COP28 and its impact on Nigeria’s economy (3)
Sunny Nwachukwu (Loyal Sigmite), PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on +234 803 318 2105 (text only) or schubltd@yahoo.com
January 2, 2024289 views0 comments
Sequel to the points already made in the preceding part of this subject, being deliberated upon, the global energy business as expected should primarily align with the positional norms of a capitalist operational business system. A shift from the contemporary sources for energy generation, as already decided with the emergence of the COP28 green deal reached by nations (the “UAE Consensus” policy to completely move away from oil and gas, transitioning away from fossil fuels) requires a strategic plan by the oil producing countries within Africa.
By implication, this reason has two faces of a coin: (1) dealing positively with the global threat of global warming, and (2) coping with the envisaged and expected economic growth of petroleum exporting countries within Africa, importantly through foreign exchange earnings from the exports of crude oil/petroleum. Within the context of strategic management therefore, it is further posited that businesses ought to be professionally handled for the sole purpose of actualizing the corporate aims, which ultimately targets at realising sustainable gains, for economic growth. Such planning by the leaders in various petroleum subsectors in their respective economies should include Vision, Mission, Objectives, Strategy, Approach and Tactics.
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Citing the latest development within the Organisation of Petroleum Exporting Countries (OPEC), with the exit of Angola (to buttress a valid point); the Angolan oil industry action gives a clear picture of a forward looking organisation that hopes to optimally exploit the opportunities inherent in her capital stock (petroleum natural resources) for the nation’s economic interest. Business principle portrays a mantra that “there is no [buddy] in the jungle”; which speaks of business operation focusing squarely on strategic planning as a process towards actualizing the organisation’s economic goals and objectives. The Angolan oil industry leaders sent a clear message by the decision made and action taken to exit their 16 years membership of OPEC.
With the latest global green energy deal taken at the COP28, Nigeria (in one’s opinion) should strategically manage her opportunities positively and optimally, for economic gains inherent in her petroleum capital stock now because time is ticking faster than expected against fossil fuels (especially, crude oil resource we have in abundance). Nigeria’s 2023 economic turmoil since the removal of the fuel subsidy on 29th May; calls for a quick strategic position in the global energy investment mix, through massive exports of natural gas to the European energy market. That, in no small measure, needs to run pari-passu with the nation’s investments on non-oil revenues. It shall substantially impact positively with significant improvement on the local currency exchange rate depreciation.
The nation’s economic future ought to be a worrisome task for every citizen (not just the sole, official lessee official assignment left for the minister of finance and the coordinating minister on economy). This demands a smarter and more focused action-packed tactical plan specially designed for goals and objectives in the nation’s economic emancipation and improvement.
The obligation of Nigeria as a signatory to the COP28 pact or green deal is simple. The nation needs to timely comply within the timeframe the globe exits completely from production and utilisation of the fossil fuels sources (on the grounds that the nation’s contribution to carbon emissions footprint is insignificant). Nigeria must not necessarily withdraw from OPEC as Angola did but should fight to defend her economic interests with respect to production quota; especially now that the days of fossil fuels are fleeting globally due to climate change from the impact of global warming.
The COP28 agreement is a clear indicative sign that the peak of fossil fuels production and all attendant businesses now head to a terminal end, as stipulated in the net-zero carbon emission timeframe. African countries are expected not to take the departure of Angola from OPEC as an excuse to usurp the intended results of the COP28 deal but, to see it as a means of facilitating greater consumption of the capital stock/petroleum resources in all the African oil and gas producing countries in growing African economy through energy exports. This is inclusive of all the oil producing countries, both within and outside OPEC membership; Nigeria, Equatorial Guinea, Gabon, Republic of Congo. Others are Angola, Libya, Egypt, Chad, Sudan and Southern Sudan. Africa still lags behind in her percentage proportion on general exports (especially on finished goods) in the global trade. The untapped opportunities in the world oil market needs now to be comparatively exploited to full brim in oil and gas supply, before it becomes too late based on the ongoing UN sponsored climate action timeframe.
OPEC obviously cannot determine or influence the trajectory of the global energy transition with the ongoing global energy dynamics, at this stage of the climate actions on mitigation of global warming. Nigeria’s oil revenue stream seriously needs to be aggressively beefed up (both from the upstream operations, and the locally refined petroleum products at the downstream back end of the oil industry). The obvious fact and reason for that remain that Nigeria is heavily dependent on oil revenue for budget financing.
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