Thursday, May 6th 2021 4:04 AM

Market Digest Nigeria


NDDC should be scrapped -KPMG analyst


An analyst with KPMG, Wale Ajayi, has advocated for the scrapping of the Niger Delta Development Commission (NDDC), and the open allocation of oil blocks by the Federal Government.

Tax, Regulatory and People’s Services at KPMG, made the call following the proposed establishment of a Petroleum Host Community Fund embedded in the Petroleum Industry Bill (PIB) currently at the National Assembly.

Ajayi who was a guest on a television programme, Global Business Report on Arise TV Network, on Tuesday, said the PIB has made provision for a competitive bidding process for the allocation of oil blocks, and as such, the government should stop the discretionary allocation of oil blocks in the country.

He further advised lawmakers and the federal government against “producing a new petroleum law in form of the PIB that will further stifle investments in the nation’s oil and gas industry,” adding that since the PIB has made provision for the establishment of host community fund, the relevance and continued stay of the NDDC had been generating questions among industry stakeholders.

“The question everybody has been asking is: what’s the continued relevance of the NDDC? Every operator in the sector contributes three per cent of their budget to NDDC and unfortunately for NDDC, they have been in the news in recent time for the wrong reasons.

“And then, we then have the Petroleum Host Community Fund in the PIB where oil companies are meant to contribute 2.5 per cent of their OPEX to the Petroleum Host Community.

“The question is: why do we still have to keep NDDC? And that’s the question that people are going to be asking at the public hearing.

“Because as far as I am concerned, it is better to leave the Petroleum Host Community Fund to actually cater for the interest of people in those communities and transform them to what they should be.”

While tasking the federal government on the need to be open while allocating oil blocks to bidders, Ajayi said the competitive bidding provision proposed in the PIB was supposed to end that.

“One of the issues has always been the power of the president to give discretionary blocks to people, like we did in the early 90s. So we have a provision in the PIB that says no, it has to be competitive.

“But you know, at the end of the day, it’s not so much about what the law says, it’s what we do that really matters.

“There are provisions that are supposed to govern how things are supposed to be done and the process that you need to go through.

“So, I wish I could say that we see an end to this discretionary allocation of oil blocks.”

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top
Get the best of Market Digest Nigeria financial news
delivered to your inbox daily!
By clicking Give it a try, I hereby: Agree and Consent to the Terms of Use and the Privacy Policy
& I may receive free newsletters & promotions from this site and can choose to unsubscribe anytime.