From: Uche Usim, Abuja
Acting President Yemi Osinbajo, on Monday, charged African leaders, especially members of the African Petroleum Producers’ Organisation (APPO) to urgently see ways of diversifying their economies by weaning them from over-dependence on crude oil in line with global trend.
He also said the continent needs to invest in infrastructure and modern technologies to ensure global competitiveness while creating robust non-oil revenue generating arteries for the continent.
Speaking at the opening of the extraordinary session of the Council of Ministers of APPO, in Abuja, the Acting President urged the various African Ministers of Petroleum present to heavily invest in agriculture, mining, renewable energy, transport and technology, pointing out that in the nearest future, vehicles and other heavy equipment will no longer be powered by petroleum products but electricity and other cleaner sources of energy.
According to him, the volatility in the crude oil price and the full embrace of other energy sources by developed nation remain a loud reminder that African crude may not be needed in few decades ahead.
Osinbajo added that from February 2018, Nigeria will host an annual international petroleum summit in Abuja with the sole aim of creating a strong platform for global players to come to Africa and brainstorm on ways to improve African economies.
He said: “this conference could not have come at a more significant time. It sounds as wake up call for African nations when the continent is witnessing volatility in the petroleum industry. Crude oil and hydrocarbon are central to our economy. Revenue from oil accounts for a significant portion of our national budget and with that, economic planing and growth are generated.
“Over the last three years, there has been remarkable drop in crude oil price and this has also led to drop revenue generation and lower funds to buoy national budgets.
“So we need to face the reality. We are now challenged by oil demand fall and sharp revenue drop. So, we need to evolve non fossil fuel programmes. Some countries have even started, setting targets as low as 10 to 15 years to achieve zero oil operation.
“After 30 years of APPO’s formation, we need a bold reform and Nigeria will play a major role in that. We need to rise and adapt to changing realities. There is no better time for reform and restructuring of operations other than now. These reforms follow global trends. We want to diversify our economies but we also know we need oil to exit from oil.
“We have to create jobs and leverage on oil while it is still relevant to fund and support other ambitions. In Nigeria, we are evolving reforms that will ensure more transparency in the oil sector. Our Local content policy is being fine-tuned. APPO is to support, build and export local capacity.
“We also know some countries are funding terrorism from proceeds from oil sales and we must ensure that does not happen here. We need to ensure we always track where our funds are channelled. So fiscal transparency is key here”, the acting president stated.
In his remarks, the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, said there was an urgent need to reorganise APPO and ensure it gave bite to serious issues plaguing member countries, other than the perennial cosmetic approach in handling various issues plaguing the body.
He said: “Some of the challenges today is that APPO members want a new organisation to give bite, but we see changes that peripheral. We need to hit the core. Oil price is not stable. It is about $40 a barrel for now. With this price, oil companies have lost revenue and capacity. We need to enlarge and protect the African market where our players have a first opportunity.
“But again, investing in technology is also key. However, we know oil is fading to the point that by 30 years time, it won’t be relevant because people will embrace cleaner energy sources. Some countries are already switching fully to electric cars in fours time. If we do not transform rapidly, then we have wasted out time,” Kachikwu admonished.