and artificial intelligence, oil and gas, maritime, and the blue economy, among others”, it is note-worthy that the labour market is dynamic and shaped by industry-specific demands, technological advancements, management practices and other emerging factors. So another sector the Federal, State and Local Governments should encourage youths to explore and harness the abounding potentials, in my considered view, is Agriculture. Agriculture remains a veritable solution to hunger, inflation, and food Insecurity that ravages the country. No doubt, the Nigeria’s arable landmass is grossly under-utilised and under-exploited.
In recent times, Nigerians have voiced their concerns about the persistent challenges of hunger, inflation, and the general increase in prices of goods and commodities. These issues not only affect the livelihoods of individuals and families but also pose significant threats to food security and economic stability in the country. The United Nations estimated that more than 25 million people in Nigeria could face food insecurity this year—a 47% increase from the 17 million people already at risk of going hungry, mainly due to ongoing insecurity, protracted conflicts, and rising food prices. An estimated two million children under five are likely to be pushed into acute malnutrition. (Reliefweb ,2023). In response, Nigeria declared a state of emergency on food insecurity, recognizing the urgent need to tackle food shortages, stabilize rising prices, and protect farmers facing violence from armed groups. However, without addressing the insecurity challenges, farmers will continue to struggle to feed their families and boost food production.
In addition, parts of northwest and northeast Nigeria have experienced changes in rainfall patterns making less water available for crop production. These climate change events have resulted in droughts and land degradations; presenting challenges for local communities and leading to significant impact on food security. In light of these daunting challenges, it is imperative to address the intricate interplay between insecurity and agricultural productivity. Nigeria can work toward ensuring food security, reducing poverty, and fostering sustainable economic growth in its vital agricultural sector. In this article, I suggest solutions that could enhance agricultural production and ensure that every state scales its agricultural production to a level where it can cater to 60% of the population.
This is feasible and achievable if government at all levels are intentional driving the development of the agricultural sector which was the major economic mainstay of the Country before the crude oil was struck in commercial quantity and consequently became the nation’s monolithic revenue source. Government should revive the moribund Graduate Farmers Scheme and the Rivers State School-to-Land agricultural programmes to operate concurrently with other skills acquisition and development programmes. There should be a consideration for investment in mechanized farming and arable land allocation. State and local governments should play a pivotal role in promoting mechanized farming and providing arable land for farming in communities. Additionally, allocating arable land enables small holder farmers to expand their operations and contribute to food security at the grassroots level.
Nigeria can unlock the potential of its agricultural sector to address the pressing needs of its population and achieve sustainable development. Policymakers and stakeholders must heed Akande’s recommendations and take decisive action to ensure a food-secure future for all Nigerians.
By: Igbiki Benibo
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