HOUSTON/WASHINGTON (CI Africa) — Nigerian Minister of Petroleum Resources Diezani Alison-Madueke said oil companies should be required invest in non-natural resources private sector activities such as telecommunications (ICT), hospitals and manufacturing on a return on investment basis. [ Nigerian Minister of Petroleum Resources Diezani Alison-Madueke speaks to Capitol Intelligence using CI Glass at IHS CERAWEEK in Houston]
In an interview with Capitol Intelligence during the IHS CERAWEEK, Minister Alison-Madueke said that Nigeria had already set up a “template” with the Chinese for tying investment in non-oil activities with oil and gas exploration licenses and concession. The minister, with is also the alternate president of OPEC, said such a move would allow a country such as Nigeria to develop their non-oil economies and lower their dependence on oil revenues.
Not only is the Nigerian federal government working to better reallocate oil revenues but so are the country’s regional governors such as Akwa Ibom State Governor Godswill Akpabio.
In an interview with Capitol Intelligence at the Congressional Black Caucus Foundation annual convention, Governor Godswill Akpabio said his oil rich state is already using its local oil wealth to fund critical infrastructure in transport and energy generation and at the same time provide access to education and free medical care for some 1.9m children.
[Akwa Ibom State Governor Godswill Akpabio speaking to Capitol Intelligence using CI Glass at the Congressional Black Caucus Annual Legislative Conference in Washington, DC on Sept. 26, 2014.]
Governor Akpabio said he already formed a successful private-public initiative with Exxonmobil (NYSE:XOM), with US oil major currently helping the state increase its electricity generation capacity by some 5,000 megwatts.
Also speaking with Capitol Intelligence at IHS CERAWEEK, Total SA Chairman and CEO Christophe de Margerie warned that oil producing countries must be careful regarding their demands for local content as such initiatives can be counterproductive.
“Many times the local content cost double than what you find on international markets. It raises costs for the oil company but also lowers overall revenues for the country,” he said.
However, a senior World Bank official complained that Italian oil company ENI has done little to bring major private sector companies such listed highway and airport group Atlantia, Telecom Italia and Italcementi’s part of its massive USD 50bn investment in the country.
A growing number of oil minister are discussing using oil company’s non-oil investment as a “benchmark” to award new concession contracts and that they could follow the similar “off-set” programs used for defense procurement.
One OPEC oil minister complained that oil companies non-oil impact investments “are just bribes to NGOs” in North America and Europe. In an earlier interview Capitol Intelligence, Nigerian Finance Minister Ngozi Okonjo-Iweala said she believes that African governments and finance ministers need to work together to create a “White List” of best players and practices in cross-border private investment in frontier markets.
Minister Ngozi Okonjo-Iweala said the list would be compiled a best practice database of deals made by the World Bank’s International Finance Corporation (IFC), African Development Bank (AFDB), and the Islamic Development Bank (IDB).
[Nigerian Finance Minister Ngozi Okonjo-Iweala speaking to Capitol Intelligence using CI Glass during the US-Africa Leaders Summit in Washington, DC on August 4, 2014.]
Minister Alison Madueke also said she was more than aware of the power that major oil companies hold over international investment banks such as Morgan Stanley, Goldman Sachs and Citigroup. India’s Hinduja Group of Companies is already working in Nigeria to build a bus, rail and transport company and is looking at other opportunities in the strategically important markets of Libya. Tunisia and Algeria, Hinduja Group European Chairman Prakesh Hinduja told this news service.
Minister Alison-Madueke earned a BSc degree from Howard University, the historic African-American university of Washington, DC. She also worked as a design coordinator for Furman Construction Managment Inc of Rockville, Maryland.
By PK Semler in Houston and Washington, DC. For more information please call +1202-549-3399 or email firstname.lastname@example.org
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