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Energy sector non-profit NNRC, proposes reforms to tackle Covid-19 shocks

In the wake of the global coronavirus pandemic and the fall in oil demand hemorrhaging economies of oil producing countries including Nigeria, the Nigeria Natural Resource Charter ( NNRC), a nonprofit policy institute that implements the Natural Resource Charter (NRC), has canvassed for local solutions and sustainable, long-term interventions to get out of the current crises.

Tengi George-ikoli, program coordinator of NNRC, said the group’s position was informed by the gaps identified in its recently published Benchmarking Exercise Report (BER 2019) which x-rayed the state of the Nigerian petroleum sector, highlighting policy options to support the Nigerian government’s efforts to stimulate growth of the economy and its post covid-19 recovery.

The group is canvassing for maintaining peace and stability in the Niger Delta to sustain revenue flows from oil production. Sustaining beneficiation schemes by NDDC, MNDA and other interventions will support the governments stabilization efforts, the organisation said.

Read also: Coronavirus: Reps urge FG to give N15 billion intervention fund to 36 states

NNRC also advocates for improved coordination between federal and Niger Delta state governments on the response to the Covid-19 pandemic including the design and implementation of stimulus plans.

“Liberalize the downstream sector to allow market forces determine pump prices for petroleum and other products. This will ensure the availability of revenues necessary for more critical areas of the economy

“Improve the efficiency of the downstream oil sector by reviewing its policies, regulations and operational guidelines to ensure profitability, improved private sector participation and improved employment;

“Adopt and constitutionalize a savings mechanism with clear and transparent operational rules. This could be by retaining the more effective sovereign wealth fund (SWF) in the NSIA and transferring funds from the Excess Crude Account, the stabilization fund and other similar funds to the SWF. This will help fortify the Nigerian economy from oil price volatilities and other economic shocks. Ramping and prioritizing domestic gas-based industrialization projects, to diversify Nigeria’s energy supply, increase local employment and reduce domestic demand and

Nigeria’s reliance on oil;

“Support a major and urgent shift to gas in terms of investment focus. Gas supply to domestic market for power, industrial & manufacturing feedstock and enabler to economic development. Emphatic shift to the gas value chain offers Nigeria the leverage for socio-economic development in the medium to long term;

“Fast-track the passage of the petroleum industry bill to bring about the fiscal, governance and regulatory clarity required to monetize Nigeria’s 200+ tcf of gas reserves. Speedy passage of the Petroleum Industry Bill will provide a clearer strategic direction to the entire industry, re-engender trust, thereby increasing investments which will in turn increase national revenues required for development;

“Review the existing fiscal framework to ensure competitiveness and support Nigeria’s ability to attract investments into the upstream sector, effectively shoring up Nigeria’s diminished reserves;

“Institutionalize cost management strategies within the sector with the overall objective of reducing the high unit production cost of crude thereby improving governments revenue from the sector;

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