Nigeria to Pay $83m Shareholding Contribution to $5bn African Energy Bank

•NCDMB calls for removal of barriers inhibiting free intra-Africa trade

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

With the proposed African Energy Bank (AEB) gearing to take off this year, with initial $5 billion capitalisation, Nigeria would be paying $83 million as its equity contribution as one of the shareholders of the multilateral financial institution.

The Secretary General of the African Petroleum Producers Organisation (APPO), Dr. Omar Farouk, disclosed this in Lagos during his presentation at the Nigerian Local Content African Continental Free Trade Agreement Energy Summit organised by the Nigerian Content Development and Monitoring Board (NCDMB) in partnership with the Petroleum Technology Association of Nigeria (PETAN).

At the same AfCFTA summit, the NCDMB advocated the removal of visa restrictions among African nations, the creation of a database of available skills, and simplification of cross border deployment of labour.

The APPO scribe in his keynote address, announced that the African Energy Bank would start operations in 2024 and would have $5 billion capitalisation.

Farouk, disclosed that the 18 member-nations of APPO have started paying up their shareholding, which is $83 million per country.

He affirmed that the AEB would be a veritable platform to fund oil and gas projects within the continent and mitigate the withdrawal of international financiers because of the clamour for renewable energy.

Farouk, however, advocated for synergy among African countries, hinting that no oil-producing country on the continent could provide the financial, technological, and marketing resources that it needed to be self-sufficient.

According to him “If resources are pooled together, African countries can go far.”

Farouk advised Nigerian oil and gas companies to be diplomatic when engaging their counterparts from other African countries and to co-opt other nationals when planning to operate in foreign jurisdictions.

 “You need to have diverse shareholding and include nationals from other countries when you move to other African countries to operate. Do not create the impression that you want to dominate,” he stated.

He also confirmed that APPO was working to establish international research centres of excellence in different regions of the continent, which he said, would cater to the research needs of oil companies operating in Africa and curb their dependence on international research centres for research solutions.

He informed that APPO was working to enhance the market for African oil and gas resources and ensure that crude oil and gas resources that were produced in the continent get consumed within the African continent.

“This is important because of the threat of energy transition, which is expected to substantially shrink the demand for crude oil and gas resources internationally.

 “Another important and related action is the construction of a continent-wide pipeline system that could convey crude oil, refined products, and gas across different countries of the continent, Farouk added.

Meanwhile, as plans to implement the AfCFTA continue to unfold, the Executive Secretary of the NCDMB, Mr. Felix Ogbe, has advocated the removal of visa restrictions among African nations, the creation of a database of available skills, and the simplification of cross border deployment of labour.

Represented at the summit by the Director of Corporate Services, NCDMB, Dr. Ama Ikuru, the Executive Secretary harped on the need to unlock barriers that were inhibiting free intra-Africa trade and advised African leaders to create unified codes and standards for goods and services, reform the services sector, and enhance trade facilitation programmes.

He assured that the NCDMB would continue to partner with stakeholders such as PETAN, APPO, and other continental and regional bodies to position Nigerian oil service providers to take advantage of the big market opportunities that AfCFTA offers.

In his contribution, the Director of Monitoring and Evaluation, NCDMB, Mr. Abdulmalik Halilu, urged oil-producing countries to specialise in different manufacturing and service areas of the oil and gas industry and develop their competencies in the right specifications to enable them trade among themselves.

Citing an example with the manufacturing of complex equipment where the critical components are produced by different original equipment manufacturers (OEMs) and assembled at a designated factory, Halilu explained that such a model would ensure that each African country develops a competitive advantage and could contribute effectively to the African oil and gas industry.  He mentioned that Nigeria had already completed two Oil and Gas Parks where manufactured components or services could be assembled at competitive costs.

He stressed the need for close collaboration among African oil-producing countries as well as between African OEMs to enable the success of AfCFTA.

He listed other critical factors as trade liberalisation, uniform standards, measurements, and enforcement tools.

Speaking at a panel session at the summit, the Director of Finance and Personnel Development, NCDMB, Dr. Obinna Ofili, expressed worry over the financing prospects of some key initiatives of the AfCFTA.

He equally observed that the ongoing geopolitical conflicts were affecting the inflow of international funding into the African oil and gas industry.

Ofili, recommended that APPO should develop a financial strategy for its strategic plans and should mobilise funds from different sources, including from international financiers.

He also advised other African oil-producing countries to set up a financing programme like the Nigerian Content Intervention Fund (NCI Fund), to support the growth of their local supply chain