With fresh investments on gas development going to other African countries in the past few years, former Minister of State Petroleum Resources, Mr. Odien Ajumogobia has warned that Nigeria is facing stiff competition on the continent and needs to urgently address its regulatory framework.
Ajumogobia who is the Chairman of the Nigeria Natural Resource Chatter (NNRC) explained that while other African countries were attracting investments, Nigeria was seeing divestments due to unfavourable operating environment.
He spoke on Thursday in Lagos at an oil and gas roundtable organized by BusinessDay in partnership with the NNRC and the Nigerian Gas Association (NGA).
He stated that while there have been plans in the past including the Gas Master Plan and the Gas Revolution, the administration of President Muhammadu Buhari seem to be most likely to bring improvement to the sector.
According to him, “This administration may be the administration to move the needle because they have a robust plan, they have articulated properly and we can only hope that this kind of session add to the impetus that we bring to developing our gas resources.
“The more important reason we are having this dialogue is because time is running out. When we talk about competitors on the African continent alone, recently ExxonMobil committed to $500 million LNG plant in Mozambique.
“While would they do that? It is because Mozambique has created an environment that is attractive, has created policies that make it attractive to them”, he added.
He noted that on the contrary, “Nigeria is beginning to see divestments. People are beginning to look at other places”, pointing out that ten years ago, despite the challenges, the country was still attracting investments.
Ajumogobia who superintended over the gas sector between 2007 and 2010 said investors are going to Mozambique, Ghana, Kenya, Uganda and Cote d’Ivoire.
The former Minister of Foreign Affairs pointed that Nigeria is facing huge competition from other African countries, stressing that the thinking that “we will get our acts together” is no longer enough.
Ajumogobia said Nigeria has to do whatever it could to ensure that investments come into the sector.
He also warned that there would be no industrialization without electricity, adding that industrialization would bring new people into the tax base and diversify government’s revenue sources.
“When you talk about diversification, it is not just diversification across the board, and this administration has been focusing especially since the recession on diversifying our revenue base by over taxing those who pay taxes. I think industrialization brings new people into the tax basket by creating real wealth that is sustainable and therefore you have new enterprises to tax rather than over taxing existing enterprises which is counterproductive because if you do that you are actually deaccelerate growth in the economy”.
He harped on the need for the country pass the Petroleum Industry Bills, stressing that good regulatory framework creates the environment to attract investments into the sector.
Speaking at the event, the President of NGA, Mrs. Audrey Joe-Ezeigbo noted that adequate supply of gas to power sector was critical to Nigeria’s plan for industrialization.
She said the demand for gas would continue to grow in the next years, adding that Africa in general and Nigeria in particular would require huge investment into the power sector.
She pointed out that in gas Nigeria has the resources to solve its power supply challenges, but however noted that the framework for the development of the sector needs to ensure that investors were rewarded for their investments.