With PIB signed into PIA, would the economy improve?

By Sunny Chuba  Nwachukwu, PhD

The mindset of those managing the economy, if not in consonance with the aims and objectives of the Petroleum Industrial Act (PIA), will not lead to significant change in the economy. The PIA now has to direct the key players in the oil sector on the key changes under ‘Governance and Institutions’, to ensure good governance and accountability; creation of a commercially oriented national petroleum company; and foster a conducive business environment for petroleum operations.

Everything lies in the hands of those responsible, to run the business transparently, with dedicated efforts and patriotic accountability; something the economy has lacked, and thus suffered from in the past, and is still experiencing, with the attendant hurting and annoying leakages that ought not to be.

“Poverty is not an accident. Like slavery and apartheid, it is man-made and can be removed by the actions of human beings,” Nelson Mandela once said. This social malaise has presently become a global reference ascription to Nigeria’s economic status, as the “world’s poverty capital.” This statement of fact is based on the nation’s poor performance in productivity, the ratio of the Gross Domestic Product (GDP) rate over the population. It is, indeed, very ridiculous that the country is wallowing in abject poverty yet, in the midst of plenty. Consider the rich natural endowments (the abundant natural resources, various types of mineral deposits); too numerous to mention.

In just under a forty-year period, Kigali, Rwanda which in 1984 was a dungeon, has been transformed beyond imagination by the President Paul Kagame (under twenty years of leadership). In the same manner, why can’t Nigeria work?

Let us now hope that the new business structure of the national oil company (NOC) as a ‘company’, a purely business venture established, with the aim to make profit, works. The new business entity now called the Nigerian National Petroleum Company, should not continue in the past ways of deficit balances of the annoying financial declarations by the old NNPC (the Corporation). This time around, it ought to be “profit oriented” operations and commendable marketing performances, every month. No longer should we be saddled with the posting losses of hundreds of billions every month! Decisions taken by the top management should primarily and specifically focus on financial prudence, transparent management and fiduciary accountability, on every business opportunity taken (or moves made) in a responsible way, in the interest of the state.

We are sure (without doubt) that those personalities manning the affairs of the nation’s cash-cow institutions (governmental agencies at the federal level) have capacity and are knowledgeable public officers in the field of business, and are well able and fit to handle things as they should be. All we are pleading for, or doing here, is to encourage them to eschew obfuscation in policies that bother on all known government expenditures, whenever they have to make decisions (especially on capital projects) because integrity matters a lot.

By such a posture, corrupt tendencies by few individuals that may ambitiously put their personal needs and interests first before that of the state or national economy, would be reduced to the barest minimum. We, therefore, plead and urge all of them in leadership positions, to rethink and consider the reasons why they are providentially positioned in their respective positions, to sincerely recognise it as a call for service to humanity; so that this failing economy could be rebuilt.

The oil industry alone, being modest in one’s economic projections, without the inclusion of the likes of agribusiness opportunities that abound, or the intellectual property, the creative arts and hot/steaming brains of the teeming youngsters in various fields of entertainment industry and information technology, having remained the major source of foreign exchange earnings for decades, is significantly influential in whichever direction the national Economy flows. As for the aspect of rising interest in alternative energy sources (cleaner energy), due to global warming resulting from carbon emissions, fossil fuels will still be relevant in the world’s energy mix and economic calculations (no matter what), for at least another four decades. Even the nation’s known crude oil reserves will last for as much as those decades.

Let the nation’s players and actors in that sector actively participate more now, and take the implementation of the signed PIA seriously, though, subject to future amendments as it is currently being criticised by many close watchers and opinion moulders in the oil industry. Whenever upstream exports decline from falling demands by our international trading partners, the downstream should automatically switch on and take over completely, through an in-country value added operation and take the centre stage in the business provisions of finished goods (petroleum products), which has much higher financial benefits to the economy.

This vision ought to be clearly addressed now, as the new business management structures are fully put in place; where the intangible assets (provisions of security in the system, principled application of law and order in the organisational behaviour and governance; where impunity must not find footing in the corporate policy guidelines). These should properly aid the desired economic emancipation to thrive and be fully operational, towards economic revival and recovery, of an improved national economy.

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Sunny Nwachukwu,PhD, a pure and applied chemist with an MBA  in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on +234 803 318 2105 (text only) or schubltd@yahoo.com