To encourage increased local and foreign investment in
Nigeria’s downstream oil and gas sector, the need for the Federal Government to
prioritise the enthronement of a stable and predictable foreign exchange
policy, has been emphasised.
Stakeholders in the sector who made this call at the
just concluded Offshore Technology
Logistics (OTL) conference in Lagos last week, want the Central Bank of
Nigeria, Federal Ministry of Finance and Ministry of Petroleum Resources to
urgently address the challenges of foreign exchange (forex).
At the end of the conference, operators concluded in a
communiqué made available to newsmen a few days ago, that there is the need to
urgently review the administration of the current ineffective foreign exchange
intervention in the downstream sector in view of the timing gap between the
offer of forex and the opening of Letters of Credit, which often erodes the
value and usefulness of the offer.
The communique stated: “There is need for
government intervention by way of policy on LPG to facilitate its growth and
make it easily available and accessible. Full liberalisation and deregulation
of the downstream oil sector, with removal of all hindrances and bottle necks
are needed for the improvement of private investment and market competitiveness
in the industry.”
The communiqué signed by Chair, OTL Africa Advisory
Board, Reginald Stanley and
Chairman, OTL, Africa Downstream, Emeka
Akabogu, that it is imperative to establish and empower a strong
independent regulator to oversee activities in the subsector and ensure
implementation of open and transparent rules for the downstream value chain.
They said that it expedient that the Federal Government
formulate policies that will best serve the public and cushion the effect
militating against investment in the sector. To minimise or eliminate oil
theft, they said that security measures such as the oil and gas protection
squad should be implemented as soon as possible, together with full deployment
of technology and observance of international monitoring standards.
The communiqué noted that governments and private
investors should be encouraged to explore and undertake shared infrastructure
to ease movement of products particularly trans-regional pipelines and rail
connections. They stressed the need for government to expedite the passage of
the Petroleum Industry Bill (PIB), which should cover full deregulation of the
downstream sector.
The communiqué stated: “The Cabotage Act as well as the
Local Content Laws need to be optimised in implementation by The Nigerian
Maritime Administration and Safety Agency (NIMASA), and other regulatory bodies
in the downstream sector to ensure more participation of Nigerians.
“Payment of charges in foreign currencies by indigenous
operators to agencies like NIMASA, Nigeria Port Authority (NPA), Department of
Petroleum Resources (DPR) and others should be stopped forthwith and the Naira
prioritised as the means of exchange to maximize the value to ship owners and
improve competitiveness at the ports.
“Financial institutions should be encouraged to develop
special lending arrangements that will allow players in the downstream sector
access funds at single digit interest rate to facilitate and sustain growth.
“To streamline policy interventions, inter-agency
collaboration between key branches of Government is strongly advocated and
Government should identify supervisory mechanisms to harmonise policy
engagements. Government should urgently adopt a policy of low sulphur fuel
specifications Afri-4&5 to protect the health of our people and the
environment. Government needs to reduce the duty payable on the acquisition of
vessels by indigenous operators to make them competitive with their foreign
counter-parts”. (Gardian)
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