Local Content Promotion Is Not Opposed To Trade Liberalization – Wabote
By YANGE IKYAA
Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, has said that local content promotion in the oil and gas sector does not connote any opposition to trade liberalization.
Wabote stated this Thursday in Lagos during the 9th Anniversary Lecture of Real News Magazine, where he presented a paper titled “Nigeria in the Unfolding Integration of African Market: The Oil and Gas Sector Perspectives.”
He said revenues obtained from the sale of resources constitute key drivers of the economies of the African oil and gas producing countries, while also stressing that Africa’s industrialization agenda is at the heart of the African Continental Free Trade Agreement (AFCFTA),
The NCDMB helmsman further explained that, having taken effect from the 1st of January 2021, AfCFTA has turned Africa into the world’s largest free trade area, connecting 1.3 billion people with a combined GDP of about $3.4 trillion.
“A country must be allowed to protect its areas of comparative advantage so that it can be utilized to trade for what it lacks. Discouraging local content laws and practice in the name of free trade is like fostering one-way trading which is not sustainable”
He added that AfCFTA was meant to address the low intra-regional trade in Africa, which is estimated at 17 percent, compared to 69 percent obtainable in Europe and 59 percent obtainable in Asia.
According to him, “a country must be allowed to protect its areas of comparative advantage so that it can be utilized to trade for what it lacks. Discouraging local content laws and practice in the name of free trade is like fostering one-way trading which is not sustainable.”
This is due to the fact that no nation is blessed with the full list of natural resources that can enable it produce every product it requires.
However, Wabote said the African oil and gas landscape provides huge opportunities for cross-border infrastructure to unlock the development of stranded assets and bring energy closer to the people. The presence of such infrastructure also leads to lower costs of development.
For instance, infrastructure like the West Africa Gas Pipeline (WAGP) and the ongoing AKK gas transmission infrastructure can serve regional markets in West Africa and the entire Sahel region, while the SHI-MCI Yard in Lagos can serve the wider African market, being the only FPSO integration yard infrastructure in Africa.
He also confirmed that Nigeria had established collaborations with countries like Angola, Ghana, Siera Leone, Senegal, Kenya, Mali, Mozambique, Niger Republic, and Uganda in furtherance of local content development in the partner countries.
Wabote also described energy transition and the threat that investments on hydrocarbon development projects could be withdrawn as a challenge for oil producing countries to address.
He hinted that AFCFTA provided a platform for member countries to collaborate and provide funding and the technology to operate and develop hydrocarbon projects, while calling for investment-friendly laws such as the Petroleum Industry Act (PIA) 2021.
This, he said, is necessary for attracting the much needed funds for project developments and for increased in-country hydrocarbon resource utilization through massive refining and production of petrochemicals.
