By Sebastine Obasi
The much needed investment in Nigeria’s downstream sector may continue to elude the nation’s dwindling economy unless government takes necessary steps to convince investors, Mr. Tunji Oyebanji, Chairman, Major Marketers Association of Nigeria, MOMAN said.
Speaking at a webinar conference organized by the Association of Energy Correspondents of Nigeria, NAEC, Oyebanji, who is also the Managing Director, 11Plc, stated that the passage of the petroleum industry bill, PIB and full deregulation of the downstream sector would usher in torrents of investments in the nation’s oil and gas sector.
“Investors were not encouraged to invest because our market was not deregulated and there was lack of governance policy and regulations. Deregulation is a win-win for the Nigerian consumer, we as industry stakeholders and the country as a whole. “In 2019 alone, about N752 billion was spent on petrol subsidy.
“Now that subsidy has been removed, government should deploy the funds on road construction, healthcare, education and other areas for the benefit of Nigerians,’’ he said. He also said that the removal of petrol subsidy had discouraged smuggling of the product across the borders as it has reduced the undue demand for scarce foreign exchange.
Oyebanji explained that MOMAN wants government to provide a level playing environment, so as to attract genuine investors in the downstream sector. “Deregulation works best when there are many players. The competition will help drive lower prices for the benefit of Nigerians. “A situation where some people get forex at a cheaper rate than others to import products will only create a monopoly,’’ he said.
Highlighting the benefits of subsidy removal, Oyebanji stated that government would be in better position to provide basic amenities which have been elusive to the citizenry. He said, “In some estimates, the money spent as subsidy could have built 16 million boreholes, one million classrooms, 300,000 fully equipped primary healthcare centres, over 20,000 kilometres of roads, 27,000 megawatts of solar electricity, 600,000 houses, all from this money. And the list goes endless. “You can talk about equipping universities, you can talk about equipping the police force, so many different things we could have done with the money.”
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He also added, “The question at the end of the day is that we are making a choice that rather than spending money on these things, we were spending money on subsidy. “I will not say that is the only wastage we have in the economy. There are still obviously other areas of wastage. However, it is clear that subsidy was a big drain on the economy and we were now in a position where we could no longer afford it,” he added.
The webinar, the first in the series, was held to analyse the econometrics of the challenges and impact of a deregulated downstream sector on Nigeria’s economy, Ugo Amadi, Acting Chairman, Association of Energy Correspondents of Nigeria, stated.
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