Ikpea: Tinubu’s Subsidy Removal, Forex Unification are Hard Choices Made for Nigeria’s Future, Prosperity

Oluchi Chibuzor

The Chief Executive Officer of Lee Engineering & Construction Company Limited sees a ray hope of hope amid Nigeria’s gloom, tranquillity about overwhelming chaos and prosperity as millions of Nigerians grapple with poverty. His basis for hope is not unfounded. A self-made, ingenious oil and gas magnate reiterates his conviction that hard choices being made by the country today are a promissory note to a certain productive and prosperous future. Not many may share his conviction, but Ikpea says that if the new administration of President Bola Tinubu conscientiously implements his economic policies, there will be light at the end of the tunnel

Resetting Nigeria’s economy and the general well-being of its citizens is instrumental in making Africa’s most populous country great again, and the recalibration will require some audacity and ingenuity, says Dr Leemon Ikpea, the Chief Executive Officer of Lee Engineering & Company as he holds out premium optimism that it is always darkest before the sun shines. The oil magnate told THISDAY recently that tough decisions are being made by Nigeria’s new leader, President Bola Tinubu, and if sustained by pragmatic implementation, the outcomes will lead to economic prosperity and political stability.
The Lee Engineering honcho has always firmly believed in the new president’s dexterity and considers the current deprivations millions of Nigerians face as necessary sacrifices.

Championing New Economic Drive

“I believe this current administration will surpass previous administrations’ achievements in this country. You can see some decisive decisions that have been taken so far. By the time Mr President’s cabinet is up and running, forming the Federal Executive Council, they will hit the ground running. I’m very optimistic,” the oil mogul notes.
While admitting that the new government has much grounds to cover, he underscores the importance of the petrol subsidy removal, acknowledging its discomfitures but stressing its value and opportunities for national growth. Ikpea also highlights the courage of President Bola Tinubu in swiftly removing the fuel subsidy, stating that several past heads of state had failed to remove the cancerous subsidy regime successfully.
“I think I share that we have to start from somewhere. If the government had continued to put in billions of naira to sustain the subsidy regime, it would be very difficult for this country to survive economically: the debt servicing is there. Add the servicing of debts to paying for the subsidy, then what is left for the country to survive?” the Lee Engineering CEO reasoned.

The business mogul dreams of a great Nigeria of equal opportunities for all in the private and public sectors and has spent several years in the oil and gas industry to deepen economic potential and prosperity across the country. A technocrat, Ikpea clearly understands the role of governance and policies and demonstrates his optimism about the Tinubu administration.
“I have been in Lagos for more than 20 years. I have been following the president-elect’s track record right from the beginning. Lagos is the face of Nigeria. You can see infrastructure and a lot of innovations in Lagos. I could envision the incoming administration of the president-elect performing very well,” Ikpea states.
He provides a basis for that optimism.

Time for Optimism

“Apart from Mr President’s track record: any human being that is highly criticised, any human being that is highly criticised, and negatively spoken of that individual come what may, usually succeed. The motivation to prove his critics wrong is very high. Those negative criticisms trailing him will serve as a wind in his sail,” says Ikpea.

For him, the new administration is the “best government we would ever have.” Ikpea was quick to explain why.
“Yes, it will be one of the best governments we have ever had in Nigeria because the incoming administration has seen the mistakes in various sectors of past governments and the anger of Nigerians. I am sure the incoming government will put a smile on Nigerians’ faces,” the oil magnate states, pointing out that the president exudes the confidence of an astute politician and administrator.
Ikpea further points to the president’s “vision for Lagos, which has made it the face of Nigeria,” stressing that Tinubu is expected to surpass whatever achievements past governments had recorded and adds: “I am very optimistic and wish you well. I have followed his trajectory over two decades; I have seen his programmes, policies and their implementation. He has done well. He will yet do well as the president. He will bring his experience to bear on Nigeria’s affairs fully.”

Again, reflecting on the issue of the subsidy removal, the decorated and widely acclaimed business mogul emphasises the pain that must be endured to remove the elephant in the room and get the country going again. Ikpea admits there must be a tightening of the belt, albeit momentary.
I think it’s a very hard decision. Everybody knows that. But if you look at it again, Nigerian oil is still one of the cheapest oil in the world. Yes, of course, people will suffer. But if we don’t suffer momentarily, how will enduring enjoyment come? It’s natural: work before enjoyment,” Ikpea reiterates. “Enjoyment will come.”
The Lee Engineering chief is convinced that the pleasure outweighs the present pains, calling on the rich and the poor to trust the process that promises prosperity, healthy competition in the oil and gas industry and other aspects of the economy. Ikpea notes that with the full deregulation of the petroleum industry, many players will be encouraged to participate in the market, driving up beneficial competition.

“So I’m very sure the market, the price will balance itself out in the long run. And it’s not going to be suffering without end. It’s temporary; everything will stabilise,” he assures Nigerians. Then, he adds, “And the money recovered can be used to fix refineries, roads, health facilities, improve electricity supply, transportation, etc.”
“We may suffer for now. Later on, the sun will shine again,” Ikpea insists.
Amid Nigeria’s economic conundrum, the Lee Group has kept its momentum.
“We have ongoing gas projects. Several of those projects will also increase revenue for the government. Those projects are ongoing,” Ikpea reveals. “We’re starting a new one, which will take about three years to complete. We signed that contract couple of months ago.”

Fixing Forex

When the federal government announced the unification of the foreign exchange market, it was greeted with mixed feelings. For the billionaire magnate Ikpea, floating the naira is in the best interest of Nigeria’s fiscal stability, admitting, “It will help. Initially, it will be very rough. So let us also be patient with the government. Yes, they are taking the right decision on the right move.”

Lee Engineering’s Oil and Gas Revolution in Nigeria

“The factory right now is the fabrication yard. The fabrication yard in Warri is currently undergoing a test run of all the equipment there. And between two and three months, the factory will be ready for inauguration,” Mr Ikea tells THISDAY. “We had informed the federal government, especially Mr President, to come and inaugurate this project. It’s a project that we will help to drive his dream through the oil and gas sector.”
On the transfer of technology, the oil magnate says, “Transfer of technology is a hard nut to crack in international economies. However, Lee Engineering is breaking new ground. So, we are bringing the technology down to our fabrication yard in Nigeria. Then from there, Nigerians will learn from it. Then, in the way, we are transferring technology to indigenous companies.”

Unfinished Business

The new government has unfinished business in the oil and gas industry, Ikpea says.
“But at the same time, the staff and the people in the industry are first-class personnel because they’re well-trained. I could tell because I have been in the industry for 47 years,” he emphasises. “I have been following them right from the beginning. Nobody can steal a kobo in NNPC because their procedures are very strict, with meticulous attention to due process. The NNPC has become a well-structured organisation. It remains one of the best parastatals this country could ever have.”

The Lee Engineering CEO has a simple suggestion to keep the wheel of oil running.
“What I will suggest the incoming government should do: one, over 5,000km pipeline in this country. And these pipelines were laid in the late 1980s. Calculate the years: it’s more than 30 years. There must be corrosion. The same pipelines have remained. They have not been changed, resulting in oil loss and stealing because criminals exploit the corroded parts of the pipelines to siphon large-scale quantities of oil,” says Ikpea.

That leaves the government losing a lot of money. If the government could do the hard work, a lot could be saved for the nation’s coffers.
“It’s a lot of work to be done. If the government wants to avoid stealing, the pipelines have to be rejuvenated by fixing the badly damaged ones. They should create a good network of pipelines and bury them deeper into the ground. If the depth was three feet before, let them take it six feet down; that way, it becomes more difficult for potential oil thieves to unravel the pipelines and steal oil,” Ikpea notes.

He recommends high-powered surveillance that could nip criminal activities in the bud to make the hard work meaningful. He also believes careful consideration should be given to the pipelines and refineries, “along with that, there should be proper surveillance. They need to concentrate on the pipeline, and they need to concentrate on the refineries to ensure that the refineries are functional because if the refineries do not produce, we will continue to have problems.”

Local Content is King

“I always talk about local content. If this government empowers the NCDMB, I’m sure a competent person will run it. Right now, they have very good people running it. The local content board is a livewire of Nigeria’s economy. It’s a livewire for indigenous companies. Because they are doing very well,” Ikpea points out.
Ikpea’s focus remained on deepening the country’s success stories, facing the challenges and building bigger frontiers for national prosperity, stressing the matchless contributions of the Nigerian Content Development and Monitoring Board (NCDMB) to strengthening the hands of local players in the oil and gas industry. He feels the NCDMB has a lot going for it and can only get better without undue interference and politicisation of the agency. Yet, Ikpea suggests the continued strengthening of the local content board for more successes to be recorded per indigenous capacity in the oil and gas sector.

“You know, if the government properly empower the local content board because they have limitations. More empowerment is needed in the local content board. They need competent people to run that department because that is the livewire of the unborn generation. If I am the government, the people who are there now will get another four years to put all their structures in place,” Ikpea explained.
He suggests that when “they put the necessary structures in place, anybody coming in will have a well-established structure and system to work with. The personnel at the local content board are very competent and committed, but they need to be empowered.”
Another measure the Lee Engineering founder urges the government to consider is consolidation.

“They should be given time to consolidate the structure being built by the board. The board is the future of Nigeria. It is the future of oil and gas. The local content board is training a lot of Nigerians. The skills capacity of Nigerians in the oil and gas sector has continued to increase,” Ikpea stresses. “The board is training a lot of Nigerians through Lee Engineering and other indigenous oil and gas firms.”

Established in 2010 by the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, the NCDMB is to make procedures that will guide, monitor, coordinate, and implement the provisions of the NOGICD Act, signed into law on April 22, 2010, by then-President Goodluck Jonathan, giving birth to the NCDMB.
As a vibrant local player in a dynamic global industry, Lee Engineering has stepped up to the plate by acquiring marginal fields. By the time the company starts production, it will not need to import many resources into the country because it will use equipment manufactured in its fabrication plant, which is cost-effective. Ikpea will bring to bear his 14 years of experience in the construction industry.

His leading indigenous EPCOM (engineering, procurement, construction, operation, and maintenance) company, the Lee Engineering and Construction Company, has achieved several milestones and received numerous commendations, awards, and certificates from local and international organisations.
Ikpea also talks about the potential strides of Nigeria in the gas industry amid a challenging atmosphere that pervades Europe as Russia continues its violent aggression against Ukraine.

“Nigeria is exploring several opportunities in the gas sector. Nigeria and Morocco recently signed an agreement on a gas pipeline project linking Nigeria to Morocco, which will also supply West Africa and Europe,” says Ikpea. “This 6,000-km project will cross 13 African countries along the Atlantic coast. From there, it will reach other parts of the world. That’s a huge step. In addition, other projects are going on in the country, including that of the NLNG.”
Even with that, he understands the country requires a huge financial outlay to develop the oil and gas sector fully and disclosed that the federal government and the NNPC are committed to exploring the gas potential.

“There are other gas projects about to take off. This is the time for gas; it’s the gas revolution,” Ikpea declares. “The federal government is very serious about it; the NNPC is serious about it too. Nigeria is in the gas revolution. Nigeria has started, and the NNPC has started.”
The oil and gas sector is one of the most critical sectors in the country’s economy, accounting for more than 90 per cent of its exports and 80 per cent of the federal government’s revenue. It is the ninth-largest global gas reserve with over 200 Tcf. As of 2019, Nigeria had Africa’s largest oil and gas reserves, with around 37 billion barrels of oil and 5.4 trillion cubic meters (bcm) of gas. With a production of 2.11 million barrels per day in 2019 (approximately 25 per cent of the total output in Africa), Nigeria continues to dominate Africa’s oil production.

The Lee Engineering firm, founded in 1991, has become a conglomerate dealing in retail, tourism, aviation, and manufacturing, including exploration and production. It has a fabrication workshop measuring 2,515sqm, complete with blasting/painting bays and state-of-the-art equipment. The company, Lee Engineering Group and Allied Companies Limited (including Lee Engineering, Tribet Ltd [travels and tours], Tribet Aviation, Tribet Purified Waters, and Lee Oasis), has at least 2,000 employees.