World Report

Yusuf Hamishu Abubakar
Executuve Secretary ofthe PTDF

‘Our challenge is to get the right kind of education for Nigerians’

I'd like to start by looking at your background. Before your appointment as Executive Secretary of the PTDF in 2000, you had a role in state-level administration for your home state of Kaduna. Here you held the positions of Honourable Commissioner for Health and for Finance and then for Planning. As a trained lawyer you also have spent time practicing this profession. How did your background in these areas prepare you for your role as Executive Secretary at PTDF and what objectives and priorities have you developed in this role?

Before I came to PDTF I had been working with the state government at the cabinet level from 1992 until 1998, as a commissioner in different ministries, starting with Ministry of Health, then Ministry of Lands, Survey and Country Planning and Ministry of Finance. I think these positions actually prepared me in understanding the issues that are involved in policy formulation, issues that has to do with policies and education and optimization in the use of resources. So with this background and also being a practicing lawyer, I believe I fitted suitably well into this new assignment, which I was given to set up PDTF as a fund that is focused, and can deliver a specific service.

One of the things we had to do initially was to look at the laws of PDTF and see how they can be amended to be more effective. We have proposed a lot of amendments to the laws, based on the realities on the ground and taking into account the aspirations of government in the oil and gas sector, which have much to do with national aspirations like increasing our oil production to 40 billion barrels of oil a year, at the rate of 4 million per day and quite a number of other issues.

These are quite challenging and tall issues which need a lot of investment and a climate that is favourable to achieve them. There is also the aspiration by government to ensure that the Petroleum sector is not just an enclave that stays aloof from the rest of the economy. There is a desire to integrate it within the greater economy so that the contribution of the sector in this regard, will be greater than what it is today. And also there is a need to have greater participation of local companies and indigenous companies. This is very important to ensure stability, peace, job creation and also wealth creation within the country. And within these broad aspirations our task is to participate and contribute towards improving the local content by building capacity and working with university projects to ensure that Nigeria attains its aspirations.

The PTDF was actually set up in 1973 by the, then Federal Military government. However it did not become operational until the present Government set up the PTDF Management Committee in September 2000. What is the history of the PTDF and what do you think has been its major achievements?

Initially PTDF was set up with the sole aim of encouraging local participation within the oil and gas industry, by training Nigerians with the appropriate skills for them to be employed within the sector. But with the state of the economy at the time, PTDF was one of those institutions that were almost moribund. When President Obasanjo came in, in 1999 and reviewed the role of all agencies of government, the administration found that PTDF has a role to play in ensuring maximum participation of indigenous people. Problems, such as those in the Niger Delta where you have a lot of youth restiveness, unemployment and non-participation within the system, had to do with a lack of capacity. The Petroleum industry is a sector that is highly regulated, capital intensive and international in character and therefore for anybody to participate meaningfully you have to have the right kind of skills which are comparable to any other Petroleum sector on a global level. Our own challenge is to see how we can get competent Nigerians to institutions around the world where they will get the right kind of education so that when they come back to Nigeria they can either work in operating companies, services companies or set up their own business. And so far we've sent close to 500 Nigerians abroad in various institutions where they are studying and a lot of them that had come back into the country are employed. Some of them are thinking of how they would use the opportunity created by government under the local content initiative to see that they set up their own business and these are things that are quite encouraging to us.

Another one of the things that we are trying to do is to ensure that our institutions participate in active research within the oil and gas industry. If you take the example of the oil spillage that we normally have in the Niger Delta, there is a need for us to understand the impact on the environment and economic life of the people and even on their health. The sector is driven by cutting edge technology and we feel that one of the benefits that we are suppose to derive within the sector as a country, is to benefit from the advance in technology and the best way to do this is to ensure effective collaboration between the oil companies and our universities. This is one area that we have been working closely with the industry to endow chairs in certain research areas, which are relevant to the industry and also to upgrade the facilities of our universities so that they meet the requirement of the industry in terms of research opportunities.

So these are broadly two areas that we are looking at - building institutional capacity locally and building capacity within the individuals that are suppose to come and take control of our economy. We are also revamping the Petroleum Training Institute which is supposed to provide the low level technical manpower for the industry and it is our hope that with a lot of projects coming on-stream, especially in the gas sector where you need a lot of constructions, the manpower that would be required would be provided by Nigerians. And it is our aspiration to see that Nigeria becomes a service center of the oil industry within West Africa and the Gulf of Guinea. And to achieve this we need to have people who are qualified, who have the confidence to provide the labour and also to encourage a lot of companies to be domicile in Nigeria to provide these services. I think so far we are on the right track and we are quite comfortable with what is happening.

The most visible activity of the PTDF in contributing to the development of Nigerian expertise in the oil and gas sectors has been the Overseas Scholarship Scheme (OSS), a program operated in conjunction with the Robert Gordon University, United Kingdom (UK). How have UK universities been involved with this scheme and what has been the response from students, universities and most importantly, potential Nigerian employers?

In the initial stage of the scheme the UK was chosen deliberately as the main area of activity in terms of sponsorship of our students, specifically within Scotland and also Imperial College (UK) and a lot of other top universities. Our choice was informed by the successes of the UK, especially Scotland in Oil Education programs and the fact that one of the major operating companies in Nigeria, Shell, and others here, have a lot of bias for the English graduate. In the course of time, looking at the character of the oil industry in Nigeria where you have other companies from other jurisdictions like Norway, France, America, we have now expanded areas of our activities to include education institutions in France, in the US such as Texas A&M and quite a number of other universities. We also have students in Norway, so it shows you how diverse and vibrant our approach has become.

Our selection process for the students is quite vigorous and intense and very competitive. We ensure that it is the best students that are selected because the amount of money that is being expended is something that we need to justify. Therefore the best students are sent to these universities and these universities will not accept students that are not qualified. The performance of the students so far has been quite encouraging because we have often had our students come out as the best students in their respective departments. The companies too are quite receptive to our graduates and we have had a series of discussions with them. A number of them have indicated that our scholars will be the preferred employees in their companies.

For years now, operators in the oil industry sectors have expressed concern over the effect of the declining standard of Nigerian education on the development of local manpower for the petroleum sector. To help this problem PTDF recently earmarked N1.2 billion to assist eight Nigerian universities offering courses in petroleum studies. What are the aspirations of PTDF in terms of developing the Nigerian education sector?

First of all, what we have being doing is a stop-gap kind of arrangement, because 15 years before the advent of democratic governance we had a lot of challenges with our educational institutions. They have almost collapsed and there is a need for us to bring them back to the state that they're supposed to be at, in terms of making sure that its products, the graduates, meet the requirement of industries for employment. And therefore on a sustainable basis we would want to make sure that our institutions have the capacity to train our own young people. We cannot be sending our graduates and undergraduates out of Nigeria for training; this is not the sustainable path. Therefore while we are sending people in the short run to the UK and other countries, what we are trying to do in the long run it to keep our institutions moving.

In this respect we are looking at three areas of intervention and assistance to the universities locally. We have identified petroleum-related departments and we are linking them to have exchange programs and collaborations with universities abroad, so that their curriculum would become updated and there would be sharing of knowledge and information between the two. We also have a PhD program and fellowship for lecturers in these universities and we are assisting them with those things so that at the end of their training they will come back and impact the knowledge in the students.

And then very fundamentally too, the facilities in these universities are completely run down. Some of them don't have current library books, they don't have workshops, they don't have IT facilities and it is one of the things we are doing, providing them with infrastructures and equipment to help their students in research and also text that is needed for their educational requirement. So these are the basic areas where we are collaborating and assisting them.

Earlier you mentioned the PTI. Of the N2.5 billion that has been spent by the PTDF in the last four years to increase the skill and competence of Nigerians, a good deal of this has gone into Infrastructure development. The upgrading of the Petroleum Training Institute (PTI) in Delta State has been a priority in this regard. What stage of development is this project in and what plans do you have for infrastructure development in the years ahead?

For the PTI we have gone quite ahead through collaboration with Robert Gordon University in the UK. We have sent almost 90 percent of the PTI staff to the UK to attend various levels of training programs, to understand how to teach and how to deliver their lectures and develop their curriculum. We are now at the stage of physical upgrade of the facilities and that is going through the due process mechanisms at present. Some of the developments have started and in the course of this year a lot of development is going to take place.

One of the major aims of the PTDF has been to support the financing of, and pariticipation in, international seminars, conferences and workshops that will not only enhance the development of technology in oil and gas in Nigeria, but also improve the image of this industry. You have personally had much to do with this aspect of PTDF. What is the thinking behind this international participation and what events will you be involved with in 2005?

There have been a lot of initiatives by the government to ensure that Nigeria is presented to the world as it truly is. People should understand the opportunities that are in Nigeria. People should also understand that the country is undergoing a lot of transformation and reforms. We need to expose to the international community what the President has been doing in terms of economic reforms, in terms of opportunities that are here in the country, so that they would get out of their stereotyped thinking about Nigeria and come and invest. That is why we have been holding a lot of seminars and workshops, so that people can come into the country and see what is happening and see the opportunities. And the good thing about it is that anybody who has come to Nigeria and invested doesn't want to leave and I think the greatest testimony of the reforms are these people who are benefiting from what is happening.

When you look at the telecommunications sector, the oil and gas sector, these are important areas that people are having fair returns on their investment and they are quite happy with what is happening. So Nigeria is a completely transformed country and we are still going through the process of reforming for the better. We recognize that the world today is a global village and we have to interface with the international community and there are lots of opportunities. There is the NEPAD initiative; there is also Tony Blair's Commission for Africa, which is one of those things where they are trying to help Africans to help themselves. And what we've been doing is to show the world that we are up to the challenge, that we are changing our attitude and we have to benefit from all this work. Importantly, our President has been at the forefront of these changes.

And in your personal experience, what type of results have you seen at an international level?

I've seen quite a number of results, one of which is you and a lot of other people coming to see what is happening in Nigeria and then wanting to go and report on it. Quite a number of people from America, Canada and all over the place are coming to us with initiatives that they want to set up business in Nigeria. They are quite interested in coming to Nigeria to see the opportunities that are there. Like I said, with our population, with what is happening in our economy and with the integration of the African market, especially within the ECOWAS sub-region, there is huge potential for any investment and the returns in our economy is quite reasonable and competitive.

Last week we spoke to Ms. Oby Ezekwesili about the Extractive Industries Transparency Initiative (EITI) and the Federal Government's role in ensuring transparent and accountable business in the Oil and Gas Industry. As a technical assistant and consultant to the committee of the NEITI, What specific schemes have been put in place to ensure transparency in the industry?

The good thing about the idea is that this is an initiative that the President has formed and set up within Nigeria. It is our own program; it is not a program that Nigeria came into so that we would meet certain expectations of certain protocol. We were one of the first nations to sign on to this initiative because the president is one of the founders of the Transparency Initiative and he has already initiated quite a number of reform processes which will make Nigeria open, transparent and competitive. This is an imperative which is for our own benefit, the President wants value for money for whatever is bought and sold here and the due process that has been set in place, which even came before the EITI Initiative, is one of those things that would show the world that we are committed to cleaning up the system and changing the ways things are being done. In this respect the President has put up quite a number of initiatives including the Economic Financial Crime Commission and the ICPC. So there are quite a number of schemes which have been set in place to change the way business is being done.

While you are here you must have noticed that the government has started the process itself by publishing monthly all the amounts that are due to each tier of government, so that people can question the governments on what they are doing with the resources and this goes to show that we are committed to the Transparency process. If you want to engage us you have to be transparent, competitive and people in Nigeria are interested in knowing how money will be spent. They don't want to deal with anybody who has hidden cost and the whole idea of the EITI is to ensure there is no hidden cost. The ways we do our dealings are very clear. Before now, for you to participate in the oil industry, if you want to get an oil block, it was discretionary allocation, but today it is something that is open, transparent and it is competitive. The rules are well set out. Anybody who wants to do it, once you qualify on the technical stage you move to the next round of commercial qualification and it is the highest bidder who normally gets the block. So we are very open, equally in all the contracts within NNPC and all the sectors of the economy. So Nigeria is fully committed to doing business transparently.

And what role can the PTDF play in this initiative?

First of all what we do is, as a capacity building institution we are setting out the culture and ensuring that in our training program people understand that this is the way the new Nigeria is moving and all the institutions have to understand that they need to imbibe the new culture and teach people of what is happening. As such, we are part of the technical crew for the implementation of the initiative.

It was quoted in the press recently that through the PTDF, it is estimated that over eight billion dollars in foreign exchange - hitherto paid to expatriate oil workers as salaries and allowances - are now being saved for the country.
What specific objectives are driving the local content agenda of PTDF and what effects will an increase in local content have on the Nigerian economy as a whole?

For example, talking about that figure now, it is about eight billion dollars. Imagine the effect if you translate that eight billion dollars into the Nigerian economy. When we look at the total budget of Nigeria in terms of capital expenditure, we contribute quite a lot and that is why we have set for ourselves the target of ensuring that within the next year, by 2006 local content will increase up to 60 percent and in the next four, five years up to 70 percent. We have done elaborate studies as to those areas that Nigerians can easily participate in and at the high end this will not be easy for us because of the technological needs. This is why we have limited it to 70 percent. Above 70 percent needs cutting edge technology and a capital intensive market, which as of now we are not prepared for.

So our target is to get a lot of companies to participate in the oil industry, but also in other related industries because it will have a domino effect on the whole economy. For example if you take any aspect of business in the Oil and Gas Industry and you look at the possible impact that it is going to have on the overall economy, it would be quite a lot. Take the issue of safety, take the garment and the safety wear in the industry, take the boots and the gloves. If we can produce these things in the Nigerian economy it would mean that we would have a lot of industry that are operating in the leather field. It has no direct correlation with the industry so to say, but you could see that because we are talking about localizing the materials that are being used in the industry it will have direct effect on the manufacturing sector, livestock sector and on all the value chain, you create more jobs. So this is the way we are looking at it. Look at offshore, even if we could do this locally instead of the present situation where everything is imported. If all these could be done in Nigeria it will trigger a lot of activities within our economy and that is our own aspiration. Our own aspiration is not just the revenue that we are getting out of the sales of the crude, the taxes and the royalties but we want the activities within the sector to have an impact on the overall economy so that more jobs will be created and this is adequately enunciated in the NEEDS document of the Federal Government.

So you'll see everything that is being done is a deliberate plan that had been well thought out and it's going to fall in place.

As you know the focus of our report is on Nigeria at a time when the Development of Africa is taking centre-stage both internationally, through Blair's Commission for Africa, and internally through NEPAD. As an organization that has strong alliances with many international institutions, what are your thoughts on NEPAD and Pan African cooperation and the role that international companies and governments are playing in developing Africa and Nigeria?

For NEPAD, I think it's an excellent initiative because this is where African leaders have designed a whole concept. They designed it with the support of the EU and the UN. What we will need is a lot of support. We must understand that if the international community is really committed to helping us there are certain concrete things that need to be done. The debt burden of Africa is not justified and the amount that we are using to servicing the debt could be used to develop other sectors of the economy. I believe it would be a good thing to cancel the debt.

Secondly, the international community, especially the developed countries, has to open their markets and stop subsidizing certain products, which Africa can export to their own countries. If they don't do this we are still in the same state. The benefit of NEPAD can be seen in a lot of initiatives that have been taking place in Africa. Africa has been bedeviled by a lot of problems-instability, conflict and security problems. But recently the African leaders have put their acts together and they've been doing a wonderful job in trying to maintain stability. What has happened recently in Cote d'ivoire, Zimbabwe and more recently in Sao Tome, where constitutional order had to be restored and also what is happening quite recently in Togo. This will show you that Africans are really doing certain things to ensure the stability of the continent. What we need to do is to deal with those problems that are the root causes of instability. It has to do with weak institutions and also lack of economic opportunities and poverty. The best way to deal with this is by helping Africa to help themselves, through building capacity and making sure that the little resources that they have is left within their economy, instead of being used to pay debt that we've paid more than twice over.

A lot of exciting changes are taking place in Nigeria and all the things that you've been reading about Nigeria being an unstable country where things don't work, is not true. Today Nigeria is on the path to recovery, the path of progress and we are all behind a committed leadership.

Thank you Dr. Abubakar.

Thank you.