Nigeria is one step closer to overturning a massive oil reform bill with aims to increase transparency and stimulate growth in the country’s oil industry after a 17 year struggle.
Both the Nigerian Senate and the lower house of parliament have passed the Petroleum Industry Bill (BIP), making it the first time both houses have approved the same version of the bill. It now only requires the Nigerian president’s signature to become law.
The legislation was broken into various sections for ease of passing. The Petroleum Industry Governance Bill (PIGB) was the first step passed by the House of Representatives. “The PIGB, as passed yesterday, is the same as passed by the Senate. We have harmonised everything and formed the National Assembly Joint Committee on PIB,” Alhassan Ado Doguwa, a key PIB lawmaker in the House of Representatives, told reporters in the capital Abuja after its passing. He further said that “Every consideration of the bill is now under the joint committee. We have broken the jinx after 17 years. We are working on the other accompanying bills.”
The importance of this Bill is that it will allow the government to move forward with taxation legislation, which could make it more attractive for companies to invest, particularly offshore. Aaron Sayne writes that “Transparency encourages competition, discourages illicit behavior and attracts investment. Accountable institutions reassure investors, improve regulation and revenue collection and result in higher production and earnings.” He goes on to argue that, “Given oil’s prominent role in the economy, Nigeria will struggle to break in to the top 20 economies without such reforms.”
According to Antony Goldman of PM Consulting, “It’s an unprecedented step forward. The PIB is something that has defied the last two governments.” He continues to say that “The detail of what is agreed will determine the extreme to which the bill takes politics out of the sector and tackles systemic corruption.”
Future sections of the Bill will address uncertainty over terms affecting taxation of upstream oil development.
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