Vice President, Yemi Osibanjo on Monday called for a re-twinkling of the African Petroleum Producers’ Organization (APPO) Fund in the same manner of the Organization of Petroleum Exporting Countries (OPEC) fund in order to attract investments from non-member countries.
This was even as Nigeria’s Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, emerged the President of APPO.
Speaking a the Extra-Ordinary session of the organization in Abuja, he noted that the APPO Fund is already undergoing recapitalization to fulfill its role.
He however advised that: “The financial model of the fund, for example, may need some re-tweaking. It could be remodeled after similar institutions that had succeeded, like the OPEC Fund, where of course as you knowm non-OPEC members can begin to invest.”
Extra-ordinary session of the African Petroleum Producers’ Organizations (APPO)
I would also want to talk about the APPO Fund For Technical Cooperation, which I am told is also undergoing recapitalization to enable it better fulfill the role for which it was established. The financial model of the fund, for example, may need some re-tweaking. It could be remodeled after similar institutions that had succeeded, like the OPEC Fund, where of course as you knowm non-OPEC members can begin to invest.
He insisted that the APPO fund ought to operate as an autonomous entity, independent perhaps, from the APPO secretariat, in the same way that the OPEC fund operates independently of OPEC itself.
The Vice President pointed out that “If institutions similar to APPO and the APPO Fund have succeeded and are continuing to succeed in other parts of the world, then we have no reason, no excuse to fail as a continent.”
The reminded the organization that oil and gas that are the global economies driver of today might not sustain their relevance in future.
He noted that consequent upon this realization, all serious economies all over the we have started planning for the world after oil.
His words: “We must keep in mind that oil and gas are only guaranteed as only 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 would not be as central or as relevant to the global economy as they are today.
“All serious economies around the world has realized this and are making determined plans for a world beyond oil or as they say a zero oil world. As African countries, we cannot afford to act differently.”
Osibanjo noted that that the oil and gas is capital intensive but as different countries they do not have the needed resources for investments in the industry.
He added that investments are competing with infrastructure and social services for the limited resources available to government.
He submitted that “By serving as a platform for increased collaboration and cooperation among member countries, APPO would go a long way towards helping overcome these financial challenges.
“Increased synergy would no doubt help mobilize the investment needed to facilitate and to deliver the major infrastructure required by the continent, such as trans-border gas and oil pipeline, joint refineries, gas plants and so on.”
Meanwhile, the Minister of State for Petroleum Resource, Dr. Emmanuel Ibe Kachikwu noted that there are new oil discoveries in the continent while finding oil finance has become difficult owing to tumbling oil prices.
He said that most countries now find it difficult to invest in oil activities in Africa.
The second aspect of the deliberation, he said, is to also approve the 2018/2019 budget which would be presented before the Council of Ministers.
Kachikwu said that “the realities that all over Africa, there are new finds of oil; massive exploration is going on. Everybody is enthused by the possibility of further harnessing new natural resources that we are going to use to develop the continent. “The reality also is that finding the necessary finance for this is very difficult. Increasingly, with what had happened, especially with the tumbling of oil prices, over the last few years, nice that is has begin to come up — a lot of investors found it difficult to invest, not just in oil exploration activities, but in fact, even worst still, oil exploration activities in Africa.”