NCDMB Wants Unified Standards, Financial Strategies For AfCFTA Success
By William Emmanuel Ukpoju
In a bid to unlock the potential of the African Continental Free Trade Agreement (AfCFTA), the Nigerian Content Development and Monitoring Board (NCDMB) has put forth a series of recommendations aimed at fostering collaboration, standardization, and financial resilience within the continent’s oil and gas sector.
The Executive Secretary of the NCDMB, Engr. Felix Omatsola Ogbe made these recommendations in the keynote address he delivered in Lagos at the Nigerian Local Content AfCFTA Energy Summit organised by the Board in partnership with the Petroleum Technology Association of Nigeria (PETAN).
Engr. Ogbe emphasized the need for cohesive efforts to remove barriers hindering intra-Africa trade. Among the key recommendations proposed by the NCDMB Boss are the establishment of uniform standards for goods and services, the creation of a database of available skills, and the simplification of labour deployment across borders.
Represented by the Director of Corporate Services, NCDMB, Dr. Ama Ikuru, the Executive Secretary expressed concerns over the funding prospects for AfCFTA initiatives amidst geopolitical conflicts affecting international funding inflows. He recommended the development of robust financial strategies and the mobilization of funds from diverse sources, including international financiers, to support the growth of local supply chains.
Highlighting the importance of specialization and collaboration, Mr. Abdulmalik Halilu, Director of Monitoring and Evaluation at NCDMB, underscored the significance of each African country developing competitive advantages within specific areas of the oil and gas industry. He proposed a model where countries specialize in different manufacturing and service areas, fostering a symbiotic relationship that enhances overall industry competitiveness. He also mentioned that Nigeria had already completed two Oil and Gas Parks where manufactured components or services can be assembled at competitive costs and therefore stressed the need for close collaboration among African oil-producing countries as well as between African OEMs to enable the success of AfCFTA.
The summit also saw Dr. Omar Farouk Ibrahim, Secretary General of the African Petroleum Producers Organisation (APPO), advocating for synergy among African countries to pool resources for collective advancement. Dr. Ibrahim announced the forthcoming establishment of the African Energy Bank with a substantial capitalization, aiming to fund oil and gas projects within the continent and mitigate the impact of global energy transitions. The APPO Scribe announced that the African Energy Bank will start operations in 2024 and would have $5bn capitalization and the 18 member nations of APPO have started paying up their shareholding, which is $83m per country. He affirmed that the African Energy Bank 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.
Furthermore, Dr. Ibrahim disclosed APPO’s plans to set up international research centres across Africa, to enhance the continent’s research capabilities and reduce dependence on external research institutions. He also stated that APPO is working to enhance the market for African oil and gas resources to ensure that crude oil and gas resources that are produced in Africa 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,” he said. 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.
Speaking at a panel session during 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 African Continental Free Trade Agreement (AfCFTA). He equally observed that the ongoing geopolitical conflicts were affecting the inflow of international funding into the African oil and gas industry.
He recommended that APPO should develop a financial strategy for its strategic plans and mobilize funds from different sources, including 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.
As the continent prepares to navigate the evolving landscape of the global energy sector, the recommendations and initiatives proposed by NCDMB and APPO underscore the importance of collaboration, standardization, and financial resilience in maximizing the opportunities presented by AfCFTA for the African oil and gas industry’s sustainable growth.
