Buhari advised by Transition Committee to set up joint Energy Ministry for oil, gas and power
A reform proposal document of a ‘transition committee’ set up by Nigerian President Muhammadu Buhari has recommended a massive overhaul of Africa’s biggest oil industry and increased borrowing to help pay off $20 billion of government arrears in the form of salaries and subsidies, Reuters reports.
Among the committee’s recommendations were slashing the size of the civil service, overhauling the much-criticized NNPC and removing costly petrol and kerosene subsidies, according to an executive summary obtained by Reuters. It also said Buhari should appoint a “Reform Czar” within the president’s office to oversee the changes.
The committee recommends paying salary arrears and fuel subsidies immediately to avoid “mass labor unrest”. Paying government arrears should be funded by issuing 600 billion naira in bonds, restructuring existing debt and renegotiating or scrapping some government contracts.
It recommends cutting costs by slashing the number of government ministries to 19 from 28 and removing “top-heavy appointments” within the presidency. Part of the streamlining would also include establishing a new ministry of energy to oversee power and oil and gas, a merger that would create a powerful and important portfolio.
Contracts between NNPC and oil firms and fuel traders should be reviewed as well, the committee suggested. Buhari dissolved NNPC’s board last month, pledging to purge corruption.
The committee also recommends passing an old version of the Petroleum Industry Bill (PIB), which includes creating incorporated joint ventures between oil majors and NNPC, a policy strongly opposed by foreign oil firms. The committee also said that amnesty for former Niger Delta militants should be extended for another year.
Source: Energy Mix Report