Pre-1999, there were three strongholds of government control in Nigerian economy which worked for the interest of public servants and political leaders, rather than for Nigerians. These three strongholds were; Telecommunications, Power (almighty NEPA) and then Oil and Gas (Supreme).
Since the advent of democratic governance in Nigeria in 1999, the government has been breaking down these strongholds of government control.
The Obasanjo government, which was in power from 1999 to 2007, broke the government’s control of Nigerian telecom sector and initiated the process of giving up control of the power sector.
The Shehu Musa Yar Adua presidency was a bit shy about breaking down government control and actually grabbed back some of those controls. The government reversed the planned unbundling of the Power Holding Company of Nigeria (PHCN) and also reversed the sale of the refineries done under Obasanjo.
But the Goodluck Jonathan administration bought into the privatization agenda of the Obasanjo era and moved fast to conclude the privatization of the power sector. His attempt to deregulate the downstream sector of the oil and gas industry was resisted by Nigerians led by labour.
Also attempts to restructure the upstream end of the oil and gas industry through the Petroleum Industry Bill (PIB) failed because of the reluctance of the national assembly to pass the bill, egged on by resistance from the oil majors which felt the fiscal terms and conditions contained in the proposed bill will not favour their interest.
So now Buhari is saddled with the responsibility breaking the last stronghold of government power in Nigeria. Reforming Nigeria’s oil and gas sector, reducing government control and getting in private sector management and investment, is perhaps the last frontier of trying to jumpstart the Nigerian economy. It is almost the last missing link in Nigeria’s economic reforms and perhaps the most challenging because of the entrenched power interests that have enjoyed the unearned rents in the sector for years.
The labour unions in the oil and gas sector are very powerful and Buhari will need all the political will he can muster to push the much needed reforms in the sector. But that is why he is a General. Generals are meant to go to war and this is one war Buhari must win and earn the credit of being the president that broke the last stronghold of government control in the economy and finally set the economy on a path of growth.
There is no better time to do that than now when private sector creativity and management is most needed to help Nigeria navigate a turbulent future in the oil and gas industry.
