National Action Committee (NAC) for the Implementation of the African Continental Free Trade Area Agreement (AfCFTA) has said Nigeria can enhance the opportunities of the trade agreement with full deregulation of the downstream sector of its petroleum industry, its secretary, Mr Francis Anatogu said, yesterday.
Nigeria is among African countries that have ratified the AfCFTA which began its implementation on January 1, and aims to redefine trade relations within African states with a proposal of creating a central market for goods and services, with free movement of people and investments across 54 countries.
Anatogu said refined petroleum products was Africa’s number one import with countries in the continent importing over $36 billion worth of petroleum products per annum.
“So, Africa presents huge market for our oil and gas sector, especially the midstream and downstream sector. The very first step is for deregulation to happen and there is a level playing field for businesses to make investments.
“For the petroleum industry, without deregulation we will not be able to maximise the benefits of AfCFTA. The first thing is to even get the marketers to even import and sell in Nigeria. They need to feel confident to import petroleum products and sell in their home country before they can move to other African countries.
“What we now need to do as a country is to make sure that our businesses are best equipped to get into that market in Africa. What that means is that we need to encourage investments. With deregulation, businesses are encouraged to invest because they know they can charge competitive prices and recover their investments,” he said.
Anatogu also harped on the need to create a level playing field for marketers and the Nigerian National Petroleum Corporation (NNPC) to create competition in the downstream sector.
He noted that while this could drive up the pump price of Premium Motor Spirit (petrol) in the short term, it would eventually lead to stability as witnessed in the deregulation of other products like diesel.
“What we have now is NNPC being the sole importer of products, but we believe that if you allow it to float, the price might go up a bit in the short term but it will stabilise. With deregulation, if we look at the West African coast for instance, going to Cameron, Niger, Benin; imagine the number of Nigerian trucks that can be supplying these countries. Also, there are those that are concerned that if we allow deregulation that a lot of people will be impoverished. The truth of the matter is that the amount of jobs it will create in the medium term far outweighs the risk of the short term spike.”