Vice President Yemi Osinbajo has called on African countries to diversify their economies and look beyond an oil-based revenue for future prosperity.
Osinbajo stated this in Abuja on Monday while declaring open the Extraordinary Session of the Council of Ministers of African Petroleum Producers Organisation (APPO).
According to the vice president, while oil and gas have continued to remain the mainstay of African economies, there is the need for the re-investment of oil revenues through diversification to prevent economic crises resulting from over-dependence on the product
“The lesson here is that, while oil and gas will continue to be critical to our revenue bases and our national economies, we must also redouble our efforts to achieve the following: “One, to diversify our economies away from the dangerous overdependence.
“And two, to ensure that we invest as much as is possible of today’s current oil and gas revenues in the infrastructure and human capital that will underpin future economic growth and development.
“We must keep in mind that oil and gas are only guaranteed as today’s resources, and not necessarily tomorrow’s.
“We cannot bet on the fact that even a few decades ago from now these natural resources will be as central to the global economy as they are today.
“All serious economies around the world have realized this, and are making determined plans for a world beyond oil or as they say a zero-oil wealth.
“As African countries we cannot afford to act differently.’’
Osinbajo observed that the oil and gas industry was a capital intensive one, noting that as individual countries, there was lack of the resources required to make the necessary investments to grow the industry.
According to him, this is especially so because these investments are competing with infrastructure and social services, for the limited resources available to governments.
He said that by serving as a platform for increased collaboration and cooperation among member countries, the organisation would go a long way towards helping overcome such financial challenges.
Osinbajo stated that increased synergy would help mobilize the investments needed to deliver the major infrastructure required by the industry, such as trans-border gas and oil pipelines, joint refineries and gas plants.
“Nigeria, as most of you know, is already leading by example, with our work on the West Africa Gas Pipeline Project, and the Nigeria-Niger collaboration on refining.
“In the increasingly interdependent world in which we live, greater levels of regional economic integration are required, allowing the free flow of the dividends of research and technology,’’ he added.
The Vice President also said that APPO needed to seriously look beyond public sector ownership of its activities and tap into private sector competencies and models to a greater degree.
Osinbajo praised the organization for embracing reforms of the sector to confront the challenges facing the organization and the choice of Nigeria’s oil Minister (State), Dr Ibe Kachukwu, to drive the reforms.
He gave the assurance that Kachikwu would not let the organization down having carried out some far reaching reforms in Nigeria’s petroleum industry to the admiration of the administration.
The vice president also harped on the APPO Fund for Technical Cooperation which was undergoing recapitalization to enable it to better fulfill the role for which it was established.
He stated that the financial model of the Fund might need some fine-tuning.
He suggested that the fund could be modeled after similar institutions that succeeded, such as the OPEC Fund to enable non-APPO member countries and private institutions to invest in it.
“The APPO Fund ought to operate as an autonomous entity, independent of the APPO Secretariat, in the same way that the OPEC Fund operates independent of OPEC.
“If institutions similar to APPO and APPO Fund have succeeded and are continuing to succeed in other parts of the world, then we have no reason, and no excuse, to fail as a continent,’’ Osinbajo stressed.