Acting President Yemi Osinbajo has drawn the attention of the countries in Africa to the reality of a future where demand for and revenues from oil would drop sharply.
According to him, almost every major oil importing country today has embarked on an aggressive non-fossil fuel alternative programme, saying: “China, Japan, and some Scandinavian states have already set dates within the next 10 to 15 years to produce and use only electric vehicles. The zero oil days are clearly around the corner.
Professor Osinbajo spoke today, Monday, at the Extra-Ordinary Session of the Council Of Ministers of African Petroleum Producers Organisation (APPO) in Abuja.
He recalled that over the last three years or so, oil-producing countries across the world have experienced the full impact of the drop in oil prices, with significant negative impact on government revenues and budgets, and on the value of even national currencies.
He said: “this volatility has triggered much soul-searching, and governments are being compelled to ask themselves difficult but necessary questions about the present and the future.
The full text of the Acting President’s speech is reproduced here: It gives me very special pleasure to be here at this Extra-Ordinary Session of the Council of Ministers of the African Petroleum Producers Organisation (APPO).
This session holds at a very significant time for our continent and our countries. A time when we as a continent and indeed the rest of the world, are witnessing volatility in the petroleum market, and by implication, our local economies.
The centrality of the hydrocarbon industry to the economies of our countries is self-evident. This is reflected in the revenue inflows that account for a significant percentage of our budgets and have become one of the, if not the primary sub-structures upon which economic planning is based, and from which economic development and growth are generated.
Over the last three years or so, oil-producing countries across the world have experienced the full impact of the drop in oil prices, with significant negative impact on government revenues and budgets, and on the value of even national currencies.
This volatility has triggered much soul-searching, and governments are being compelled to ask themselves difficult but necessary questions about the present and the future.
Besides, the reality of a future where demand for and revenues from oil drop sharply, is already upon us. Almost every major oil importing country today has embarked on an aggressive non-fossil fuel alternative programme; China, Japan, and some Scandinavian states have already set dates within the next 10 to 15 years to produce and use only electric vehicles. The zero oil days are clearly around the corner.
I think the point has been very eloquently made by the Honourable Minister for Petroleum Resources of Nigeria, Dr. Ibe Kachikwu.
It is therefore heartwarming that, after thirty years of service to Member-Countries and its existence, this Organisation has recognised the need to fashion out and implement a bold programme of reforms.
Nigeria shares this objective and fully supports the reform process that will enable APPO rise up fully and adapt to the changing realities of the global oil industry, and the global economic order.
Indeed there can be no better time than now, for the reform that APPO has embarked upon, a reform to restructure its operations, and its interaction with the world, while continuing to deliver service to its members. Let me state that the reform is in the right direction and it certainly follows global trends.
Our government revenues and export bases are in dire need of diversification, away from the dangerous dependence on natural resources that we have seen in the past.
But also the paradox is inescapable that we need oil to get out of our dependency on oil. So the capacity to add value to the crude oil that we extract is crucial.
The whole range of petrochemical enterprise remains a largely untapped option for growing industrial opportunities, creating jobs and increasing our chances of delivering on our national and continental commitments to inclusive growth.
We must leverage our oil resources to fund and to support our ambition to create economies fit and ready for the 21st century.
In Nigeria we’re pursuing a series of reforms along these lines, combining executive and legislative actions to create a sector that is more efficient, more transparent, and more attractive to domestic and foreign investments.
We are also making progress in fine-tuning and implementing our local content policy – and that, I must say, is one area that is critical to the future of APPO.
Indeed that was one of the reasons why APPO was created; to provide a platform that will support and empower African countries to build and exploit local capacity and technology to the fullest.
We know, of course, that the prosperity of Africa ultimately lies in its human resources and talent, and not in anything we extract from the earth.
But as the world begins to move in the direction of alternative and clean energy, the reform of APPO should factor in these new realities, and aim to reposition the Organisation as a clear leader in this regard.
We must convince ourselves of the imperative of investing today’s fossil fuel revenues in the clean energy technologies that are already defining today and tomorrow.
Technology and innovation still remain a challenge to developing countries and in particular APPO Member-Countries, and this of course negatively impacts efficiency and competitiveness.
I believe that your reforms must address these challenges and proffer solutions in the form of knowledge sharing, technology sharing and technology development.
But peculiar to our member-countries is the challenge of ensuring that our technology-efficient ideas take into account our growing population of young people who need jobs.
In order words, we must pay attention to the threat that technology takes away jobs and we must create the necessary balance so that the youth bulge that we experience is actually a demographic dividend and not a deterrent or any kind of disadvantage.
Permit me to mention a matter of immediate concern. Around the world today, we are increasingly seeing crude oil – often of untraceable origins – funding the activities of terrorist groups and other purveyors of violence and conflict.
Many of these groups constitute a threat or a potential threat to the safety and security in many of our member states. APPO reforms therefore need to build the capacity to maintain a reliable statistical database, and to deploy technology to track every molecule of crude oil extracted from our territories.
This is an important step, not only for global security, but also for fiscal transparency, accountability, and of course the required levels of international collaboration and cooperation that an organization like APPO is well-placed to muster.
In closing, let me use this opportunity to announce that from February 2018, Nigeria would host, annually, a world-class International Petroleum Summit here in Abuja. This represents our contribution to the quest for a sustainable platform for global industry players to come to Africa in the interest of the oil industry.
It is now my pleasure to unveil the logo of the NIGERIAN INTERNATIONAL PETROLEUM SUMMIT (NIPS), and to invite you and industry players and your national institutions to be our guests in 2018. I am going to unveil it electronically.
It is now my very special pleasure to declare this Extra-Ordinary Session of the Council of Ministers of APPO open.
I wish you all very fruitful deliberations and I urge you to please enjoy Nigeria’s warm hospitality. Long live APPO. Long live the Federal Republic of Nigeria. Long live all member-countries of APPO. [myad]
