Babaji Fowowe, a professor of Economics and a senior fellow at Agora Policy, has urged for amendments to the Petroleum Industry Act (PIA) to enhance petroleum revenue for the country. He asserts that after two years of the PIA’s implementation, it has failed to fulfill its primary objectives, leading to insufficient financial returns from Nigeria’s petroleum assets. In a report shared with Vanguard, Fowowe emphasizes that the PIA was intended to maximize financial benefits for the Federation, but current evidence indicates that this goal has not been met. He insists that key sections of the Act should be reviewed and revised to redirect more petroleum revenue to the Federation, which is crucial for addressing urgent expenditure needs.

Fowowe elaborates that the original goals of the PIA included attracting investments to the petroleum sector, improving the regulatory and business framework, and increasing revenue for the Federation. However, he argues that none of these aims have materialized as expected. He highlights a troubling trend: rather than attracting investment, there has been a notable departure of international oil companies (IOCs) from Nigeria’s market.

He suggests that the extensive and challenging process that led to the PIA’s enactment may have caused an overemphasis on its passage, diverting attention from its details and practical implementation. Despite this, Fowowe acknowledges the proactive measures taken by President Bola Tinubu, who has signed three Executive Orders aimed at improving the investment climate and enhancing the regulatory environment in Nigeria’s petroleum sector. These orders include initiatives like the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order for 2024, a Presidential Directive on Local Content Compliance, and a Directive aimed at reducing contracting costs and timelines within the sector.

However, Fowowe stresses that a critical aspect remains unaddressed: the revenue issue. He points out that after two years of implementing the PIA, the Federation has experienced a significant decline in revenues from the petroleum sector compared to the period before the Act was enacted. This decline underscores the urgent need for amendments to the PIA to better serve the financial interests of the Federation and facilitate necessary funding for key governmental expenditures.