There are indications that Nigeria’s downstream sector and others in Africa are threatened by many challenges at this time. In this interview with Udeme Akpan and Joseph Oso, Mr. Emeka Akabogu, Chairman, OTL Africa Downstream Week, comments on a wide range of issues and points to participation in the event as key to success.

Akabogu

Can you paint a vivid picture of the downstream sector in Nigeria?

The downstream is the most important sector, especially as it ensures that petroleum products are delivered to individuals and corporates for different activities in the economy. In other words, it ensures that the entire value chain is achieved which explains why fuel scarcity affects everybody whenever it occurs. In Nigeria, some people think that the sector is developing better than it was some years ago, particularly because many operators have entered into business. But it is not completely so, as there are many unresolved issues.

Is the situation the same in West and other parts of Africa?

By virtue of the size, our market is bigger than that of other African nations. For instance, of 100 per cent cargoes destined for West Africa, 77 per cent of them end up in Nigeria. In other words, the Nigerian market feeds the other markets in West Africa. So, there is no doubt that the Nigerian market is the primary market of the region, especially in terms of professional services, trading and the key active subsectors which are related to the downstream. But there are occasions when Nigeria gets supplies from other small markets, including Cote d Ivoire. Also, in the last few years, Nigeria has embarked on massive importation of petroleum products from markets beyond West Africa as well as made giant strides in the areas of training, capacity building, retail infrastructure and logistics.

How ready or willing are the banks to fund businesses in the sector?

There was a time many banks were interested in funding downstream transactions. But because of the inability of many oil marketing companies to settle debts, many banks are currently unwilling to fund projects. In fact, many banks that got their fingers burnt in the past are bent on debt recovery at this time. However, some still consider trading in petroleum products as one of the fastest ways of adding value and getting returns.

What are the major issues, including projects and programmes that will shape the future of the sector in the short, medium and long term?

We cannot think of any other than the $12 billion Dangote refinery for a reason. For many years, the nation’s four refineries have not been able to meet domestic demand, thus encouraging massive importation . The refinery is very important and strategic because Nigeria has not had that kind of a single project for a long time.

Moreover, its impact on the nation’s economy is really going to be dependent on the policy put in place to guide operations. If the policy gives priority to domestic companies, then the plant will thrive. But if not, the refinery will be competing with other international suppliers and refineries around the world. It should be noted that the plant will create many multiplier effects, especially direct and indirect jobs and contracts. The plant will also stimulate growth in other sectors, especially agriculture as farmers would have easy access to fertiliser.

What are the major problems that stare operators in the face?

Like others , downstream investors face some challenges in Nigeria, including lack of funds, foreign exchange and pricing policy. They also face poor and inadequate public utilities. Specifically, as a result of the poor condition of roads, it has been difficult to move products from one part of the nation to another. The government has not also been able to pay fuel subsidy as when due to oil marketers, thus making it hard for them to attract credit from banks.

How can this year’s OTL Africa Downstream Week assist to provide lasting solutions to these and other issues in the sector?

Indeed, it can as it has been packaged to bring together every important stakeholder in Nigeria and other parts of the world. Refining is a major focus now in Nigeria and Africa-wide. Consequently, we will examine issues such as storage, distribution, marketing, funding, logistics, policy issues among others in Nigeria and globally.

Can you comment on the important guests, presentations and exhibiting companies expected?

We are not focussing on individuals but key organisations from each sub-sector of the industry in Nigeria and other parts of the world. We need to get all key sub-sectors well-represented in order to enhance value delivery to participants and exhibitors. Indeed, there will be many important presentations from Nigeria and other markets. There is a lot. I may not be able to mention all because of time. The event is loaded with many  content. We have also carefully included stakeholders in all sub-sectors who will be given time to speak because they are all important.

What value should participants and exhibitors expect to derive?

From the business point of view, this event is second to none, especially in terms of value. Participants do not need to go on the internet or travel around the world before meeting partners; they can get that at this event. The OTL Africa Week creates the platform for them to enhance their businesses .

Can you comment on your motivation, impact made and future expectations?

The primary motivation was the absence of such a platform for enhancement of business and development of policies in the downstream sector. If there was another platform at that time, there would not have been any need to introduce it.

Our event has directly impacted on several government policies. Many participants have been able to get new businesses, partners, representatives and financiers for their projects and programmes through involvement in this event.