Uche Cecil Izuora
Industry analysts and energy experts have said that the African continent must retain its core value from its vast hydrocarbon resources promoting use of gas as a transition for indigenous participation in the energy sector.
They said that Nigeria’s oil and gas industry over the past decades has transformed through the efforts of some its professionals who have worked assiduously to bring it to fruition.
In his keynote lecture at the 23rd Aret Adams annual memorial series, The Managing Director/Chief Executive Officer, Financial Derivatives Co. Limited, Bismarck Rewane described the Africa Energy Bank (AEB) as tectonic because it will finance Africa’s energy plan due to an energy crisis, not just in Nigeria, but across the global.
Africa has to finance its energy ambitions using domestic resources and aligning policies.
Bismarck pointed out that the continent has nearly $4 trillion in domestic capital but lacks strategic deployment which is why Africa energy bank should be enhanced. The key step towards Africa energy financing through the institution is to bolster energy and investment across the continent.
He recalled that the Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri who stated clearly that the Africa energy bank is a solution to Africa’s energy finance challenges. The continent must retain its core value from its vast hydrocarbon resources with the aim to reduce energy poverty, promoting the use of gas as a transition for indigenous participation in the energy sector.
Notwithstanding, there is an energy crisis in the world.
Bismarck stated in his keynote lecture that one common thing is that whenever there is a revolution, global GDP and output is dramatically substantial and escalates to other areas like electrical internal combustion engines and computers. Hence, it cannot be reversed.
There was a quantum leap in the difference between rich and poor, as it increases, it leads to insecurity, violence and crime.
“We must have resources to grow and to make sure that this economic revolution continues. Revolution has increased demand for energy and power.”
Although there is a natural gas reserve in Africa, its first global position is crude oil reserves. Africa is second globally in terms of coal, wind, solar, water and hydro reserves. There is an energy mix.
The renowned economist noted that World Bank group committed $100 billion to energy over the last decades, targeting 300 million people with electricity access in sub-Sahara by 2030 unfortunately; the country with the lowest energy consumption in the world is Nigeria.
Nigeria wants to become a $1 trillion economy, but fundamentally, this cannot be achieved due to energy gap. The World Bank has been emphasizing that the European Investment Bank invested 160 billion euros over the past decade in renewable for energy efficiency.
Producing energy is one thing but using it effectively to change economic outcomes is also a significant process.
Another issue with Africa Energy Bank, if the resources are not well managed efficiently, the outcome will be negative, Bismarck warned.
He said other OPEC countries have used their resources efficiently.
Nigeria utilization ratio is 1.37 and during the days of Aret Adams, the country was producing 2.32 to 4 million barrels per day but presently it is producing 1.41.
Speaking further, in the global energy mix, oil is 30 per cent coal is 26 per cent, natural gas 24 per cent while renewable is 50 per cent and its cost is cheap.
Nigeria has issues with its power and had spent millions of money trying to solve energy deficiency which launching of energy bank may not resolved, if management is vulnerable.
He spoke on Nigeria’s reserve which is about $7 million compared to Saudi Aramco that is almost $2 trillion, if the sovereign wealth funds of other countries are brought together, it will reveal true status of Nigeria that it lag behind.
Bismarck asked what Nigeria’s NNPC has done for the country between 40 to 50 years of its existence? For instance, if the Yar’Adua’s administration had not returned Dangote’s money when he bought the refinery, the country would have made fortune out of it.
In his future projection, Bismarck stated that effective electricity generation, mix of solar, wind, hydro and gas, regional power interconnectivity are some of the solutions.
He said if the energy problem is fixed, it will increase the country’s GDP growth.
Notwithstanding, proper connectivity and transmission will solve issues of power and it has been proven that solar usage is helpful in public places.
Strategic energy planning for long term in less than five years can transform the economy, Bismarck added.