Nigeria gets RMAFC backing on $15bn cash-for-oil deal with India

The new $15 billion upfront cash-for-oil deal secured by the Minister of State for Petroleum, Dr. Ibe Kachikwu, with the Indian government has been hailed by the Revenue Mobilisation Allocation and Fiscal Commission.

The Commission described the deal as laudable and a better to shore up the country’s foreign reserves than selling of strategic assets.

According to a statement by the commission’s Head of Public Relations, Mr. Ibrahim Mohammed, “The RMAFC has always been advocating that instead of selling off Nigeria’s strategic assets to solve its short-term expenditure requirements, the country should look elsewhere to attract long-term investments like this that will bring good returns for the economy through employment generation, wealth creation and sustainable development”.

The Commission also queried that there is no reason why the country should not have four to ten LNG projects, which, according to it, will add value to production, create employment, enhance economic development and subsequently increase revenue generation for the federation.

The RMAFC urged the government to reach out to wealthy Nigerians for more investments. It says “In order to arrest the high incidence of gas flaring and harness the huge potential in the gas sub-sector in Nigeria, which ranks seventh in the world and first in Africa, with natural gas reserves base totaling 188 trillion cubic feet as of May 1, 2015, wealthy Nigerians and foreign investors should be encouraged to set up several Liquefied Natural Gas projects as possible”.

The statement commended Dangote Industries Limited (DIL) on the recent acquisition of Twister B.V., a Dutch company headquartered in the Netherlands delivering reliable, high-yield and robust solutions in natural gas processing and separation to the upstream and midstream oil and gas sectors.

The new deal with India would guarantee an immediate leap in Nigeria’s foreign reserve to the tune of $15bn. With the terms of agreement, the Indian government is expected to make an upfront payment to Nigeria for crude purchase, which is to be repaid on the basis of firm term crude contracts over some years.

The Minister of State for Petroleum, Dr. Ibe Kachikwu, had on Tuesday announced a deal with  that would immediately put $15bn cash in the coffers of the Nigerian government for oil contracts that would be supplied in the years ahead.