With recent news that both South Africa and Nigeria have finally crawled out of their economic recessions, many are looking forward to seeing how the respective countries adapt to the current economic climate.
The future economic build-up of these countries’ economies will depend on their willingness and ability to adapt to future bumps down the road.
International investor confidence was greatly lowered because of the recession, and the downturn in both countries was enough to quell the ‘Africa Rising’ narrative, which has been brewing for many years.
For Nigeria, the economic downturn was the first and largest the country had seen in over 20 years. The recession coincided with historic low oil prices, and Nigeria’s energy sector (the country’s largest economic contributor) was dealt a heavy blow.
The legislative response from the Nigerian government to prepare the oil sector for future challenges was the drafting of the Nigerian Petroleum Industry Governance Bill (PIGB).
Finally passed in May of this year, the PIGB was 17 years in the making, and the result of many previous drafts and proposals. The bill aims to bring more transparency to the country’s oil sector, but mostly intends to create more regional business opportunities and increase investor confidence.
The bill was divisive and took many sitting governments to officially draft. While some in the industry may doubt the positive effects of the legislation, Benedict Peters, billionaire and CEO of the Aiteo Group, is hopeful and a vocal proponent of the legislation.
Aiteo Group, which Peters founded in 1999, is quickly earning its place as a successful and leading indigenous company for the Nigerian oil sector. Aiteo made waves recently, after locking down the rights to OML 29, one of the largest onshore oil blocks in the country.
The acquisition and drilling in OML 29 has skyrocketed the Aiteo Group’s barreling capacity from just 23,000 barrels of oil per day (bpd), to 90,000 bpd. This venture was a huge feat and earned Aiteo a reputation of pragmatic success in the sector, but Peters claims this is just the start of a long series of wins for Aiteo.
Peters’ support for the PIGB legislation comes from a place of pragmatism and creative flexibility as a CEO. His vision for Nigeria and sub-Saharan Africa is optimistic, and he believes Nigeria has the capacity to become an energy leader in the coming decades.
While many may look at the relative lack of modern infrastructure in many sub-Saharan African countries as a disadvantage, Peters views this as an opportunity.
Though himself an oil tycoon, he knows that the future of energy will need to be a combination of more modernized macro infrastructure solutions and localized, micro grid solutions. These micro grid solutions will capitalize on the newest technological advancements of the coming years and alternative forms of energy.
Peters argues that in looming decades, while many more technologically advanced countries will be burdened with paying for maintaining, repairing, and replacing soon to be obsolete factories and macro grid energy infrastructure, African countries will be able to bypass this step completely.
Instead, they will be able to focus on innovating and creating newer technological solutions for the African energy crisis. Peters’ hope for Africa as an energy leader in the coming decades influences how he runs his business, and has led him to support the PIGB legislation.
Peters believes that the PIGB legislation will drastically increase the capability for newer energy players to come up with their own solutions for local and regional energy problems. If implemented correctly, the legislation will attract international investors, creating an opportunity for these new players to get their foot in the door, whereas previously they were unable due to the overall presence of more traditional oil conglomerates.
While it may be surprising that a billionaire oil tycoon would support such a bill which others may be against, Peters’ creative pragmatism should be celebrated and viewed as a powerful example for other countries in the region.
Future recessions which will burden Nigeria and South Africa can only be avoided by the region’s willingness to adapt to the technological capabilities and business platforms of the future.
In a time of such economic uncertainty, it is refreshing those who care about Africa’s potential coming economic capabilities to see someone like Benedict Peters lead the charge for Africa’s energy potential.