World Economy

Oil is not Nigeria’s future: Finance Minister

Oil is not Nigeria's future: Fin Min

Nigeria's future prosperity lies not in oil—but gas, the finance minister of the petroleum-rich country told CNBC.

"The growth that people are seeing in this economy now does not come from oil…. Oil is actually contracting," Ngozi Okonjo-Iweala said.

Nigeria is the world's 13th largest oil producer and generates 1.95 million barrels of crude oil per day, according to the Organisation of the Petroleum Exporting Countries (OPEC). It has over than 37 billion of proved crude reserves—more than any other African country bar Libya—constituting around 3 percent of total world reserves.

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Petroleum exports account for about 70 percent of Nigeria's export revenue.

However, industrial-scale theft, corruption and fraud are crippling production. Chatham House estimates that Nigeria lost an average of 100,000 barrels of oil per day, or 5 percent of total output, in the first three months of 2013.

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The minister—who was appointed minister of finance in July 2011 and has previously served as foreign minister—stressed that Nigeria itself, rather than foreign countries or pan-governmental organizations, needed to act to combat oil theft.

"We ourselves need to take our own steps to stop those who are involved in participating… there is a kind of a criminal cartel, both domestic and foreign," she said.

Okonjo-Iweala added that the country's oil and gas sector needed to become more transparent and that Nigeria's economy was becoming decreasingly reliant on oil.

"The Nigerian growth story is not going to be about oil. It is going to be about a much more diversified economy. That is what gives me hope," said the minister.

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Apart from petroleum, Nigeria's other natural resources include natural gas, tin, iron ore, coal, limestone, niobium, lead, zinc and arable land.

The finance ministry forecasts the country's economy will grow by 6.75 percent this year. Combined, the oil and gas sector account for about 35 per cent of gross domestic product.

"Gas is the future actually, when you look at extractive industries," said Okonjo-Iweala.

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She also highlighted her hopes for Nigeria's non-energy sectors. "The story is going to be about agriculture, about housing, about communications technology… It's going to be about the creative industries—our film industry is the third largest in the world and is continuing to grow."

—Written by CNBC's Katy Barnato, reported by Steve Sedgwick