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Non-state Actors and Oil Sector Reform: Interests and Roles

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Globalization, Democracy and Oil Sector Reform in Nigeria

Part of the book series: African Histories and Modernities ((AHAM))

Abstract

This section evaluates the roles of private players in the subsidy reform scheme. The attractions in the thriving Nigerian oil business motivates individuals, local and foreign investors to scramble for participation amid a struggle to influence decisions in the industry. The pressures generated by these actors to maximize their personal and businesses interests have led to the attempts to embrace deregulation and remove subsidies on all petroleum products. The deregulation agenda is aligned with other neo-liberal policies promoted by agencies of global capital, especially the MNCs, to exploit the downstream oil industry. Both local and foreign MNCs display similar characteristics in their approach to the oil business and subsidy arrangement. Civil society organization stand in opposition to the MNCs and the government’s reform initiatives, claiming to act in the interest of the masses.

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Notes

  1. 1.

    Interviewee Number One, July 2013; and Interviewee Number Five, July 2013.

  2. 2.

    To fully grasp how African leaders invited the financial institutions to redress structural imbalances in the African economic sector, which led to adoption of SAP , see Uzodike (1996).

  3. 3.

    Margret Thatcher was the British Minister between 1979 and 1990 and her economic policy was coined Thatcherism. Thatcherism, represents a belief in a free market economy and a limited government, which led to the “privatisation of state-owned industries, including the British Telecom, British Gas, British Airways and electricity companies, putting them back into private hands” (BBC 2013). She felt government should not be involved in the planning and regulation of business. Rather, it should only maintain security and create the enduring environment for private business to thrive. In the bid to control inflation, she advocated for monetarism, which involved “controlling the money supply with high interest rates, to tame inflation without resorting to union-negotiated pay policies” (BBC 2013).

  4. 4.

    Liberalization policy, driven by commercialization , privatization and deregulation , are the brainchild of Margaret Thatcher and Ronald Regan.

  5. 5.

    The IMF report notes that Nigeria’s PSI is founded on the National Economic Empowerment and Development Strategy (NEEDS), and focuses on sustainable non-oil growth and poverty reduction. The objective of the PSI is to assist Nigeria to develop a sound policy framework, including practical macroeconomic policies under strong institutions and promote a governance structure for improved private sector projects.

  6. 6.

    South Africa , a non-oil producing country, boasts of viable refineries and SASOL oil, which is a very vibrant player in the upstream and downstream sector of the oil industry across Southern Africa.

  7. 7.

    The NCC was a government agency established to monitor companies operating in the sector. Other objectives are to support a market driven communications industry and promote universal access. For information on NCC, see http://www.ncc.gov.ng/index.php?option=com_content&view=frontpage&Itemid=107

  8. 8.

    This occurs when governments subject a sector to a certain degree of privatization or deregulation but retain some measure of control, especially in pricing.

  9. 9.

    It is interesting to note that the driving-forces behind NEEDS and Nigeria’s economic management team—Ngozi Okonjo-Iweala (Finance Minister), Obiageli Ezekwesili (Minister of Power and Steel), and Charles Chukwuma Soludo (Governor of Central Bank) —have all worked in various capacities for the World Bank . Therefore, they influenced the Nigerian political economy with Bretton Woods’ ideology, while the theoretical and practical aspects of the reform process and general economic management were approached from the purview of these institutions. For more information, see Luqman and Lawal (2011, p. 71).

  10. 10.

    MOMAN members are Con oil, Forte Oil, Mobil, MRS, Oando and Total, which are MNCs operating in the Nigerian oil industry.

  11. 11.

    This is through exporting crude and importing refined products, offering bribes to break bureaucratic inefficiency and granting of licenses.

  12. 12.

    This is the policy of the FGN to rebrand Nigeria in terms of capacitating local industries to be strategically empowered them to drive the developmental agenda of the Nigeria’s state.

  13. 13.

    MRS Oil Nig. Plc is a fully integrated company operating in the Nigerian downstream oil sector. MRS was established in 1913 and operated under the Texaco brand name. Texaco later merged with Chevron and by September 1, 2006, the name changed to Chevron Oil Nigeria Plc. By 2009, MRS successfully acquired Chevron under the name MRS Oil Nigeria Plc. For more information, see http://mrsoilnigplc.net/aboutus/history.html

  14. 14.

    Oando is a MNC energy industry, owned by Nigerian investors that operate in the energy sector. Oando commenced business operations in Nigeria’s downstream sector under the name “ESSO West Africa Incorporated”, a subsidiary of Exxon Corporation from the United States. During the privatization programme in 2000, Ocean & Oil became a core investor in Unipetrol by acquiring 30% of the company from the FGN. The balance 10% of the government’s holding was acquired by the Nigerian public. In 2002, the company acquired 60% in the equity of Agip Nigeria Plc from Agip Petrol International. In 2003, Unipetrol Nigeria Plc merged with Agip Nigeria Plc and became “Oando Group”, which now operates in the marketing, supply and trade, energy services, trade and gas, exploration and production and refining sector of energy industry. This information is available online at http://www.oandoplc.com/wp-content/uploads/Corporate_Brochure.pdf

  15. 15.

    See Constitution of the Federal Republic of Nigeria 1999.

  16. 16.

    In Nigeria, trade unions and the NLC have a long standing coalition with civil society organizations under the umbrella of the Labour and Civil Society Coalition (LASCO). LASCO mobilizes Nigerian labour and masses during industrial action and protests against fuel increase and deregulation .

  17. 17.

    President Obasanjo had made an unsuccessful attempt to spend an additional 5-year single term after completing two-terms in office.

  18. 18.

    The NLC has a long history of engaging in a coalition with civil society organization to protest against government decisions. In 1993, the massive violent protest against the annulment of the June 12 Presidential elections was led by the NLC and its affiliates.

  19. 19.

    For more information, see http://theeagleonline.com.ng/news/tuc-opposes-removal-fuel-subsidy/

  20. 20.

    “Occupy Nigeria” is a protest movement that started in January 2, 2013 in response to the announcement by Nigeria’s federal government of increasing the price of PMS from N65 to N141 and the commencement of complete deregulation of the downstream oil sector. It became a household name after the labour union-led negotiating team agreed a subsidy cut from N65 fuel price per litre to N97 in January 2013. A cross section of Nigerians in Lagos state organized themselves under the slogan “Occupy Nigeria” to protest in demand for the reversal of fuel prices to N65 per litre, and opposed any form of deregulation . See Danny Schechter (2013) “#OccupyNigeria shows the movement’s global face”, Aljazera, January 23; available online at http://www.aljazeera.com/indepth/opinion/2012/01/201212114314766322.html; and Ogala Emmanuel and Ben Ezeamalu (2012) “#OccupyNigeria: One year later, the gains, the losses”, Premium Times, January 12; available online at https://www.premiumtimesng.com/news/114890-occupynigeria-one-year-later-the-gains-the-losses.html

  21. 21.

    Tunde Bakare was a former Presidential candidate and also became the vice presidential candidate to Muhammed Buhari during the 2007 general election.

  22. 22.

    Lagos , in Lagos State, is the commercial nerve centre of Nigeria and remains the rallying point of political activism.

  23. 23.

    The media were using inflammatory captions in their headlines to strengthen people’s resistance of deregulation .

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  1. Department of Public Administration, University of Zululand, KwaDlangezwa, Kwazulu-Natal, South Africa

    Adeoye O. Akinola

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Akinola, A.O. (2018). Non-state Actors and Oil Sector Reform: Interests and Roles. In: Globalization, Democracy and Oil Sector Reform in Nigeria. African Histories and Modernities. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-70184-4_7

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  • DOI: https://doi.org/10.1007/978-3-319-70184-4_7

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  • Publisher Name: Palgrave Macmillan, Cham

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