Author(s): DR. EMEM EZE CHIOMA & OKORIE ASITA | Special Edition JUNE 2024
Abstract
The most recent literature highlights the link between particular natural resources and institutional capacity. Institutional capacity as a primary determinant of economic growth and performance has thus been a growing focus of the natural resource governance literature. In fact, there is an agreement on the importance of institutional capacity even in the resource curse debate. The underlying assumption in the institution hypothesis is that high-quality institutions lead to good governance and good economic policies that allow for better economic growth and human development, whereas in countries with low-quality institutions, natural resources will hamper growth and invite the resource curse. Prior to the enactment of the Petroleum Industry Act (PIA) 2021, the basic institutions governing the Nigerian petroleum sector were, on the whole, not efficient. One major issue was whether the three basic functional roles in the petroleum sector should be concentrated or dispersed. While recognizing that the reform of the former institutional governance framework of the Nigerian petroleum was overdue, the paper questions the extent to which the reform measures under the PIA 2021 may be the most viable option given that Nigeria differs in its institutional attributes, on account of which her governance needs vary. It is argued that the institutions reform needs of the Nigerian petroleum sector may not necessarily be as postulated under the PIA 2021. In other words, even though the institutional reforms of the PIA 2021 are sound and supportable, the growth experiences of some resource-rich development countries seem to speak otherwise for Nigeria.
Keywords: Petroleum Sector, Nigeria, Governance, Institutions, Regulation