Oil industry critical to AfCFTA agenda, says NCDMB

Technological advancements in the African oil and gas industry and proceeds from operations will play significant roles in industrialising the continent and actualising the goals of the African Continental Free Trade Agreement (AfCFTA), the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said.

He said Africa’s industrialisation agenda is at the heart of AfCFTA and oil and gas remain a key part of the energy mix required for industrialising the continent and revenues obtained from selling the resources constitute key drivers of the economies of the African oil and gas producing countries.

Speaking on ‘Nigeria in the Unfolding Integration of African Market: The Oil and Gas Sector Perspective’, Wabote explained that AfCFTA, which took effect from 1st of January 2021 had turned Africa into the world’s largest free trade area, connecting 1.3 billion people with a combined Gross Domestic Product (GDP) of about $3.4trillion.

He added that AfCFTA was meant to address the low intra-regional trade in Africa estimated at 17 per cent, compared to 69 per cent obtainable in Europe and 59 percent obtainable in Asia.

Dwelling on the opportunities that could be realised by the Nigerian oil and gas industry within the confines of the AfCFTA agreement, he stated 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 and such infrastructure also leads to lower unit development costs.

According to him, infrastructure like the West Africa Gas Pipeline (WAGP) and ongoing AKK gas transmission infrastructure can serve regional markets in West Africa and the Sahel region, while the SHI-MCI yard in Lagos can serve the wider African market being the only FPSO integration yard infrastructure in Africa.

Wabote also clarified that local content was not opposed to trade liberalisation, stressing that no nation is blessed with the full list of natural resources, and can produce every product it requires.

He added: “A country must be allowed to protect its areas of comparative advantage so that it can be utilized 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.”

He also confirmed that Nigeria had established collaborations with countries like Angola, Ghana, Sierra Leone, Senegal, Kenya, Mali, Mozambique, Niger Republic, Uganda in furtherance of Local Content development in the countries.

Dwelling on energy transition and the threat that investments on hydrocarbon development projects could be withdrawn, the Executive Secretary described it as a challenge for oil producing countries to address.

He hinted that AFCFTA provided a platform for member countries to collaborate and provide funding and the technology to operate and develop hydrocarbon projects.