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Economist wants African countries to develop other economic sectors now

Dr. Ibilola Amao is a renowned economist, career counselor and the Principal Consultant of a private company, Lonadek Oil and Gas. The economist participated at the recently concluded CAPE VI African Summit, where calls were made on oil producing countries in African to take advantage of the global oil slump to re-discover and re-invent ways of properly tapping into the neglected God-given oil resources in Africa by exploring ways of diversifying their economies.
Dr. Amao, who graduated from the prestigious Manchester Business School in this encounter with our correspondent, Cyril Mbah described dependence on crude oil economy as a fading tradition and recommended that countries like Nigeria that are over relying on oil for their revenue must now begin to refocus their energies and investments on other untapped, relevant sectors for solutions to lingering economic problems. Excerpts.
CAPE VI event has come and gone, as one of the paper presenters at the forum, how would you rate the event in terms of current realities in the oil and gas sector?
The CAPE VI event is a forum for African leaders, especially for countries engaged in oil and gas production over the years. The forum ensures that African countries collaborate beyond their borders within the scope of the African Petroleum Congress goals and objectives. The practice has been that most African countries export crude rather than finished products.
The fact that oil is less than $40per barrel is a wake-up call for everybody to look at the value chain and focus on the downstream as well as the midstream which are yet to be exploited. This fundamental change signals going into refining, petrochemicals, gas and power. Only then can we power up industries and stimulate the industrial revolution required by various African countries to become exporters of finished products.
How feasible is the attainment of such goals considering the economic hardship that the fall in oil price has brought among member countries?
I think the major problem particularly in Nigeria, is our inability to identify with our history. This is why I made it clear in my presentation that before 1952, there were main sources of wealth attached to specific tribes in Nigeria; the Hausa, the Igbo, the Yoruba, the Tiv, the Jukun and others specific tribes within the six geopolitical zones were known to produce something of value.
In that era, there were areas of specialization; we had cash crops and mineral resources that were being exploited and processed at the same time. I think it is high time we begin to review our strategies and adopt better processing technologies, so that we can process all our raw materials and begin to export them to the outside world, thereby creating jobs and wealth for Nigerians.
Can you say the present administration is doing enough to make this a reality?
In fact, I admire the present administration. The government has initiative. It is not dolling out cash irrelevantly without any tangible return on investment visible to them, and they are telling all Nigerians who are ready to listen to look inward; buy Nigeria, create jobs, create value. The message is clear, realistic and very apt especially because of the current budget deficit that we found ourselves into due to low pricing of oil. I believe the current government will be instrumental to fixing and shaping things up.
Does that mean the down-turn in the global oil price is a blessing in disguise?
Absolutely! I can tell you that we cannot believe our luck because this is an opportunity of a lifetime which would compel us to stop wasting our resources selling crude which is next to nothing. We need to put our heads together, re-strategize, plan and identify within the entire nation, primary and secondary resources from all the six geopolitical zones, thereby ensuring that we make oil and gas a tertiary wealth generation resource.
It is possible that some of these states are not economically viable. If possible, we could reduce the number of states. We do not need to maintain thirty-six states that are not viable. We can then start putting back the revenue generated from oil and gas into a sovereign wealth fund, so that we can ensure that every state generates enough revenue to sustain itself and stop depending on the center for resource sharing. Every state must be viable, we must all look inward to revive the economy through other natural resources and the available cash crop we have in states.
But what do you advise Nigerians to do to quicken the process since cocoa or palm trees for example do not grow in one year?
I need to stress the importance of patience to every single Nigerian. Impatience or the short term quick-fix orientation will make us remain at the operational level. If we are to play at tactical and strategic level, we must then think about medium term and long term. The developed world are strategic, they plan for long periods of up to thirty, fifty and hundred years and benefit from returns on their investments while Africa is more or less relegated to the position of providing raw materials for their industries to grow at the detriment of ours. Furthermore, we import virtually everything from them. This is the time for us to sit down, patiently re-access our situation and begin to think and rethink our strategies like business minded people; we have no choice right now.
Many have accused President Muhammadu Buhari of junketing around the world rather than staying back home to think over the situation on ground. What is your view?
First and foremost, I am a business woman; I travel where the money is. The leadership in Nigeria in the past eight-twelve years of our democracy has been depriving 170 million Nigerians of our common wealth; stashing cash that belongs to all into individual and offshore accounts. I think the President should do more travelling to get to the bottom of where these wealth are kept and to repatriate those he could at a time like this. He is also trying to understand the thinking of other world leaders Nigeria had done business with in the past, those who have invested in Nigeria in the past or those who tried to invest in Nigeria and those with investment plan for Nigeria. So, he is travelling to these countries trying to get these leaders and potential partners to align as well as understand how best they can create value for us so that at the end of the day we can collaborate with them when the investment climate is right.
Do you think there is the enabling environment for investors to come, in terms of infrastructure?
As mentioned previously, we have 25 Free Trade Zones (FTZs) that have not been fully utilized. This is a very good time for us to create hubs; trade parks, industrial parks and investment opportunities to attract Foreign Direct Investment. Apart from power, energy, infrastructure, agriculture need to be processed. These sectors need to be harnessed so that we can reduce wastage. I also think we need to get the equation of the infrastructure right, especially Power so that we can begin to process that which we are endowed with for onward transfer to the international market.
On local content, do you share the insinuation that members of the IOC are taking Nigeria for granted?
The IOC and its members are doing what they are supposed to do. On our own part, we simply have to be very strategic and clear. It will be better if we can actually design our own master plan. If we are lacking strategic master plan, we cannot optimize the goodwill and the resources that the IOC members are supposed to use for their corporate social responsibilities, commitments and compliance activities. If you do not have the master plan, how do you then get investors (willing or unwilling) to plug in, then synergize and synchronize the resources to create the maximum value for us? Every IOC is doing the little and the much they want to do, but it is to our disadvantage because if we have the master plan, we can tell all the IOC members where we want them to plug into, so that they can create maximum momentum. At the moment, I have not seen the master plan.
Would the PIB justify the master plan for local content when it is passed into law?
The PIB for me is just a white elephant project. It is a long story. I have always believed that we do not need more than two laws for the petroleum industry that will harmonise and optimise other laws that needed to be updated. I think the PIB was basically to compensate the communities that pose a threat to oil access and to ensure that Nigeria gets maximum return on investment from her hydro-carbon assets. The PIB has so many conflicting interests in it. Fortunately, we have a minister of the petroleum industry who is also a seasoned lawyer. I believe he knows what needs to be done; the shakeup in the NNPC is one step forward and he has already created an economically viable organ out of the NNPC.
What is your view on the recent unbundling of NNPC and the likely job loss that may follow?
I am in support of the commercialization, unbundling or restructuring of various divisions of the NNPC to ensure that NNPC becomes a profitable organization and accountable to one hundred and seventy million of us Nigerians.
What about the job loss phobia?
If every arm of NNPC is profitable and generating revenue, I think they will even employ more staff, what they have to do is to stop wastage, then shake up the lazy ones. As soon as the activities they are running create more value, the need to employ more staff would be inevitable. In the long run, this can only bring positive results.
Unemployment is biting hard on Nigerian youths, as a career counselor and motivational speaker, what is the way out?
First and foremost, we need career counseling in this country. Every Nigerian youth must identify their potential, talent and passion. If you know all these, you will be very useful for the society, and you will create maximum value and become an entrepreneur. The entrepreneur needs to meet the needs of people in their immediate environment and can then get paid for it. Nigerian youths operate in a wonderful environment which ensures that if you think hard; look around properly and identify multi-faceted and multi-dimensional problems in Nigeria, and try to resolve the problems, the challenges and issues with your potentials, talent and passion, you will definitely become a successful entrepreneur as long as you have proper guidance and support. That is why our establishment focuses on youth empowerment; women initiative, SME and supplier development. We are looking at entrepreneurship as a way out for the teaming youths.
Is this all that Lonadek, your organization does?
Lonadek’s vision is to identify, develop and engage Nigerian professionals, youths and locals in engineering and enterprise. It is our hope to also become a preferred local content advisory firm; building capacity, capability and competence in engineering and enterprise. What we do is actually resolving problems in emerging economies, training locals to meet gaps. We mentor, we coach, and we expose young people including women in the areas of Science, Technology, Engineering and Mathematics (STEM) among other areas. We help them harness their ideas into tangible business plans. We also work with them to access funding from financial institutions such as Bank of Industry, commercial banks and SME approved banks, so that they can turn their ideas into viable businesses through the development of bankable business plans and grow their enterprise into multinational or trans-generational businesses. Our focus is in the energy, power, oil and gas sectors and the development of infrastructure. We are also doing a bit of agriculture through the deployment of process technology.
What is the reach of Lonadek in creating awareness to get the youths to patronize the programmes?
We have impacted on the lives of over 50,000 Nigerian youths through the Vision 2020: Youth Empowerment and Restoration Initiative. The initiative is a fifteen year career counseling, industry awareness and youth empowerment initiative which commenced in May 2006 and would end on December 31st 2020. We hope to have impacted on atleast 100,000 youths with STEM by then. We do a lot of awareness creation and advocacy on the youths being the future of Nigeria at our corporate level and we have also established a STEM hub in Jibowu, Yaba where collaboration with African leaders in STEM and captains of industry including the Energy Institute UK and Google are active.By Cyril Mbah

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