Nigeria can fully benefit from the opportunities the African Continental Free Trade Area Agreement offers if a concrete regulatory framework is created for the oil and gas industry, the Major Oil Marketers Association of Nigeria has said.
The Executive Secretary/Chief Executive Officer, MOMAN, Mr Clement Isong, said this in his keynote address at an AfCFTA strategy workshop where he spoke on how to leverage the trade deal to reposition Nigeria’s oil and gas industry for its next phase of growth.
According to him, crude oil accounts for about 10 per cent of the country’s GDP, 70 per cent of government revenue, and more than 83 per cent of total export earnings.
He noted that the oil sector declined 13.9 per cent in the third quarter of 2020, following a 6.6 per cent slump in Q2 2020, while the non-oil sector shrank 2.5 per cent and 6.1 per cent in Q3 and Q2.
“Poverty, inequality, rising unemployment and underemployment and insecurity still remain widespread; factors which could unfortunately deter foreign investors and shrivel the domestic economy. Key sectors experienced severe job losses,” Isong said.
He said the prolonged closures of the land borders to curb smuggling negatively affected the trade with other West African countries.
He said, “The absence of a concrete regulatory framework for the Nigerian oil and gas sector – a sector referred to as one of Nigeria’s most important industries has left the sector mired in uncertainty.
“We can still create that regulatory framework and fully benefit from the opportunities the African Continental Free Trade Area Agreement offers us as a country. AfCFTA has as its objective to create a single continental market for goods and services thus paving a way for the acceleration and growth of the economies of African countries.”
According to Isong, the private sector has a critical role in collectively driving Nigeria’s economic growth, and this must always be done within the limits of societal values.
He said, “The main objectives of the private sector are to position Nigeria as a refining and petrochemical industry hub for the downstream petroleum industry in Africa and become a net exporter of petroleum products to the region, including ancillary products such as petrochemicals, fertilisers and plastics; to ensure that high-quality petroleum products are available all over Nigeria at reasonable prices at all;
“To save the Federal Government of Nigeria the huge expenditure currently incurred on subsidising petroleum products and administrative costs associated with superintending over price control in the industry;
“To employ millions of Nigerian youths in a viable downstream petroleum sector; to arrest the long-term degradation of the capacity, infrastructure and standards in the downstream petroleum industry and build a sustainable industry; and
“To develop an industry that has capacity to attract local and foreign direct investment into Nigeria through the establishment of ancillary and derivate industries and/or through equity participation.”
