Licensing Nigerian Black Gold

Licensing Nigerian Black Gold

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Investigating committee has been set up by the Nigerian House of Representatives to look at the processes of awarding licenses in the oil and gas industry.

Oil influences every facet of life in Nigeria. While the country’s economy is quite diversified, the effect of oil is everywhere: from government revenues and politics to environment, organized crime and corruption. However, the licensing processes of oil prospecting and mining are said to be flawed, resulting in huge losses for the country’s economy.

According to the House Speaker, Hon. Yakubu Dogara, the new committee is to ascertain the number of licenses granted as well as monitoring expiry dates, and in addition, enforce compliance with the processes and guidelines set for the acquisition of oil and gas.

Is President Buhari ‘Baba Go-Slow’ really slow?

This move is certainly part of President Buhari’s efforts to clean up the oil sector by fighting corruption, minimizing oil theft and cut the so called “round tripping” for subsidies to the minimum, all of these responsible for large leaks from the of the governmental pocket.

President Buhari, who was elected last March and is called as Baba Go-Slow by some, seemed to take swift action to tackle issues by making changes within the management of the Nigerian National Petroleum Corporation, known for inbred corruption and inefficiency.

The state oil company is not only involved in production, but actually regulates the entire sector plus controls the government’s oil revenues. Quite a source of conflict of interest, let alone the opportunities for theft.

Apparently the current situation is chaotic with no transparency due to the lack of data collection and processing, as it is seems from the statement of Hon. Gideon Gwani, the chairman of this committee, who blames the problem on “unpatriotic and unscrupulous elements” .

He said that accurate records and data of all the companies or individuals that have been granted licenses for exploration should be collected as one of the measures to ensure they operate within the framework of the laws and guidelines.

Gwani expressed his regret that the nation’s most important sector falls short of expectations and blamed “unpatriotic and unscrupulous elements” along with “desperate expatriates” for undermining efforts by successive governments in revitalization of the oil and gas sector.

Gwani also stressed that the authorities can’t afford the luxury of hesitating at times when the price of crude oil is gradually decreasing with its severe consequences on the country’s economy.

Offshore billionaires

Interesting coincidence that the committee has been set up just when an investigation involving over 11 million documents from 1977 to December 2015 revealed, that several secret offshore shell companies are linked to businessman Aliko Dangote, his allies and relatives.

According to Forbes, Nigerian Aliko Dangote is the richest man in Africa, with $15.4 billion wealth with heavy involvement in the oil business. It remains unclear whether Dangote pays his fair share of tax in Nigeria.

The scale of President Buhari’s task is enormous and no one should be surprised if he weren’t able to tackle everything even if he would be granted two four-year terms in his office. He would do very well if won the battle on one front. His tough reputation and history on corruption suggest that chances are greater for success than of his predecessors.

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