By Idang Alibi
TODAY March 14, President Muhammadu Buhari is expected to formally declare open the 33rd Ordinary Session of the African Petroleum Producers Association (APPA) and CAPE VI Exhibition, which is considered Africa’s most strategic oil and gas meeting, at the International Conference Centre in Abuja. The conference will last for three days. Experts who do the leg-work aspects of such international meetings have been in Nigeria in the past one week preparing the ground for their ministers and heads of delegation to deliberate and take decisions on crucial issues affecting the organisation.
APPA is made up of 18 member countries namely Nigeria, Algeria, Cameroon, Gabon, Niger, Chad, Congo DR, Congo Brazzaville, Angola, Mozambique, Mauritania, Libya, Coted’Ivoire, Equatorial Guinea, Benin, Egypt, South Africa and Sudan. APPA was formed in January, 1987 in Lagos, Nigeria at the instance of Nigeria and seven other African petroleum producing countries: Algeria, Angola, Benin, Cameroun, Congo Brazzaville, Gabon and Libya. From this humble beginning, the association now boasts of its current 18 members with three or four others seeking to assume observer status. Chances are that in the next five to ten years all African countries will become APPA members as oil and gas would have been discovered in commercial quantity in all of them!
For the first time in the 28-year history of the organisation, Nigeria assumed its presidency only last year. The idea of the founding fathers which gave birth to APPA was the need to promote cooperation among member countries in hydrocarbon exploration, production, refining, petrochemicals, manpower development, acquisition and adoption of technology and others.
How far have these noble objectives been accomplished in the past 28 years? What impact, if any, has this organisation had on the peoples of Africa from whose countries crude oil is extracted? If this organisation did not exist, would the economies and standard of living of the peoples of APPA countries fared worse or better? Is APPA relevant or has it tried to be relevant to Africa? These questions and many others may not be asked and answered directly in the way they are posed here, but in one form or another, they will prop up or intrude for deliberation at the event.
One of the facts which help to give an indication as to whether or not APPA is relevant is the truth that even in Africa and even among some elite who ought to know, APPA is known more as the OPEC of Africa than by its own original name! This circuitous definition of APPA by a higher and better known organisation, should be food for thought for those at the helm of affairs of APPA. African crude oil producers account for 12 per cent of the share of world oil production. Yet, of all the regional oil blocks, APPA is the least known and the least respected because of the lack of cohesiveness and assertiveness on the part of this block.
The theme of the Abuja conference is “Positioning the African Oil and Gas Industry through Value Addition for Global Development”. This theme could not have come at a better time as petroleum producers world-wide are gasping for breath following very unsavoury development in the oil market; the most unsavoury is the sharp fall of crude prices in the international market creating huge revenue shortfalls and foreign exchange difficulties for many countries including African crude producers. One of the major issues then that is expected to top the agenda of the meeting is how to shore up the prices of crude. Nigeria, Africa’s leading economy and leading crude producer, has been leading the fight for a rally in oil price on behalf of Africa.
Three weeks back, the Minister of State for Petroleum Resources and GMD of the state owned NNPC, Dr. Emmanuel Ibe Kachikwu, was with President Muhammadu Buhari in Qatar and Saudi Arabia to lobby the two leading producers with large reserves to cut production in order to shore up the prices. Nigeria has also been working with Venezuela and Russia calling on producers to close ranks for their common good and the good of the economies of the world. The respite we are getting now in terms of the rise in price to about 40 dollars per barrel is the dividend of the concerted efforts by Nigeria’s oil minister, Ibe Kachikwu, and his counterparts from Venezuela and Russia.
The social tension created by the sharp decline in the price of this main revenue earner of almost all of these countries is something policy makers and executors are having sleepless nights about. Sacking or threat of massive sackings of public and private sector workers as a result of the downturn in the fortunes of oil dependent countries is another issue the political masters of APPA countries have to pay attention to.
From the negative fall-outs, the council of ministers has to set out urgent steps to address what is popularly called the ‘resource curse’. Norway and some other ‘reasonable’ countries have used their black gold well and are not suffering from any resource curse of any kind. African countries blessed with crude oil or any money-spinning gift from God can use them well, if they resolve to do so. We in Africa should endeavor to use our God-given endowment well and not turn around to more or less blame God for blessing us.
APPA countries are fond of mouthing diversification of their economies away from crude oil but very little has been done over the years among them in that direction. The time for a forced change has come. It is common knowledge that most APPA countries have not been prudent in the spending of their oil wealth over the years. The good thing, therefore, about this sudden turn of events for the worse is that it will act as a very much needed jolt to them to turn a new leaf and think of investing wisely on projects that have regenerative pay-off on their economies.
For many African countries, the sharp fall in oil prices is a tragedy long foretold so what has befallen them cannot in all honesty be described as a rude shock. The truth is that not many prepared for the gathering storm when the USA, the world’s leading economy and greatest consumer of energy resources, was feverishly exploring and exploiting shale oil and gas. Today, with the USA as a major player in the global oil trade, the crude oil market is suffering a glut of about three million barrels per day.
The theme of the Abuja meet is particularly most appropriate because many African crude producers are not getting great value for their black gold because they export it raw without refining and getting the by-products. The crude oil industry in much of Africa is a capital intensive venture with great revenue earning ability but is unfortunately not a great creator of jobs. This accounts for the yearly growth in GDP often credited to some of these countries but the high level of unemployment in them.
. Alibi is the Director, Press and PR, Ministry of Petroleum Resources, Abuja.