In order to reduce sharp practices in the oil and gas sector, the President, Nigeria Stock Exchange and Chairman, WAPIC Insurance, Mr. Aigboje Aig Imoukhede, has insisted that a reform should be carried out in the sector that will lead to development where people set up refineries, create new technologies for production and employing hundreds of thousands through the value chain.
Speaking at the Petroleum Club Annual Guarantors’ Dinner recently in Lagos, he stated the oil and gas sector compels wealth through arbitrary means. With the topic: ‘A new role for petroleum industry in the Nigerian Economy’, he stated that ‘in 2011, Nigeria paid over two trillion naira in fuel subsidy.
Over one trillion naira of this payment was fraudulent. Let us assume we mobilize three hundred oil and gas entrepreneurs and gave them that one trillion naira to develop the sector and pay back, I cannot imagine what the developmental impact it would have made. In the interest of this nation, we have to get government out of operating in the oil and gas sector.
Speaking further, he said ‘sustained economic development is premise on the country’s ability to channel investment and entrepreneurial development into sectors where operators create values by producing goods and services at a cost that consumers are prepared to pay for, but more importantly at a cost lower than their counterparts In foreign countries. Nigeria will never see development if this continues.
On the solution, he said ‘the first step is that we must drastically reduce corruption in the oil and gas sector. The perception in the industry is that operators perennially have to contend with corruption.
The industry requires a paradigm shift. We want a sustainable oil and gas sector founded on a system whereby great men and women can run great companies like anywhere in the developed world. A few of you need to step forward and lead this process.
The goal is not to eliminate corruption, but to reduce it. You can make the sector to have standards that will determine how it would be run. It may sound tough and some of you may even have to take risk. Another issue is improving the quality of regulation and policy.
Petroleum Industry bill is important here. If it is passed, it will enhance the deregulation and privatization of the oil and gas sector.
The reason why Nigerian banks are doing well is because the industry was reformed. It introduced competition and level the playing field. For instance, Access Bank today has branches in China and Dubai. Industrialization through local participation is also fundamental. No nation industrializes because foreign nations choose to do so.