The Future Investment Initiative (FII) hosted by the Public Investment Fund (PIF) of Saudi Arabia recently took place in Saudi Arabia with the primary objective of providing a platform for expert-led debates on global investment trends, with the ultimate aim of exploring opportunities for achieving sustainable returns, which deliver positive and lasting impact. The FII is a pioneering new global investment event aimed at connecting the world’s most influential business men and women, under the leadership of His Royal Highness Prince Mohammad bin Salman Al-Saud, Crown Prince, Deputy Prime Minister, Chairman of the Council of Economic and Development Affairs and Chairman of PIF.
Present at the event were high level attendees such as Richard Branson, Founder, Virgin Group; Bob Diamond, Former Group Chief Executive, Barclays PLC; Nicolas Sarkozy, Former President, Republic of France, and Nigeria’s private sector was well represented by the Group Chief Executive of Nigeria’s leading oil and gas company, Wale Tinubu.
Oando’s Group Chief Executive sat on a high-level panel to discuss, ‘Expanding Opportunities on the African Continent’, with focus on Nigeria as one of the leading economies on the continent, where he said, “We gained from high crude prices but rather than invest and save as much as we should have, we focused on financing consumption. We had petrol subsidies and at the same time the infrastructure decayed — the refineries couldn’t keep up with demand, and we were growing 5% per annum in population terms.”
Tinubu acknowledged that the Nigerian economy sustained “self-inflicted” wounds which means “…we end up producing what we don’t need and exporting what we need. We export 70% for gas but we only have 40% electricity penetration. We export 2 million barrels per day of crude, but import a billion tons a month of refined petroleum products (mainly petrol), so there is a mismatch, and the mismatch exists primarily because of policies that are self-inflicted.”
The key to alleviating Nigeria’s gasoline shortage is to expand its refining capacity, the conference heard. Analysts have also said if current refinery projects are successful, Nigeria could become an exporter of gasoline and other petroleum products to the region.Tinubu added that deregulation was a priority to ensure that Nigeria can attract a growing volume of overseas capital.He said: “Movement of capital should be free at the point of entry and people should be able to export capital as and when. They should be free to sell at the market price.”
Wale Tinubu closed the session on a positive note by pointing out that in Nigeria, “..the focus today is on soft issues, such as “the ease of doing business” to attract foreign investment, while at the same time learning from past errors to ensure the nation is poised for growth on all parameters.”
The fallout from the session was that prospects remain encouraging for many sub-Saharan African countries and that the recent drop in oil prices requires new strategies for Africa’s oil-producing economies. Sub-Saharan African oil exporters are now faced with the “twin deficits”. Namely, balancing government budgets against commodity fluctuations.