How Nigeria lost $30b to foreign-controlled monopoly
Nigeria may have lost in excess of $30 billion in the past 30 years to poor infrastructure and foreign- controlled monopoly playing out in the country’s oil and gas sector, stakeholders said in Lagos.
The experts, who gathered to discuss, “Pushing the Boundaries in the Development of Local Capacity and Nigerian Content in the Oil and Gas Industry,” at the March breakfast meeting of the Nigerian-British Chamber of Commerce (NBCC), were optimistic of the huge potential in the sector. They however demanded an urgent intervention to enable the nation develop local content in order to create desired growth.
The domiciliation of these jobs seeded to foreign companies would have added immense value to indigenous operators, while also enhancing their capacities and capabilities in executing usually capital intensive oil and gas projects.
Operating firms, particularly in the oil and gas logistics sector groaned that the sector had failed to keep pace because government allowed monopoly, which continues to deny growth of local capacity, limit participation of Small and Medium Scale Enterprises (SMEs), cripple globally competitive facilities and suppliers and other grave losses.
Guest Speaker at the event, who is also Managing Director of Lagos Deep Offshore Logistics Base (LADOL) Dr. Amy Jadesimi, said: “If you look at the oil and gas sector in the past 30 years, we have spent about $300 billion. Local content is around 10 per cent. That is $30 billion. Local content in Brazil is 70 per cent so if you think of the opportunity cost – the loss value, we have lost 60 per cent of that $30 billion, which is around $240 billion.
“Nigeria has the potential to be the hub of West Africa, so if you add the fact that we have not built the infrastructure to drive development and to get business from the whole of West Africa, that is possibly another $10 billion. So an excess of about $30 billion has been lost because we have allowed our industries to be dominated by foreign controlled monopoly.”
Jadesimi, who was very futuristic in her presentation, urged the government and players in the sector to enforce the law and policies and increase local collaboration to enable Nigeria take advantage of West Africa’s $200 billion market
“Our market is so huge that if you add a little bit of value you will realise a tremendous value, not just for investors but for your clients and even for the foreign partners that you are working with.
“We don’t have a level playing field because we still have people in the government, who want monopoly. There are people who are sabotaging the country economically,” she said
Chairman, Oil & Gas Sector Group NBCC, Aisha Abdurrahma, said Nigeria must find every means to develop the sector and retain the money lost to foreign players.
She urged players in the sector to appreciate contributions from local organisations, adding that effective strategy is needed by local players to meet international standard.
NBCC President, Dapo Adelegan, enjoined government to ensure that the daily crude oil production of Nigeria hit a three million mark by 2020.The President also sought the creation of technical institutions that would enable young Nigerians acquire necessary skills that would help them participate in oil and gas businesses in the country.