By Tracy Moses
The House of Representatives Committee on the South-South Development Commission on Wednesday examined the proposed funding framework for the South-South Development Commission (SSDC), as petroleum regulators and oil industry operators opposed a plan to compel companies operating in the region to contribute three per cent of their annual budgets to the Commission.
The objections were raised during a resumed public hearing on a bill seeking to amend the South-South Development Commission (Establishment) Act, 2025, to strengthen the Commission’s funding base.
The hearing brought together petroleum sector regulators, oil producers, government agencies and other stakeholders to examine the proposed amendment and offer recommendations before the bill proceeds for further legislative consideration.
Chairman of the Committee, Rep. Julius Pondi, said the hearing was reconvened to accommodate key stakeholders who were unable to attend the initial session on July 8 because they were participating in the Nigerian Oil and Gas (NOG) Conference.
He said the committee considered it necessary to hear from all relevant stakeholders, given the strategic importance of the petroleum industry to the South-South region and the proposed legislation.
Pondi reaffirmed the House of Representatives’ commitment to a transparent, inclusive and consultative legislative process, noting that public hearings provide an opportunity for government institutions, industry operators, professional bodies, civil society organisations and host communities to shape legislation through constructive engagement.
According to him, the proposed amendment is intended to broaden the Commission’s funding sources to enable it more effectively deliver its mandate of promoting sustainable development across the South-South.
He observed that despite serving as the nation’s economic backbone through petroleum production, maritime commerce and industrial activities, the South-South continues to grapple with infrastructure deficits, environmental degradation and socio-economic challenges that require sustained intervention.
“We are particularly interested in receiving constructive contributions on the proposed funding framework, its sustainability, its implications for government and industry, as well as alternative proposals that can further strengthen the objectives of the legislation,” Pondi said.
Regulators Raise Concerns
Presenting the position of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Commission Chief Executive, Mrs. Oritsemeyiwa Eyesan, represented by the Head of Regulations and Statutory Compliance, Kingsley Chikwendu, expressed support for a predictable, transparent and sustainable funding framework for the Commission.
He, however, raised concerns over the provision requiring oil and gas producing companies operating in the South-South to contribute three per cent of their total annual budgets.
Chikwendu said the phrase “total annual budget” was not defined in the proposed amendment, creating uncertainty over how the contribution would be assessed, determined and enforced.
He noted that the bill failed to clarify key issues, including the basis for determining liability, deductibility of the contribution, payment timelines, enforcement mechanisms, treatment of joint venture operations and companies with assets spread across multiple regions.
According to him, the proposal could effectively introduce another expenditure-based levy payable regardless of a company’s profitability, production levels or prevailing market conditions.
He further observed that upstream petroleum companies are already subject to numerous statutory obligations, including royalties, petroleum taxes, the Niger Delta Development Commission (NDDC) levy, Host Community Development Trust Fund contributions under the Petroleum Industry Act (PIA), Nigerian Content Development Fund contributions, environmental remediation obligations and abandonment fund contributions.
The Commission urged lawmakers to undertake a comprehensive assessment of the potential impact of the proposed levy on production costs, investment decisions and the overall competitiveness of Nigeria’s upstream petroleum industry before taking a final decision.
Operators Oppose Additional Levy
The Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry also rejected the proposed levy.
Speaking on behalf of the association, its Chairman, Bala Wudiri, said oil and gas operators were already making significant statutory contributions under existing laws, including payments to the Niger Delta Development Commission and Host Community Development Trust Funds established under the Petroleum Industry Act.
He warned that imposing another three per cent contribution would increase the financial burden on operators, duplicate existing statutory obligations and diminish Nigeria’s attractiveness as a destination for oil and gas investment.
Wudiri called for greater clarity on the proposed funding mechanism and urged lawmakers to adopt a balanced approach that would strengthen the financial capacity of the South-South Development Commission without discouraging investment or creating overlapping financial obligations.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) also urged the committee to ensure that any new funding arrangement aligns with the fiscal philosophy and investment objectives of the Petroleum Industry Act, 2021.
Representing the Authority, Senior Manager Ahmed Laido said any additional financial obligation should promote regulatory certainty, strengthen investor confidence and support the Federal Government’s ease-of-doing-business reforms.
He stressed that while the developmental needs of the South-South remain important, the proposed funding model should not undermine the sustainability, affordability and global competitiveness of Nigeria’s petroleum industry.
The public hearing ended with broad consensus on the need to strengthen the South-South Development Commission’s capacity to deliver infrastructure and development projects across the region. However, stakeholders differed sharply on the most appropriate and sustainable funding model.
The committee is expected to review all memoranda and submissions before presenting its report and recommendations to the House of Representatives for further legislative consideration.