‘Nigeria Sustains Campaign to Host African Energy Bank’ ― Lokpobiri

By Patience Chat Moses

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has expressed optimism that Nigeria may receive the nod to host the African Energy Bank (AEB).The bank, he said, is key to driving the necessary investment needed to boost the country’s oil production and increase government’s revenue.

According to him, “for the African Energy Bank, we are running with Ghana. It is now between Nigeria and Ghana on which of them will be able to get the headquarters of the African Energy Bank.”

Lokpobiri, while speaking at an energy event in Lagos suggested partnership with banks in the country.  “The African Energy Bank starts with $5 billion. If we have it in Nigeria, in four to five years, it will grow to about $120 billion. Imagine what that will do to the GDP of our economy.”

He urged all stakeholders to make efforts to ensure we get the headquarters of the African Energy Bank to Nigeria. “We should put funds into our banks to make them strong enough. As a government, we will do everything globally possible to attract the desired investments. We are willing to remove all bottlenecks in the industry. The President has directed that we should remove all the bottlenecks. And that is why we are trying to remove the problem of OML425, the popular Malabu Oil Field”.

“If we don’t attract investments, this resource we have will just be buried under the soil with no value addition. I’ve accompanied the president to several countries of the world and I’ve heard him tell potential investors that, ‘bring in your money and take out your money at will’. That means, come and invest and divest at will. We are not against any company that wants to divest.

“If in the next few years, we are able to ramp up production and increase our revenue base, we will not necessarily need the big 5’s to monopolize our investment,” he said.

Lokpobiri  added that Nigeria is  willing to remove all bottlenecks in the industry as every country that has oil, prioritizes investment in the oil and gas sector, and “that is why as a government, the President has directed that we should resolve all problems we have in the industry.”

He explained that Nigeria has made concessions to other countries before. “African Petroleum Producers’ Organization (APPO) headquarters would have been in Nigeria, but former President Muhammadu Buhari conceded to the Republic of Congo. Other countries will pay us back by saying that Nigeria has conceded so let them concede to us this time around,” he concluded.

About half a dozen of key African countries initially seemed to have opposed Nigeria’s bid to host the African Energy Bank. Ghana, South Africa, Egypt, Benin, Ivory Coast, and Algeria, had mounted a resistance against the decision in favour of Nigeria. Although stakeholders support Nigeria’s bid considering that there are more than 600 million people in Africa without access to electricity and some 900 million without access to clean cooking fuels; many of these are in Nigeria, which is the largest oil producer on the continent. This makes it a logical candidate for the African energy bank which will have an initial capital of $5 billion.

A Nigerian Economic analyst, Professor Omowunmi Iledare, suggested that Nigeria stands a better chance of hosting the AEB as it is endowed with available natural resources that will enrich the banks activities. Also, in an exclusive interview with Valuechain, the Secretary General of the African Petroleum Producers Organization (APPO), Omar Farouk, while commenting on whether Nigeria stands a chance of hosting AEB, stated that, the Africa Energy Bank is a project of eighteen member countries of APPO and Afreximbank.”Nigeria is a member like any of the eighteen countries and for countries that showed interests, sets of criteria for selection have been set. Whichever country that gets the criteria right will get it,” he noted.

Farouk noted that Nigeria is a leader in the oil and gas industry in Africa as the biggest producer with the largest population, but Nigeria should not take things for granted. Speaking on some of the criteria required of intending host countries, he said a country has to pay its subscription, provide APPO with the Headquarters of the bank, fully furnished. Also, a prospecting country has to ratify the charter of the bank and the host country agreement. “These are the key items- the rest are, that the country must provide an enabling environment for banking operations,” he concluded.

The concept of an African energy bank originated with the African Petroleum Producers’ Organization, with help from the African Export-Import Bank. The new institution is seen as essential for the future of the African energy industry as it is expected to provide financing for projects that international lenders are shunning for reasons related to the energy transition. The Africa Energy Bank is expected to boost the host country’s economy.

Having conceded the APPO headquarters to the Republic of Congo and losing the bid for the AfCFTA secretariat to Ghana, Africa’s largest oil producer fails to secure hosting the multilateral institution.

While some of Nigeria’s policymakers are still confident that the country will become the host of the continent’s latest multilateral institution, Africa Energy Bank, Ghana has emerged as the favourite, according to some insider sources, having met most of the criteria set by the committee in charge of taking the decision.