Mr. President, truth is bitter but it will set us free. By Nuhu Ribadu

Below is the full text of the Chairman, Nuhu  Ribadu’s speech during the presentation of the report of the Petroleum Revenue Task Force to President Goodluck Jonathan on November 2nd.

Your Excellency, the President of the Federal Republic of Nigeria Dr Goodluck Ebele Jonathan GCFR

The Honourable Minister of Petroleum, Mrs Deziani Allison Madueke

Distinguished members of the Petroleum Revenue Special Task Force (PRSTF or the Task Force)

All protocols duly observed.

We are pleased with the opportunity to formally present the report of the PRSTF  to you. The constitution of the PRSTF and the other 3 committees by Mr President is a very bold challenge thrown to us members, we salute you for your courage. We have therefore this report for your consideration with the hope that you will accept and implement the recommendations therein. This step towards true reform in the petroleum ministry and the recommendations of the Task Force will strengthen the institutions responsible for Petroleum Revenue Management and over time increase revenue accruing to the Federation Account from the Petroleum Industry.

Permit me to express our sincere appreciation to the Honourable Minister of Petroleum for this initiative and support. We pray for her success in all the reforms excises she is undertaking.

Mr.  President, our assignment is essentially about enhancing government revenue, improving transparency, accountability and to help you fight corruption. Therefore, in the course of our assignment, our review was extensive, our findings were detailed and our recommendations were far reaching to address various issues covered in our terms of reference. Some of the recommendations may be tough to implement but we are convinced it is in the best interest of our people – a lot of times Mr. President, truth can be bitter but as the saying goes, it will set us free.

Recommendations:

We would like to briefly highlight the key points of the report. The recommendations are more about management. They can be implemented with or without the Petroleum Industry Bill (PIB) before the National Assembly.

1) To increase government revenue from the industry, the Federal Government needs to put in place a coherent financing solution that allows government fund its obligations under the JV contracts. Funding government obligations will unlock additional capital from its JV partners, which will over time increase government’s revenue from the proportionate additional barrels of crude oil produced, royalties on the entire production and taxes on taxable income.

2) The FGN should  take action and enforce collections of outstanding royalties amounting to billions of dollars from some of the oil companies operating in Nigeria. Mr. President, we want these companies to do business in our country but we also want them to give us our entitlements. They make a lot of profit here and they go and invest in other countries. The least they can do is to pay us the royalties, petroleum tax and penalties they owe.

3) Nigeria is the only country in the world that uses traders to sell its crude oil. The only other country that is doing so is Congo Brazzaville. We should not be comfortable in this neigbourhood. This practise is a rip off and therefore should be stopped.

4) Increasing  crude oil theft is a national tragedy with grave consequences and there is need for urgent action. That and general insecurity in the Niger Delta is denying us Foreign Direct Investment (FDI) in the industry. We have given some recommendations including Finger printing of Nigeria’s crude oil for us to be able to track stolen products.

5) DPR needs to be appropriately positioned to regulate the petroleum industry and collect government revenue due from royalties for oil and gas production, gas flare penalties.  DPR should be empowered to ensure the commencement of the fiscalisation of govt revenue from production and not sales as is the current practice

6) The Task force has recommended a comprehensive framework for automation of the industry for transparency and accountability and also fighting corruption at all levels in the industry. With corruption, nothing can be achieved. From my own experience, I want to tell you that if you are embarking on reforms, it must be with integrity otherwise it will fail.

7) We also recommend the  establishment of an independent office for the transformation of the industry for a fixed term with a specific mandate to implement the reforms accepted by the government based on the work of the various committees and task forces looking at the sector as well as other earlier reform initiatives in varying stages of implementation.

Once again, we would like to commend the government for this bold initiative and wish you all the success in the reform steps you are taking in the entire industry for the benefit of Nigerians.

God bless the Federal Republic of Nigeria.

Nuhu Ribadu

Abuja