The Lagos Chamber of Commerce and Industry (LCCI), one of the leading Organised private Sector (OPS) groups championing the cause of broad-based growth of Nigeria’s economy, has set a five-point implementation agenda for the Federal Government on the just published Petroleum Industry Act 2021 to achieve the broad objectives of the law.
The OPS group, in a statement by its Director General, Dr. Chinyere Almona, while commending the National Assembly for passage of the Bill and President Buhari for signing the Bill, noted that
the Act had opened windows of opportunities in the oil and gas industry, with renewed optimism for increased inflow of investments, revenue generation boost, and job opportunities.
The Chamber also stated that the new law had ended decades of uncertainties concerning the future of the oil and gas industry in Nigeria as it now provided a robust legal framework that will support the reforms required to position the industry as an investment haven that attracts investors from across the globe.
With the emergence of a more structured industry, it offers a level playing ground that can attract massive Foreign Direct Investments (FDIs) into the country. This Act will also promote more competition that could bring about a more efficient system, more product choices, and lower prices in the longterm.
The OPS group, in its advisory advice to the government stated that to reap the full benefits of the PIA 2021, the government must pay attention to the implementation of the provisions of this Act to ensure all Nigerians benefit from the potential opportunities of the Act.
Specifically, it recommended that for a successful and inclusive implementation of the PIA 2021,
“there is a need to create more understanding through public enlightenment about the three percent revenue allocation to host communities to forestall a misunderstanding of the Government’s intentions and raise tensions in the oil-producing region. Beyond the enlightenment, there should also be a monitoring mechanism to ensure that the allocated funds are judiciously used for the development of the host communities.
“The Government should be firm and clear in their communications about the removal of oil subsidies or otherwise. Policy statements influence business decisions. The divergent statements by different government officials on the removal of oil subsidies create uncertainty. This is unhealthy and not standard practice for a sector that hosts billions of dollars of investment.
“The unbundling of the Nigerian National Petroleum Corporation (NNPC) should be done in such a way that it does not create unnecessary bottlenecks and bureaucracy in contract administration and project management in the oil and gas industry. The emerging companies should be run in line with the Companies and Allied Matters Act (CAMA) and the Code of Corporate Governance.
“The Chamber has always advocated for a fully deregulated downstream sector of the oil and gas industry and create a level playing ground where market forces are allowed to allocate resources through cost-reflective pricing. We however urge the Government to engage with all relevant stakeholders and players in the sector to arrive at an inclusive deregulation policy that creates a competitive business environment where all investors can thrive.
“The Act should be implemented with a focus on the areas of business regulations that make up the indicators of the Ease of Doing Business Ranking by the World Bank. Particularly, we need to do better with enforcing contracts within the oil and gas industry”, the OPS group added.
The LCCI also commended the commitment shown so far by the Federal Government in its appointment of an implementation steering committee to drive the implementation of this Act, urging the Presidency, Ministry of Petroleum Resources, and other institutions responsible for the implementation of this new law, to put in place a robust mechanism and roadmap, with due consultation with private sector operators and other stakeholders to drive effective and efficient implementation.
