The House of Representatives downstream committee has faulted the call for the removal of the Chief Executive Officer of the Nigeria Midstream Downstream Regulatory Authority (NMDPRA), Alhaji Ahmed Farouk, arguing that such a stance violates the Petroleum Industry Act (PIA).
The committee, at its special session presided over by Chairman Ikenga Imo Ugochinyere, emphasised the need for stability in the NMPRA, as provided for in Section 41 of the 2021 Act.
Ugochinyere further dismissed the call because the National Assembly made the PIA and put in clauses for obtaining tenure security to help inspire investors’ confidence, policy consistency, and ensure stability for a specific period after which the President reserves the right to extend the appointment or allow the occupant to exit after completing the first term.
The Imo-born lawmaker argued that after reviewing some of the complaints and issues raised against Farouk and the board of the NMDPRA, he saw no reason for the committee to support such a call, as the issues raised are not rooted in the effectiveness of the regulatory agencies but are about a desire for a change of leadership.
The committee strongly believes that, over the last few years, since the establishment of PIA, there has been significant progress in both the downstream and upstream sectors, particularly in restoring investors’ confidence and attracting a fresh inflow of investment funds into the downstream sector, amounting to billions of dollars.
“We made the PIA for a reason, and we cannot join in asking for the violation of the PIA, thereby destroying the decades of work on the PIA. The Parliament worked so hard to create this magnificent legislation,” he said.
“The building of investors’ confidence, building of clarity, building of transparency, and building of processes are key gains we are seeing today. The committee is not saying that investigating agency should not diligently carry out it’s function or prosecute any person found to have breached the law but the committee is completely against any idea that the PIA provisions can be dustbined and it’s provision ignored and that a regulatory body leader can be removed without due process and that once that culture is back, then it will send a wrong signal to the international committee of investors in the petroleum sectors to now feel that it is risky investing in a country where respect to the law can’t be guaranteed.
“So, on that ground, the committee is dismissing those calls as not being in line with relevant provisions of the PIA, which has physically made provisions for tenure duration. Also, the allegations about the budget of the agency are ridiculous because some of those allegations were way above the entire capital provision in the budget. So, if an amount that is alleged to have been misappropriated is above the budget capital provision, how could you have said someone stole what was not even existing?
“More importantly, the agency, especially the NMDPRA, is running at a deficit, finding it difficult to have resources to pay salaries and has not even done recruitment in the last six to seven years because of the financial challenges and difficulties they are facing.
“More importantly, since the advent of the PIA, the two regulatory bodies, which are the NMDPRA and NUPRC, have put in measures that have reformed and carried out the regulatory intention of the makers of the PIA in upstream and downstream. The investment inflow since the coming of the two regulatory bodies, the NMDPRA and the NUPRC, is almost over $20 billion.”
