PIB Host Community Fund: Individual Prosperity without a Collective Posterity is Inconsequential- Prof. Iledare

The petroleum industry has been worse hit by Covid-19 pandemic causing a crash in oil price, however, stakeholders and operators in the industry believe that it provides opportunity for Nigeria to strategise and move forward.

Speaking to journalists during the 13th Nigeria Association for Energy Economics (NAEE) at Abuja, Professor Wumi Iledare and immediate past president of NAEE said, Nigeria has an advantage in gas as transition fuel and commended the Federal Government for its gas expansion programme. The country needs to produce its resources domestically.

The Petroleum Host Community Bill which the Niger Delta people are agitating because their interests are not taken into consideration, the Professor of Petroleum Energy Economics was of the view that individual interest without collective posterity is inconsequential.

On the aspect of capacity building, he extolled the Petroleum Technology Development Fund (PTDF) for enhancing capacity building through education and training in universities across the globe.


What should the country be focusing on after Covid-19?

Covid-19 pandemic has come and we are not out of it yet, what I will suggest is that as a nation, Nigeria needs strategic thinking going forward. There is a window of opportunity for the country to be able to use her resources in anticipation of the end of Covid-19 and move towards a zero-emission fuel.

Nigeria is fortunate because the transition fuel is natural gas and it has it in abundance. Unfortunately, the funding required to develop natural gas is enormous, this is why some stakeholders in the industry are of the opinion that the Petroleum Industry Bill (PIB) must be such that find a way to encourage natural gas development.

In fact, some stakeholders and industry operators are suggesting a suspension of royalty for natural gas and a suspension of Nigeria hydro carbon for natural gas as well such that the country should not put it at zero so that we don’t make the mistake that was made in Production Sharing Contract (PSC) in 1993. The current government should take advantage of some of the opportunities available with respect to gas development.

If Nigeria has listened to some of the warnings industry operators gave in 2013, with respect to shale oil development why the country should think in terms of domesticating the use of its petroleum resources by moving away from producing oil and gas for revenue but producing it for energy consumption and per capita energy consumption expansion.

I really want to commend the current government with the expansion of natural gas but these are some of the things that Covid-19 has imposed on us and we need to be thinking differently and move away from ad-hoc approach to solve energy problems through strategic thinking. Nigeria cannot isolate itself and protect its territory, there must be interdependence in policy formulation.

Covid-19 has given us opportunity to think and Nigeria has the time frame to adjust its way of thinking. The train is already moving and we must enter when it comes to energy transition dynamics. The country is fortunate to have gas as a transition fuel.

You are advising for the removal of tax and royalty at a time that the country needs revenue to drive growth. Don’t you think this is basically a long-time issue that will lead to revenue shortfall which the country is currently facing?

To be objective, the government pursuant of revenue has not actually grow Nigeria’s economy. Right now, oil and gas contribute just about 9% of the gross domestic product far less than what agriculture contributes. So, we should understand that posterity requires current discipline with the way it is pursued.

The revenue generation objectives from natural resources have not grown. In fact, it has led to more indiscipline fiscally and elitist way of life. If we are able to think in terms of using natural resources to grow the economy, the economic impact is significant. The first thing to think about natural gas is the intensive use of the energy industry and how to build it around where those resources are. There must be secondary energy intensive industry that feeds more on feedstock. The government must think in terms of readjusting the way it makes money which is through tax and mandates everybody to pay the actual tax, then expanding the economy with it.

If Nigeria continues to produce its natural resources for revenue, it will create millionaires, but it will in turn creates energy and income poverty. Using the country’s resources domestically is the way going forward and it requires strategic thinking not ad-hoc.

On the issue of Niger Delta interest on Petroleum Industry Bill (PIB), the indigenes are saying the bill cannot fly if their interests are undermined. What’s your opinion about it?

I spoke recently to the Niger Delta community, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) including the host communities’ representatives on the issue of the bill.

There are four components to the PIB. First, is the governance, second, is the administration, third is the Host Community Fund and the fourth is on the fiscal aspect.

There are two of them that are critical because of the stakeholders involved, the host community and International Oil Companies in terms of fiscal. There is a frame work that is still being worked on which is the host community fund concept and it requires a truly defined host community. We need to know who are the real host communities. The impacted petroleum community aspect has been taken away from the bill because that creates a different lacuna.

If am to advise the host community, it is simple, they must understand that individual prosperity without a collective posterity is inconsequential. Good number of people have become millionaires as a result of federal government’s intervention in the Niger Delta, yet poverty has increased in the region.

The new thinking in the PIB is to introduce Host Petroleum Community Guide and how to develop the Niger Delta which is the idea of host community fund. What we want to pay attention to is not the membership of the settlers, but to have an advisory group within each community that will use the fund to meet the society’s need.

The difference between the host community fund and Niger Delta Development Commission (NDDC) is derivation. How the money should be used is clearly defined in the host community chapter of the Petroleum Industry Bill 2020.

Another major issue is how to fund host community fund without putting additional burden on the federation account and the IOCs. We must come to the realization that the future is a lot more important than the present. We have to adjust our thinking not only to meet the needs of current situation within the host community or else the fighting and agitation will persist. Contemporary solution to problems must be by the current generation for the future.

What we have in the host community fund right now is still in a workable format but there is a legal framework for those communities and the funding for it requires adjustments not to put additional burden on the federation account as well as the IOCs.

You spoke about capacity building; can you still explain on it vis-à-vis the role of capacity building in places like PTDF in post Covid-19. What has PTDF done?

I have been friend of PTDF since 2001 so whatever I say about PTDF is to bring the best out of it and not to criticize the orgnisation. I still believe that the PTDF will do better in terms of spending money for local university that is comparable to what they have spent on foreign university. Everybody wants to travel abroad to study but capacity building and structural content have more significant value at formative stage.

I will continue to advocate for the Executive Secretary of PTDF to think in terms of capacity. I was in University of Port Harcourt in Rivers state for six years and I graduated so many PhDs and Masters of Science in Petroleum and Energy Economics that is comparable to anywhere in the world.

But there is a problem and PTDF can help solve it by making sure that it assists universities to desist from ethnicising the system. The universities in Nigeria are ethnicised in administration, faculty, staff and in students. PTDF can begin to give scholarship to students and send them to other parts of the country.

PTDF can have a framework to give scholarship to students from north west and send them to universities in south west. It could give scholarship to students from south-south and send them to universities in the north. The same thing is applicable to those in the north east and they could be sent to south east of Nigeria. There are cluster funded students as it is done in places like Aberdeen in Scotland, China and Europe. Clusters of PTDF scholars in each of the universities across the world. In fact, PTDF is doing a good job in terms of capacity building.

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