Oil theft causes Nigeria to lose N1.29trn in annual revenue — Speaker Abbas

On Wednesday, Hon. Tajudeen Abbas, the Speaker of the House of Representatives, voiced grave concerns regarding a research that said Nigeria’s widespread oil theft cost the country N1.29 trillion in lost income annually.

When the Special Committee on Oil Theft was established, Hon. Abbas voiced his concerns. Hon. Alhassan Ado-Doguwa, the committee’s chair, assigned the Special Committee the mission of identifying the “criminal elements sabotaging our nation.”

Hon. Abbas reiterates the 10th House’s resolve to address “one of the largest threats to Nigeria’s economy” while voicing displeasure over the impact of criminal activity on the country’s economy.

Nigeria is thought to lose more than 300,000 barrels of crude oil every day as a result of criminal activity, theft, and destruction. The proliferation of weapons, loss of money, environmental catastrophe, challenges to regional peace and security, and unfavourable investment climate are just a few of the dire repercussions of this.

According to reports, industrial-scale theft costs the country N1.29 trillion in lost oil income each year. As a result, the main goal of this committee is to identify the close and distant causes of oil theft and suggest corrective actions to the House.

A mix of declining earnings and soaring expenses is posing serious financial issues for Nigeria. It is worth noting that the projected income and expenses for 2023 are N9.73 trillion and N20.51 trillion, correspondingly. This translates to a N10.78 trillion budget deficit, or around 4.78% of GDP. We are faced with the difficult task of borrowing to close the gap because this deficit is the biggest in Nigerian history and the budget is more than twice as large as the planned revenue.

“The House will greatly increase the goals for all government entities that generate revenue because of this. These organisations have the potential to produce far more than they do now, in my opinion.

We have communicated to MDAs that they will be expected to do much more in 2024 from our primary revenue-generating agencies in our most recent engagement on the 2024–2026 MTEF. We anticipate that their yearly income profile will double overall. But in order to do this, these organisations need to increase efficiency, particularly in collecting, and decrease waste.

Furthermore, it is imperative for agencies that create money to maintain openness in the way they manage the earned funds. Allow me to make it very clear: The House will not put up with subpar agency performance or a refusal to provide documentation of necessary payments to the Federation Account. To guarantee compliance, we will strictly supervise and keep a close eye on all revenue-generating agencies’ operations.

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“Dear Colleagues, we established this Special Committee to reaffirm our steadfast dedication to safeguarding the country’s resources for the benefit of all citizens and to hold those responsible for these horrible crimes accountable.” I hereby give you the task of looking into every aspect of oil theft, paying particular attention to the activities of all parties involved, such as criminal gangs, militias, the local population, corporate personnel, and security organisations.

I implore the committee members to pursue their task with dedication, objectivity, urgency, and patriotism. Rather than being implemented on an as-needed basis, the conclusions and suggestions made by your work will form the basis for long-term fixes. Additionally, I anticipate that your actions will have a major positive impact on advancing sustainable growth and strengthening the integrity of our oil industry.

“In order for this Special Committee to carry out its task, I call on all stakeholders—including government agencies, business leaders, security agencies, civil society organisations, and the general public—to offer their complete cooperation. We can improve revenue, investment, and Nigeria’s overall socioeconomic advancement by successfully tackling this difficulty.

The Chairman of the Special Committee on Crude Oil Theft, Hon. Alhassan Ado-Doguwa, noted in his remarks that the House of Representatives has taken a significant and daring step to check and tame the tide of this regrettable development. The issue of crude oil theft is of national importance.

He acknowledged that the obstacles might seem insurmountable, but he was hopeful that the Committee could overcome them all and replace these narratives of suffering with ones of thriving affluence if the House leadership and Members showed the necessary political will.

According to data from the National Extractive Industries Transparency Initiative (NEITI) report 2021, Nigeria’s oil and gas industry generated 40.55% of government revenue, 72.26% of the country’s total exports and foreign exchange earnings, and 19,171 jobs.

“The country is yet to reap the full benefits of its abundant hydrocarbon resources because of oil theft and losses through pipeline vandalism, pipeline integrity issues, compromises, measurement errors, outright sabotage, and general insecurity in the oil producing communities, despite the oil and gas sector’s seemingly robust contribution to our national economy.

“Oil theft and pipeline vandalism are not new problems for us, nor are they limited to Nigeria. Nonetheless, they continue to pose a serious threat to the environment, our economy, and national security. It is imperative that we address these issues and strengthen our laws, technology, and security protocols.

“Oil theft is a significant illicit industry with a global market value of approximately $133 billion annually. This makes it the largest natural resource theft in history and the resource that is trafficked the most widely worldwide. According to the 2021 NEITI, Nigeria is predicted to have lost 643 million barrels of crude worth $48 billion due to theft between 2019 and 2021.

“A presidential inquiry panel’s most recent report confirms the microeconomic consequences of crude oil theft. According to the research, the country’s budgetary stability is at risk since oil theft and illegal bunkering have increased the amount of oil produced daily from 200,000 to 400,000 barrels at the beginning of these illegalities to over 800,000 barrels per day. The study also presented a horrifying possibility in which official receipts of all oil income into the Nigerian treasury would be surpassed by losses to oil thieves and leaks by officials.

“Such policies and initiatives have given rise to the Niger Delta Development Commission (NDDC), the Presidential Amnesty Programme, the Nigeria Content Development and Monitoring Board, the Host Community Development Trust, etc. as well as the 13% revenue for oil producing communities from the consolidated revenue of the federation,” the observer said.

In order to address some of the main causes of oil theft, it is crucial to assess the effectiveness of these government policies and initiatives and reinforce them as necessary. Furthermore, it is said that the majority of the recommendations made by earlier initiatives are piled up on shelves and ignored.

“I have high hopes that this committee, along with the leadership of the House, will revive all of those recommendations, reassess them in light of contemporary circumstances, and make sure that the pertinent ones are carried out in coordination with the appropriate Ministries, Departments, and Agencies of Government.”

Hon. Ado-Doguwa gave Nigerians the assurance that the Committee would involve all parties involved in the hydrocarbon value chain, enabling us to work together to start reversing the negative impacts of the illicit industries that steal oil and damage pipelines. Together, we will triumph, and stories about the country’s oil pipelines not being able to be used efficiently, breaches at flow stations, security breaches at loading and export terminals, and the risks associated with non-decommissioned and abandoned oil wells will start to fade.

In order to guarantee that the Committee fulfils its mandate, he urged the assistance and support of all parties involved in the oil and gas industry, the security sector, as well as all Nigerians and other nations who live and conduct business in Nigeria.