The Executive Secretary of the Nigerian Content Development & Monitoring Board (NCDMB), Engr. Simbi Wabote has said that the African oil and gas landscape provides huge opportunities for cross-border infrastructure to unlock development of stranded assets or bring energy closer to the people if well harnessed.
According to Wabote, who stated this at the Real News, 9th Anniversary Lecture and Investiture into the Hall of Fame, where he was the Guest Lecturer, such infrastructure also leads to lower unit development costs.
But for this to occur, countries must be allowed to protect their areas of comparative advantage so that it can be utilised to trade for what they lack, because discouraging local content laws and practice in the name of free trade is like fostering one-way trading which is not sustainable.
Nigeria continues to lead the way in the practice of local content in the oil and gas industry.
Speaking on the topic: Nigeria in the Unfolding Integration of the African Market : The Oil and Gas Sector Perspective, the Executive Secretary of NCDMB , said that African oil and gas landscape provides veritable opportunities for economic development of the continent.
He expressed delight with the emergence of the African Continental Free Trade Agreement (AfCFTA) , saying that it has the elixir needed to encourage intra-African trade which is currently very low as against what obtains in other regions like Europe and Asia.
From all indications, we can see that AfCFTA holds a great promise for the economic growth and development of Nigeria and indeed other African countries. There is no doubt that the Nigerian oil and gas industry has a role to play in AfCFTA.
However, all the key stakeholders in the oil and gas industry need to align the industry to better fit into the AfCFTA regime.
Said Wabote “On the 1st of January 2021, the whole of Africa became one single market courtesy of the African Continental Free Trade Agreement (AfCFTA) effectively creating the world’s largest free trade area connecting 1.3billion people on the continent with a combined GDP of about $3.4trillion.
The agreement is meant to address the low intra-regional trade in Africa estimated at 17% compared to 69 per cent obtainable in Europe and 59 per cent obtainable in Asia.
Some of the key thrusts and targeted benefits of AFCFTA include, free movement of people, goods, and capital, removal of tariff and non-tariff trade barriers, investing in cross-border infrastructure, streamlining trade, investment, and monetary policies.”
Thus, AFCFTA remains a game changer in turning the fortunes of the continent around as its economic and social benefits cut across multiple sectors such as trade, education, health, finance, agriculture, transportation, manufacturing, and even the oil and gas industry.
Regarding Nigeria’s positioning in the emerging integration of the African market, the following perspectives are pertinent for consideration to ensure the full benefits of the agreement are realized: infrastructure, local content, energy transition, funding, resource utilisation, human capacity development/expatriation and services.
He stressed the need of infrastructure if the objectives of the Nigerian oil and gas industry against the AFCFTA agreement.
“Specific to the energy sector, the key driver of infrastructure requirement is the need to convert the energy source in its raw form into a useable form and make it available where it is required to power the needs of humans and the society. Examples of such infrastructure include hydrocarbon processing plants, pipelines, power plants, pylons, ports, jetties, terminals, and several others.
The African oil and gas landscape provides huge opportunities for cross-boarder infrastructure to unlock development of stranded assets or bring energy closer to the people. Such infrastructure also leads to lower unit development costs.
For example, the existing West Africa Gas Pipeline (WAGP) and on-going AKK gas transmission infrastructure provide good opportunity to serve regional markets in West Africa and the Sahel region especially with the recent hydrocarbon discoveries.”
According to Wabote , facility such as the SHI-MCI yard in Lagos, the only FPSO integration yard infrastructure in Africa has put Nigeria at a vantage position to serve the wider African market.
He also shared his thoughts on is local content practice in the oil and gas industry, saying that “it is typical for many to consider local content as being against trade liberalization. I wish to state categorically that AFCFTA and Local Content are not mutually exclusive. No nation is blessed with the full list of natural resources, and none can produce every product it requires.”
This implies that a country must be allowed to protect its areas of comparative advantage so that it can be utilised to trade for what it lacks. Discouraging local content laws and practice in the name of free trade is like fostering one-way trading which is not sustainable.
Nigeria continues to lead the way in the practice of local content in the oil and gas industry. We have on-going collaboration with our brothers and sisters in Angola, Ghana, Sierra Leone, Senegal, Kenya, Mali, Mozambique, Niger Republic, Uganda, and many others as we match forward and compare notes in our local content journeys.
These collaborations have fostered integration of thoughts and actions thereby further enhancing the realisation of the objectives of AFCFTA.