Recalibrating job creation initiatives through sectoral reforms

Government’s reluctance to embark on needed reforms across sectors of the Nigerian economy is a major driver of unemployment in the country.

From the oil and gas sector to health, rail, water, and road transportation infrastructure, Nigeria indeed yearns for sweeping reforms that will infuse the needed powers and energies of youths into pushing Nigeria onto the path of sustainable development.
With the Petroleum Industry Bill (PIB) remaining un-passed in the last 11 years, coupled with the high-wired politics around it, investments are stifled while massive jobs are lost.

The Senior Partner, Energy and Commercial Contracts, Primera Africa Legal, Israel Aye, said while it is difficult to draw a direct linkage between job creation and the Petroleum Industry Governance Bill (PIGB) when passed, he posited that the operationalization of the bill will lead to a resurgence of investment that will result into the generation of massive indirect jobs.

He explained: “The point is that when the bill is passed, that in itself creates more certainty around the statutory and regulatory framework. That would then stimulate investment, which will then create massive economic activities that will also make hiring possible. What the petroleum sector is experiencing right now is a lack of investment. Investment has to do with confidence. In an oil and gas space where over $100 billion is required yearly globally, to maintain volume of growth, Nigeria is not a part of that spending. Why is this? It is because of that atmosphere of uncertainty that the non-passage of the four Petroleum Industry Bills has created. That is the thing. It is not that there is any provision in the bill that will create jobs directly, but the investment that will be stimulated when the bill is passed will create an atmosphere that will stimulate job generation initiatives.”

He added that if activities across the value chain are incentivised, unemployed youths would be engaged that will engender innovation in the system.
Aye gave an insight into why successive governments have failed the legislation thus: “What are the industry experts seeing that successive governments seem not to see? The collective view of the experts is that the bill ought to have been passed like 10 to 15 years ago. We needed this piece of legislation like air. Nigeria is passing through 11 years of under-investment in the industry. The hesitation is not just about this present government.
The one before this and the one before that one too did not show enough political will to pass the bill into law.

“While anyone can speculate the reason for nonchalant attitude of successive governments, it seems to me to be lack of political will and unwillingness to put economic considerations, perhaps, ahead of any other consideration. It seems to me also that successive governments worried more about control of the industry than reforming it for the common good. For instance, the PIGB proposes amongst other recommendations, the emergence of a super-regulator, which will undoubtedly take most of the discretionary powers away from the Minister of Petroleum Resources. I think this is a major dilemma especially on the part of those that currently wield that power. Even the reform of the Nigerian National Petroleum Corporation (NNPC) would be a threat to some people who see it as a route to huge resources of the Nigerian state. That is perhaps the reason they prefer to maintain control rather than go through a reform that will reform their powers into near nothingness.”

Aye also dispelled fears expressed by industry labour unions that a reform of the sector is likely to lead to massive loss of jobs.
His explanation: “This claim is disingenuous. I say this because the reform indicates grossly under-resourced regulatory bodies in both the Department of Petroleum Resources (DPR), and Petroleum Products Pricing Regulatory Agency (PPPRA). So, the proposal in the new bill is that the people in DPR and PPPRA would constitute the initial staff strength of the new super regulator. The roles would be refined along the way, and of course, more persons would be brought on board to bolster the expansion of the regulatory body. I think what is being expressed is the fear of change that might affect their power and privileges.”
On his part, Director, Emerald Energy Institute, University of Port Harcourt, Prof Wumi Iledare, said the overall objective of the bill is to enthrone transparency and accountability, which could engender a transparent recruitment of competent workforce.

He explained: “The main objective of the bill is the maximisation of the value chain. Before now, Nigeria has put more attention to the exploration and production component. Now, we are seeing that the midstream and downstream are equally important. If the bill is passed, the governance of the midstream and downstream would not have any overlap because only one body would be responsible for the regulatory framework within the value chain that will equally make interconnectivity possible and seamless. What this would do is to make regulation effective and less hindrance to investment, and less transaction costs.”

Iledare argued that a governance structure that is independent of political interference would be able to effectively design fiscal terms and create conducive atmosphere that will enable businesses to thrive.

He also decried high number of leases that are in limbo because they were awarded based on political affiliation to people that did not have technical capabilities to operate them.

He argued that the leases would have generated massive jobs for Nigerians if they were duly awarded, saying, “this would have created multiplier effect for the service sector that would have more than enough to do. When we think about the jobs that can be generated from the oil and gas sector, we should look at other things that can happen beyond the sector itself. The oil and gas sector can enable and empower economic activities beyond what happens in the sector directly. This is what the reform can deliver.”

He submitted that the reform of the oil and gas sector in line with that of the Central Bank of Nigeria (CBN), would make recruitment of qualified personnel possible.

“The reform will allow the system to recruit competent people who are roaming the streets without jobs. Now the NNPC is advertising for vacancies. Can you imagine if we have a regulatory framework put in place by the Central Bank of Nigeria (CBN) in respect of how it manages the banking sector? There are so many Engineers working in the banks because the sector is well regulated with uncertainty removed. That is what is needed in the oil and gas industry,” he stated.

Prof Iledare warned that Nigeria may be left behind if she does not integrate her young population into the oil and gas industry.

Again, he said: “The industry is now more than ever before relying on data and innovation to make final investment decision. It is only young people that have information technology brains that can make this becomes a reality in Nigeria. But we need a system that will allow easy migration of these people into our work force. Only a transparent recruitment that is anchored on a reformed oil and gas sector can make this possible. That is what the new petroleum industry bills are out to achieve.”

He dispelled the argument that a reform of the industry will lead to redundancy of workers.
He said: “That the reform will lead to massive sack is an unfair assessment of the PIGB. The regulatory commission is not DPR-transformed. It is DPR in combination with PPPRA. The question to question to ask is how many workers in the agencies are actually adding value to the system? The problem with us as Nigerians is that we are only concerned about ‘now’. Very few of us are concerned about ‘tomorrow’. What happened next?”
Iledare pointed out that the humanitarian crises in Venezuela are a lesson for Nigeria to learn from.

He warned: “Venezuela is a lesson for us to learn from. The Venezuela experience today is as a result of refusal to reform enough when the signals were coming and very loud. The amount of money Nigeria is spending on fuel subsidy does not make any sense at all for a country that runs a mono-economy. In fact, if the staffers in the PPPRA will sit down to analyse their situation, their futures are more threatened by an industry that is not reformed. The reformation of the industry is actually very central to their collective survival.”

While assuring that no worker would be laid off when the PIGB is passed, Prof Iledare urged industry operators and the unions to take self-survival strategies out of the equation and look out for the wellbeing of the Nigerian state.