How to reflate Nigeria’s economy – Kachikwu, Adeosun, Udoma, Enelamah

According to reports, the Minister of State for Petroleum, Dr. Ibe Kachikwu, has identified seven key implementation strategies to boost the petroleum industry and enable export of refined products by 2019.

Kachikwu-ibe

Kachikwu announced this at the Presidential Quarterly Business Forum between the Private Sector and the Economic Management Team in Abuja on Monday.

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Represented by Johnson Awoyemi,, the Senior Technical Adviser of the ministry, the minister identified peace and security in the Niger Delta region as crucial in the programme.

Kachikwu mentioned policy and regulation; business environment and investment drive; transparency and efficiency; stakeholder management and international coordination as primary concerns of the ministry.

The others, he said were engaging in gas revolution as well as increasing refineries and local production capacity.

Kachikwu said: “Oil and gas will drive diversification but the drop in oil production to 1.56 billion barrels per day from the annual estimate of 2.2 billion barrels per day will negatively affect growth.”

The minister stressed the need to empower the Niger Delta region and ensure peace in the region by stopping militancy in enhancing the attainment of national aspirations in oil and gas production.

Kachikwu said a lot of companies in the sector were indebted in payment of royalties, adding that the companies were in default to the tune of about $4 billion.

He said there was the need for policies on oil, gas, downstream and fiscal reform, adding that the proposed petroleum industry bill had become very imperative.

Kachikwu said there were challenges in the oil and gas sector, which led to drop in the nation’s GDP growth from 6 per cent to 4 per cent.

The minister said this had led to shortage of funds for providing critical infrastructure.

He explained that there was 29 per cent decline in oil production, which amounted to a loss of 700,000 million barrels per day.

Accordingly, there was 32 per cent decline in gas production from 8,000 million cubic feet per day to 5,500 million cubic feet.

Kachikwu announced that 3,000 pipeline vandalism incidents were recorded from 2010 to 2015, while 643 million litres of petroleum products, amounting to N51.28 billion, was lost in 2015 alone.

The minister explained that between January and June 2016, the ministry recorded 1,600 vandalism incidents in spite of efforts to boost local production and refining of products.

He also said: “Until we are able to locally refine what we produce, we won’t be able to go forward.

“It is the plan of the ministry that by 2019 the country has to export Premium Motor Spirit.”

Kachikwu advised investors to embrace the ministry’s policy for creating modular refineries and asked them to come up with proposals.

He noted that some successes were recorded in the oil and gas sector since November 2015, including the elimination of subsidy payments yielding N15.4 billion monthly savings.

Kachikwu had started the liberalisation of downstream sector with 47 per cent reduction in PMS truck loads and signing of $80 billion MOUs at the China Investors Roadshow in June 2016.

The minister said plans were on to increase oil production to 1.8 billion barrels per day by October and to two billion barrels by December.

Also, the Minister of Finance, Kemi Adeosun, said the Federal Government had released N720 billion into the economy so far.

According to Adeosun, the administration has released N420 billion for capital projects, will release additional N350 billion to Ministries, Departments and Agencies this week and ready to release another N350 billion in November.

Adeosun said the administration was targeting real GDP growth in 2017, rapid infrastructure development to drive the economy as well as diversification and growth of non-oil sector.

She added that government was concerned about improving the overall business environment as well as key socio-economic indicators.

In another paper, the Minister of Industry, Trade and Investment, Dr. Okechukhu Enelamah, said Nigeria remained the best industrial hub in Africa.

Represented by Aisha Abubakar, the Minister of State, Enelamah said the country plans to move from 169 to 100 in the ease of doing business ranking in three years.

The Minister of Budget and National Planning, Senator Udoma Udo Udoma, said the administration was making efforts to pull the country out of recession through injection of funds into the economy.

Udoma said the funds would come through asset sales, advance payment for licence renewals, infrastructure concessioning, use of recovered funds and other means to reduce funding gaps.

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10 Comments

  1. To put the fact straight, oil production should be in million barrels per day and not billion barrels per day. To be more precise, production fell from the targeted 2.2 million barrel per day to 1.56 million barrel per day due to disruptions caused by militants in the Niger Delta.

  2. Thank you Mr Whyte for reading between the lines. I figured out that this was either exaggerated or intentionally put forward to mislead us. This is where the media play a key role. However, the analysis was not bad but my concern is when would the masses feel the impact of all the money put into the economy? Effort should be targeted on staple foods that common man can buy to sustain and survive. Kudos to this team and we need more hands on deck to revive the deflated economy.

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