Nigeria govt plans $10 billion Niger Delta infrastructure fund
The federal government is planning to launch a $10 billion infrastructural investment programme in the Niger Delta.
President Muhammadu Buhari made this known on Thursday in Abuja during the unveiling of the Seven Big Wins roadmap, a short to medium term strategy framework to grow country’s oil and gas sector.
The president said he would be holding a crucial meeting with leaders from the
region next week Tuesday to dialogue on a number issues as part of efforts to end the agitations from the oil-rich region.
The region has been a hotbed of crises for some time, particularly from armed groups led by the Niger Delta Avengers pushing for more share of the oil resources from the area.
Attacks spear-headed by the groups have been noted as one of the most troubling factor behind the country’s dire economic crisis.
Although the massive drop in global crude oil prices plays a significant role in the crisis, attacks on oil facilities by militant groups have worsened the situation, resulting in cut by almost half of the country’s crude oil output and exports.
From an average of over 2.1 million barrels production capacity a few years ago, oil production has since been run down to less than 1.1 million barrels, with the critical export facilities, including the Forcados export terminal constantly shut down due to incessant sabotage.
The president said the government was fed up with the situation and was committed to reverse the trend, by ensuring security in the region.
He said this was the only way to reassure not only the people of the region, but also oil companies, prospective investors, individuals ready to invest in the infrastructural development of the region.
“Niger Delta security is key to our development priorities,” Minister of State for Petroleum Resources, Ibe Kachikwu, said at the unveiling.
“On Tuesday, the president we will be meeting with the Niger Delta stakeholders of oil producing areas. It is important we continue to sustain the institutional engagement and negotiations that are key to do this work.
“Our target is zero militancy by middle of 2017, and an incident reduction in the region by 90 percent by 2018.
“Whatever shutdown experienced by middle of next year, we expect it to be production stoppages and not militancy issues. We must resolve current militancy problems ad bring back oil production to 2.2 million barrels per day.”
The ‘Seven Big Wins’ is a roadmap for short to medium-term priority programmes by government to drive the growth of the country’s oil and gas Industry.
Although the minister said the country actually has the capacity to produce over 3 million barrels of crude oil per day, the country was limited due to inadequate funding.
“We are working with the oil sector players to begin to find solutions to our cash call problems. We need to create stability incentive schemes, jobs and investment opportunities in the Niger Delta zone,” the minister said.
To foster transparency in cash calls, Mr. Kachikwu said the government was introducing a joint account with oil companies to ensure inflows were clearly understood by all.
“We are targeting 30 per cent cost savings, which we can link to transparency” he said.
On the planned $10 billion infrastructural rebirth investment initiative, he said it would not be tied to the budget, as the government would look at cross border investments to strengthen the region.
“What is most important is not the amount of the fund; it’s the conceptualization of that funding. Governors will have to come together as a regional
block to look at cross-state investments in roads, railways, town facilities or specialist hospitals.
“We are going to pool in energy and ensure we look at cross border investments to strengthen the region” he said.
He said government was also looking at the amnesty programme, which is winding up in about one year, particularly in the areas of coastal patrol, Niger Delta paramilitary type organizations, to absorb some of the trained hands from the programme as well as funding for those who want to start up their own businesses.
To ensure business and investment drive, he said government was seeking to raise more funds through leveraging on assets private sector exploration of the Lake Chad basin.
“My vision is to encourage private sector to go into Lake Chad basin and find oil. We are targeting to raise over $5billion in short term funds for this, and over $20 billion in medium to long term funds.
“We need to cut contractual times for average of two years to average of three
to six months. We need to reduce government stronghold on the oil sector, so that the private sector can flourish grow in leaps and bounds” he said.