Oil reform bill which has been in draft the last 20 years will soon be presented to the President Buhari by the oil minister in Nigeria according to Reuters Africa. The law that governs the oil sectors in Nigeria hasn’t changed since the 1960s. Low oil prices appear to make a reform urgent.
The competition that stems from the rise in renewable energy hasn’t made any easy either, keeping potential oil investors off. Top oil companies are also responding to economic fluctuations in severity as Chevron, Total and ExxonMobil sell off their Nigerian assets.
The oil reform bill if signed will offer options for the attraction of oil investment and boosting output in Nigeria.
What’s in the oil reform bill?
Sources that were not named by Reuters said that the bill is a four-chapter document. Without much specifics as Reuters said, the reform bill targets an increase in the amount of money local communities receive from companies for environmental cleanups.
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Parts of the reform bill also touches on the resolution process between companies and the government. More so, the bill provides is a structure for gas tariffs and delivery as well as government measures that target the development of gas discoveries by companies.
The draft will go to the National Assembly after President Buhari signs it.
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World Bank: Reform Holds Back $1.5 Billion Loan From Nigeria
As concerns for multiple exchange rate in Nigeria linger, the country is now less likely to get the proposed $1.5 billion loan from the World Bank in August Reuters Africa said.
The loan was supposed to be forwarded for approval to the World Bank board this August. However, it has been reported that Nigeria is failing to meet the negotiation terms.
Sources from the government who talked to Reuter said that “The World Bank is not convinced about the reforms,” citing the currency as the core issue.
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Having said that Nigeria is headed for an economic disaster, the World Bank also loans money pegged to certain requirements. The CBN governor indulged the World Bank when it pledged to unify the exchange rates. This led to the devaluation of the naira twice this year.
That, however, isn’t enough to convince the World Bank according to Reuters who wants full reform of the naira policy. The sources also cite insufficient transparency in the elimination of fuel subsidies as one of the reasons the World Bank hasn’t approved the proposed $1.5 billion loan to Nigeria. Reuters said that a banking source mentioned that loan could wait until October.
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