Nigeria oil bill will disappoint

Significance

Discussed since 2008, the bill’s passage comes in response to worsening macroeconomic conditions. These include falling government revenues, declining foreign exchange reserves and increasing difficulties in raising loans from international financial institutions. The bill aims to address some of the underlying causes of these difficulties through wholesale reforms to the petroleum sector.

Impacts

• The law will reduce government revenues in the short term by cutting taxes on profits.
• The law will encourage the development of marginal oil fields, with production expected by early 2022.
• Barring substantial increases in reinvestment of oil funds into host communities, insecurity will persist in the Niger Delta.