Early this month, the Nigerian Government released to the public its Economic Recovery and Growth Plan (“ERGP”), a Medium-Term Plan for 2017-2010 developed for restoring economic growth.
The ERGP address issues of energy from the perspective of electric power and the petroleum sector. Regarding the power value chain, efforts will be concentrated on overcoming the current challenges which relate to governance, funding, legal, regulatory, and pricing issues across the three main power segments of generation, transmission and distribution. The ERGP aims to increase power generation by optimising operation capacity, encouraging small-scale projects, and building more capacity over the long term. Government will also invest in transmission infrastructure.
With regards to oil and gas, the ERGP outlines new initiative such as ramping up oil production to 2.5mbpd by 2020, privatising selected public enterprises/assets, revamping local refineries to reduce petroleum product imports by 60 percent by 2018 and become a net exporter by 2020, save foreign exchange and prevent reversion to the fuel subsidy regime. Key activities to be undertaken include:
(i) Strategically reduce government equity in NNPC refineries and other downstream subsidiaries
(ii) Conclusion of downstream liberalisation
(iii) Encouragement of private-sector participation through co-location and JV arrangements
(iv) Acceleration of the building of critical gas pipeline infrastructure
(v) Finalisation of gas production sharing contract terms
(vi) Roll out of the LPG penetration programme.
Under the mining sector, key activities to enhance private investment in this sector includes:
(i) Increase in access to information by improving the archiving of geo-data (ii) Strengthening the infrastructure network by updating mining transportation and power requirements
(iii) Building local technical and managerial skills and capacity to ensure a steady supply of talent
(iv) Clarifying the tax and regulatory systems to improve the perception of Nigeria’s investment climate for mining activities
(v) Establishment of the solid minerals development fund with a seed fund of N200 billion.
Furthermore, the government intends to formalise artisan and small scale mining activities by automating the mining cadastral office operations. A file inspection and policing operations to improve reporting of mine quantities is to be put in place.
We believe this policy document will set the tone for governments further legislative and administrative actions in the highlighted sectors.
For further information on the foregoing, please contact us by email: ao2alert@ao2law.com with the subject: “Nigeria’s Economic Recovery and Growth Plan: A New Direction for Energy& Mining Sector”