Despite generating over $1 trillion in oil revenue in the last four decades, Nigeria’s oil and gas sector remains plagued by inefficiencies, costing the country dearly. Renowned lawyer Dr. Olisa Agbakoba SAN has sounded the alarm, highlighting the sector’s paradoxical failure to drive economic growth and national development.
According to Dr. Agbakoba’s policy paper, “The Paradox of Nigeria’s Oil and Gas Industry,” the country’s inability to effectively manage its resources has led to significant missed opportunities. Nigeria loses billions annually to foreign firms dominating key sectors such as legal services, shipping, banking, and insurance. Specifically, the country forfeits over $1 billion annually in legal work to foreign firms and fails to engage Nigerian shipping companies for crude oil transport.
Dr. Agbakoba identifies four critical areas requiring comprehensive reform. First, he advocates for stricter enforcement of local content laws to increase Nigerian participation from 30% to 70% within the next decade. Second, he urges strengthening regulations and penalties to recover ₦3 trillion annually lost to tax avoidance by oil rig companies. Third, Dr. Agbakoba calls for the full privatization of the Nigerian National Petroleum Company (NNPC) to separate regulatory and operational roles. Finally, he stresses the need for standardized contracts prioritizing Nigerian interests and ensuring technology transfer.
“The Nigerian Oil and Gas Industry Content Development Act must be fully enforced to ensure that Nigerian companies benefit from our own natural resources,” Dr. Agbakoba emphasized. “The time for transformational change in the oil and gas sector is now. Our resources must work for the benefit of Nigerians, and it is only through comprehensive reforms that we can realize the sector’s full potential for economic growth, job creation, and national development.”
With Nigeria’s public debt soaring to ₦121.67 trillion as of March 31, 2024, Dr. Agbakoba’s call to action couldn’t be more timely. Will the country heed his warning and embark on the necessary reforms to revitalize its oil and gas sector? The future of Nigeria’s economic development hangs in the balance.
