There is no doubt that the task ahead of President Muhammadu Buhari in the oil and gas sector would be enormous.
The cash-strapped government, with a rainy-day fund so depleted, which the immediate Past President of Nigeria, Goodluck Jonathan, left for the new administration, would mean that the new government would have to borrow to cover salaries as well as salvage the lean purse of running the government.
Most of the tasks, according to Abimbola Olashore of Lead Capital Plc, would involve rationalising overlapping and redundant ministries, departments and agencies (MDAs), in line with the Steve Oronsaye presidential committee report.
Olashore, a long-standing financial expert, noted that Nigeria’s oil sector was so dirty that to do the “surgical changes” needed would require a lot of work.
He told Daily Independent that the Buhari led Government was likely to relieve the Central Bank of Nigeria (CBN) of its role as developmental finance institution to enable it to focus on its core objectives.
Olashore also argued that the government in the past relies on oil sales for the bulk of its revenues but said that there had been little oversight on how these are handled.
He said there might likely be a tightening of the tax noose, but said there might be no expected tax increase as the Federal Internal Revenue Service (FIRS) would also likely be strengthened.
According to him, President Buhari has also made it clear that he wants to revamp Nigeria’s refining sector, which declined while the country became dependent on imports for fuel. “Subsidy on petroleum products would certainly go and the industry would be reformed as a matter of priority in order to attract new investments”
“There is urgent need for power transmission to be deregulated, regionalised and privatised in order to break down centralised transmission,” he said.
He added that Buhari may also likely devolve the ownership of mineral and mining resources to states in line with party’s manifesto.
On forecasts on variables relating to the business environment, Olashore said: “With a change of government, we do expect the rejuvenation of growth drivers which should have positive impact on economy as the key to economic growth rests on the diversification of the economy through the development of potentially growth areas.
“This is expected to be government led but driven by the private sector,” he said.
Meanwhile, there are indications that President Buhari might also be the head of the petroleum ministry to rid the sector of corruption.
According to reports by Reuters, sources close to Buhari were said to have revealed that the President was wary of trusting anyone else with the position.
The report noted that though Buhari has not released his proposed ministerial list, but his media aide, Garba Shehu, has urged Nigerians to be patient with the President as the process of choosing the cabinet is not one to be rushed.
Nigeria’s oil sector currently contributes over 80 per cent of the country’s revenue but is a “traditional fount of corruption” thus the country is robbed of much needed funds.
The President is not likely to be out of his depth as he has vast knowledge of the oil sector, having been head of the Petroleum Trust Fund under late Sani Abacha and oil minister under Olusegun Obasanjo.
Buhari would also not be the first Nigerian leader to take the step as Obasanjo did without a Petroleum Minister for most of the two terms he spent in office as a democratically elected President