Nigeria’s economy suffers a massive hemorrhage as the Nigeria Extractive Industries Transparency Initiative (NEITI) reports that oil theft has cost the country a colossal N4.3 trillion over the past five years.
This revelation came to light during the Nigeria International Pipeline Technology and Security Conference held in Abuja, with a pressing theme that calls for strengthening regulations and security for economic growth: ‘Bolstering Regulations, Technology, and Security for Growth.’
NEITI, a key agency of the Federal Government, underscored the severity of the situation, declaring oil theft as a national emergency that has far-reaching impacts on Nigeria’s economy.
NEITI’s Executive Secretary, Ogbonnaya Orji, delineated the crisis in stark numbers during his address, indicating a dire need for action. He disclosed that between 2017 and 2021, the nation recorded an alarming 7,143 pipeline vandalism incidents, resulting in the loss of 208.639 million barrels of oil.
How oil theft affects Nigeria’s economy
This theft and subsequent loss not only represent a significant financial drain on Nigeria’s economy and resources but also pose a substantial threat to the exploration and production of oil, a sector that is the cornerstone of Nigeria’s economy.
According to NEITI’s 2021 Oil and Gas Industry Report, the oil sector is a significant contributor to Nigeria’s exports and foreign exchange earnings, accounting for 72.26 percent of total exports and providing much-needed government revenue and jobs.
In a stark representation of the crisis, the figures presented show that oil theft is a sophisticated and rampant crime that often involves insider complicity, including those with technical know-how from within the industry. This has resulted in a downside to Nigeria’s economy, despite its vast oil wealth, is yet to fully capitalize on its natural resources due to the bleed caused by this endemic theft and the ensuing pipeline vandalism.
NEITI’s report reveals that the total value of crude losses between 2009 and 2020 is significantly higher than the country’s foreign reserves and nearly tenfold Nigeria’s oil savings in the Excess Crude Account. The situation is exacerbated by the N471.493 billion spent by Nigeria on pipeline repairs and maintenance in the face of such massive losses.
Orji’s statements resonated with urgency as he communicated to the conference participants that the country’s economic growth is tethered to the stability and integrity of the oil sector. He warned that without addressing the rampant oil theft and ensuring pipeline security, Nigeria’s economic advancement remains in jeopardy.
As stakeholders deliberate on the next steps, the Nigerian government and industry professionals are called upon to implement stringent measures and advanced technology solutions to safeguard the nation’s pipelines and stem the tide of oil theft.
The economic stability and growth of Nigeria hang in the balance, with the need for immediate and decisive action against these criminal activities being more pressing than ever.
As the nation grapples with the multi-faceted challenges of oil theft, the clarion call from NEITI at the conference was clear. Nigeria’s economy cannot afford to lose more to this scourge of theft and vandalism that not only undermines the country’s finances but also its potential for economic growth and development.
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