Following reports of the loss of millions of naira to oil theft and the attendant economic sabotage, Nigeria’s House of Representatives has inaugurated a Special Committee to investigate the matter.
The Speaker of the House of Representatives, Tajudeen Abbas, while inaugurating the committee in Abuja, said that it was yet another indication of the House’s resolve, to tackle one of the largest threats to Nigeria’s economy.
“It is estimated that Nigeria loses over 300,000 barrels of crude oil per day due to theft, vandalism, and other criminal activities. The nation is reported to incur losses of oil revenues estimated at N1.29 trillion annually due to industrial-scale theft. Therefore, this committee’s primary objective is to determine the proximate and remote causes of oil theft and recommend remedial measures to the House. Honourable colleagues, Nigeria is facing significant financial challenges due to a combination of rising expenditures and falling revenues. You may recall that the proposed revenue and expenditure for 2023 stand at N9.73 trillion and N20.51 trillion, respectively. This means a fiscal deficit of N10.78 trillion, which is about 4.78% of the GDP. This deficit is the largest in Nigeria’s history, and with a budget more than double the proposed revenue, we are faced with the challenge of borrowing to cover the gap”. The Speaker said.
He also said that the House was going to raise the revenue-generating bar for MDAs.
“It is for this reason that the House will significantly raise the targets for all government revenue-generating agencies. I am convinced these agencies can generate much more than they currently do. In our recent engagement with MDAs on the 2024-2026 MTEF, we have made it clear that a lot more will be required of our key revenue-generating agencies in 2024. We expect them to double their total annual revenue profile. However, to achieve this, these agencies must reduce wastage and improve efficiency, especially in collection”.
He noted that revenue-generating agencies must ensure transparency in the management of generated revenues as the House would not tolerate low performance by agencies or failure to show evidence of required remittances to the Federation Account.
“We shall also closely monitor and undertake strict oversight of the activities of all revenue-generating agencies to ensure compliance. We set up this Special Committee to underscore our unwavering commitment to protect the nation’s resources for the good of all our citizens and to punish the perpetrators of these dreadful crimes. I charge you, therefore, to investigate all dimensions of oil theft, focusing on the actions of all actors, including criminal gangs, militia groups, the local populace, company employees and security agencies.”
He urged the members of the committee to approach their mandate with diligence, objectivity, a sense of urgency and patriotism.
“The findings and recommendations from your work will serve as a foundation for sustainable solutions rather than ad-hoc measures. I also expect your efforts to contribute significantly to enhancing the integrity of our oil sector and promoting sustainable development”. The Speaker said.
The Chairman, Special Committee On Crude Oil Theft House Of Representatives Alhassan Ado Doguwa, said that the issue of crude oil theft is of significant national importance and the House of Representatives has taken an important and bold step to check and tame the tide of this unfortunate development.
“Available record from National Extractive Industries Transparency
Initiative (NEITI) report 2021 indicates that the Oil and Gas sector accounted for 72.26% of Nigeria’s total export and Government foreign exchange, 40.55% of government revenue and provided 19,171 jobs.
Despite the seemingly robust contribution of the oil and gas sector to our national economy, the country is yet to derive maximum benefits from its abundant hydrocarbon resources due to oil theft and losses through pipeline vandalization, pipeline integrity issues, compromises, measurement inaccuracies, outright sabotage and general insecurity in the oil producing communities”. Doguwa said.
He said that the issues of oil theft and pipeline vandalisation are not new to Nigeria nor are they exclusive to Nigeria.
“However they remain persistent threats to our economy, environment and national security.
The urgency of addressing these challenges and bolstering our regulations, technology and security measures cannot be overstated.
Oil theft is large scale illegal business estimated to be worth $133 billion per year globally. This makes it the world’s biggest theft of a natural resource and is also considered to be the number one most smuggled natural resource globally. From the 2021 NEITI, It is estimated that between 2019 – 2021 Nigeria lost 643 million barrels of crude amounting to $48 billion as a result of theft
A recent report by a presidential investigative panel affirms the apparent micro-economic impact of crude oil theft. The report states that with oil theft and illegal bunkering taking as much as 200,000 to 400,000 barrels per day of the country’s oil production at the onset of these illegalities to now more than 800,000 barrels per day, the country’s fiscal stability is therefore threatened. The report further painted a frightening scenario where losses to oil thieves and official leakages could overtake official receipts of all oil revenues into the Nigerian treasury.”
Mr Speaker, honourable colleagues, the challenges may appear enormous but with the political will of the House leadership, Members and this committee we can surmount them and re write these tales of woes to that of blossoming prosperity.
“I am aware of the various efforts of past leaderships of the country to address the root and immediate causes of this malaise. These efforts have led to the establishment of various panels and committees which resulted to various outstanding recommendations. Consequently, the Government came up with several programmes, initiatives and legislations aimed at addressing issues raised by the various panels and committees.” Doguwa noted.
He also said that he was optimistic that with the inauguration of the committee and with the support of the House leadership the committee will dust off all the recommendations, reevaluate them in line with current realities and ensure and monitor the Implementations of relevant ones in collaboration with relevant Ministries, Departments and Agencies of Government.
The Lawmaker assured Nigerians that the committee would engage stakeholders in the entire hydrocarbon value chain so that together it will begin to roll back the evil effects of the criminal enterprise of oil theft and pipeline vandalism.
He therefore implored the cooperation and support of every stakeholder in the oil and gas sector, the security sector and indeed every Nigerian and other nationals residing and doing business in Nigeria so that the committee delivers on the mandate given to it by the House.
The Committee is made up of all chairmen of committees in the oil and gas industry.
