Nigeria is the largest oil producer on the African continent. Oil contributes over 70 percent of revenue for the country. However the petroleum industry in the last five decades continues to underperform despite its huge potentials. Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources assures that Nigeria would be self-sufficient in oil by 2019 in this interview on BBC hard talk. BusinessDay’s Kelechi Ewuzie followed proceedings. Excerpt:
Nigeria remains dangerously reliant on oil.
Yes clearly over reliant, I look at the positive sides of oil in terms of what it has done to the country over the years. But we would love to see a lot more diversification with emphasis on agriculture; tourism areas and emphasis on service.
Obviously, we have neglected for quite some years the need to take diversification seriously and we need to go at it full steam.
Nigeria’s diversification agenda and the impact of slump in oil price amid recession.
The numbers are getting better. Quarter to quarter, we are beginning to slide back out of recession. In the 4th quarter of 2016, numbers move to about negative 2 percent to about 1.63.
The reality is that almost a 60 percent decline in oil income which we have substantially been dependent on over the years would have its impact especially when you consider all other uncertainties and inefficiencies in the Nigerian economy.
I look at the difficulties that come with the slump as an opportunity to get serious. In the 20 to 30 years, Nigeria just keep postponing the evil days. What can we do in the absence of global oil prices hitting the roof? We are never going to have that happening again. So everybody is getting conscious of that.
There is a very conscious effort by the president and his team to focus on what we need to do to be less reliant on oil and be more efficient in spending what we have.
Foreign exchange challenges.
I think we are working progressively towards getting out of that. If you look at the differences in the price of foreign exchange officially versus the black market, it has moved from the high point of N530 in the black market to a current low of N 370.
The reality is that we have little foreign currency in our hands. We had a lot of massive demands for it and most of them were going to luxury goods which we couldn’t afford as a growing nation.
What I believe Central Bank did in the first one or two years was trying to force people away from that consumption culture. They have succeeded quite substantially. Now that they have, CBN started releasing foreign exchange into the market.
As a minister in this government, what is the state of the health of president Buhari? He is undergoing hospital treatment in London. Have you seen him, have you any idea of what is going on?
Yes the president is in London and he is undergoing hospital treatment. I don’t have details of that. I wouldn’t obviously know, but let me say this, when he returned from his first trip, he worked full steam. Although he is back to London; he still continues some level of meeting and is available to play some roles. He has a very efficient vice president, who is sitting for him in his absence.
I think that Nigerians know that the president is not too well. I don’t know what his illness is. Let’s face it, who in the world goes around giving out what their medical status is? The president is working through this; it has not become a major problem. If it gets to the incapacity level, obviously Nigerians would know a lot more.
We have heard rumours in Nigeria about sick president off and on. Would Buhari be able to lead Nigeria? Well I think so looking at the sort of conversation I had with him previously. I had a lot of interactions with him when he came back from London from his first medical trip.
Nobody plans an illness, it happens. But Buhari has an efficient number two man. The system works and that is the whole essence of democracy. He is on top of his ability to be able to issue policies and be able to approve what he needs to approve.
Your oil output level is roughly 2 million barrel a day and its miles away from your grand ambition of 3 million barrel a day. What went wrong?
The short term answer to this situation is that the militancy actions in the Niger Delta disrupted pipelines and production and got us the slump that you saw. It has taken a lot of work from me, the minister of the Niger Delta, a host of others including the vice president to get that back on track.
The success of this has simply been based on engagement. I have always said that what the Niger Delta situation requires is simple respect and engagement. I have being very intense about engagement since I was appointed, the vice president has joined me in that. The president has authorised that and we have seen a dramatic bold face as soon as we did that.
What had happened in previous times was that the militants got the impression that nobody was taking them serious or listening to their problems. I am going to be holding that engagement continuously in terms of trying to provide some economic blue print. So that was the short reason why we had a decline.
In term of whether we could have met our national goal of 3 million or 3.5 million to which I am very committed to. The problem had been that we had not focused enough on long term plans of investment and infrastructure rebirth. Those are the things we now need to do even though this is very difficult time to do them.
As an insider, are you ashamed of what has happened in the Niger Delta?
This may be shameful, but when you look at every oil producing country in the world, you have the same similar neglect. I don’t know why that happens maybe we take it for granted that once we lift the oil that settles it.
This not just about the national government, the oil companies are there also involved because bear in mind that 80 to 90 percent of our oil are produced by established oil companies.
It time we require some level of transparency and engagement from these oil companies also and not just from government alone.
We have not done well in the past on this; I think we could do better. In the last 10 years over 40 billion have been sunk into that region. But where is the money? A lot of it was siphoned out. Money meant for the region has been taken out.
This is why the President’s main focus when he came in was fighting corruption aggressively. I think that if there is one area that Buhari is focusing his attention on is just dealing with the whole corruption challenge.
Take on Petroleum industry bill.
The current bill that you have is actually a member bill and not from the executive. The executive including myself have cooperated as much as we can in term of giving data that is required for a sound bill.
Yes there is intent to try and put a lot more in the Niger Delta. Giving the fact of the scarce resources there would always be grumbling in terms of how it is applied. But when I meet with them, I see a commonality of purpose. I see that what has happened in the Niger Delta has hit everyone and everybody is making attempts to try and find a solution.
One quick win is to try and enhance the ability of other component states to be able to stand on their own economically including finding sources of oil in the North which we are also engage in.
We are doing a lot of collaboration despite the disagreement in terms of what the percentage and number would be. But I see a lot of focus on governance and how to use what eventually get to those territories well.
Tackling corruption in the oil and other economic sectors.
Buhari has prosecuted a whole lot more people than all successive government collectively put together. We have former governors that are being trialled for corruption, even judicial officials that are being trialled for corruption related offences. Just like in any system in the world including those of the United Kingdom, you don’t rail road judiciary.
Whoever is responsible for prosecuting corrupt official is doing that by taking them through the court process. The court process has to work and one of the difficulties sometimes of corruption is that the courts as much as they ought to be custodian of the Justice, take their time.
The common law system operates at a slow pace. So again if the president was to turn around and say that anybody that is perceives to be corrupt should be yanked to jail, we will have uproar in the world. Until they are found guilty, there is nothing much we can don’t.
What is important is that investigations are ongoing. EFCC is very active. They are no respecter of persons as people are being picked up. All the big names who previously would have never being touched are been locked up where they can and put thorough the trial process. But the trial process must take it turn; there is really not much you can do about that.
You talk about diversification to other sectors of the economy away from oil, but the oil industry is totally dysfunctional. How can you have such a situation?
This is not correct, yes Nigeria ought to process rather ship out crude. However I have made effort in the last few months to correct that including major efforts working with investors to begin to reshape the refineries that were comatose for very many years.
How can you have refineries lying comatose in a modern ambitious state?
It is what it is. The president has been here for two years and those refineries have been down before he came. Since the coming of this administration, we have been able to get them to produce 7 million litres versus Zero.
That is not the 90 percent template; we are now refurbishing the refineries. I just signed an agreement with Agip to build a new refinery in Nigeria. We are focusing on multinationals on processing.
Nigeria government is good at setting out targets, but shows no sign of being able to deliver. Why is that so?
I have delivered on everything I promised since I came into office. First, I took NNPC and move them to a profit making organisation, the first in their history. I reshaped the organisation; I removed over N6 billion cash call deficit through renegotiation. Everything that I have promised since coming into office I have delivered.
I will deliver on the refineries and I am committed to that and I would also deliver a future for oil that makes sense for Nigeria. But bear in mind that one have being there for one and the half years; the president has been there for two years. I can’t pretend that we are going to solve in one day the entire problems in Nigeria that happens in the past.
We have solved the Niger Delta militancy problem. It was there but we sorted it out in one and a half years.
When is Nigeria going to be self-sufficient in term of refined petroleum?
2019 is the target that I gave. I put the date; I would walk it, if I don’t achieve it I would resign. That is why you are in government. This is accountability and we are trying to put it in place.
Do you worry that president Buhari is not in a fit state right now to deliver on the promises of better governance, economic diversification?
Democracy is not about knocking head together, it is on the basis of persuasive ability to lead. Buhari does have that persuasive ability, he does have the leadership qualities, he is disciplined and he is an incorruptible leader. Those are the things that we need.
Mandala in his last years was not the go do it individual, he was a leader, a perceptive leader and that is what we need. I think he is able to deliver on that as of now and we are happy with the job that he is doing.
How can the government release 400 billion naira for capital expenditure giving no proper details of how this money is going to be spent?
No that is not true, there is a proper details is going to be spent. Budgets are just written in the air. There were specific ministries who provide details, these are vetted and approved.
I know the biggest chunk of that is going to capital expenditure. Largely in term of infrastructure i.e. railways, roads and the whole idea is that given the deficit position of the economy, there was a need to spend our way in difficult times out of it. So a lot of capital expenditure has gone into construction.
While you focus on reinvigorating the economy, the fact is that in the North of your country, there are nearly half a million children in grave danger of starving to death as a result of the Boko haram insurgency. Isn’t that the ultimate condemnation of Nigeria today?
Are you going to say that the attack in London by terrorists is the fault of London? Boko Haram isn’t the fault of Nigeria. It is the happenstance that we found and Buhari have been able to deal with it effectively.
When the president came into power, about 28 of our local governments were in the hands of Boko Haram, but today it is zero. There are lot of work going into funding provision and we have a lot of international support and assistance.
But clearly we inherited problems that were major. Nobody better frankly at that time in term of at least the security imperative to deal with this issue than Buhari and I think he has dealt with this issue effectively.
Buhari promised to eliminate Boko Haram, is he going to deliver on this?
He is working very hard on this. Does anybody promise on a hundred percent basis to eliminate militancy or terrorism? Nowhere in the world in the world has that been achieved, but the key thing is that we have taken back the territories.
