Morocco signs gas pipeline deal with Nigeria

Experts see the partnership between Morocco and Nigeria as a model for opening the path to South-South cooperation in Africa.
Sunday 17/06/2018
A 2017 file picture shows Morocco’s King Mohammed VI receiving a Nigerian delegation in Rabat. (AP)
Strategic axis. A 2017 file picture shows Morocco’s King Mohammed VI receiving a Nigerian delegation in Rabat. (AP)

RABAT - By signing a gas pipeline agreement with Nigeria during Nigerian President Mohammadu Buhari’s official visit to Rabat, Morocco has taken a huge step towards establishing its economic clout in Africa and strengthening its ambitious plans in the gas industry.

Moroccan King Mohammed VI initiated the pipeline agreement with Nigeria, which was one of three deals signed June 10 in Rabat. Other agreements involved phosphate production and training for agricultural workers.

Experts see the partnership between Morocco and Nigeria as a model for opening the path to South-South cooperation in Africa in addition to offering a greater economic, political and strategic dimension.

Khaled Sharqawi al-Sammouni, director of the Rabat Centre for Political and Strategic Studies, said: “These agreements will strengthen the bilateral economic relations between both countries and they represent the formal implementation of the accords concluded during the Moroccan monarch’s visit to Abuja in 2016.”

Sammouni said the gas pipeline project is the most important of the three agreements between Nigeria and Morocco. Observers qualify it as “the greatest investment” and expect significant economic windfall for both countries when it becomes operational. The project is the first of its kind in the region and will lead to more economic integration and hasten the electrification projects in all regions crossed by the pipeline.

The projected pipeline has mobilised investment funds for extending an existing gas pipeline over 5,660km. Officials from Morocco and Nigeria said that “for economic, political, legal and security reasons, the choice was made on a combined onshore and offshore route” for the pipeline. Construction of the pipeline will be phased based on the needs of the countries crossed by the pipeline over the next 25 years.

The next step for the project will involve countries crossed by the pipeline, the Economic Community of West African States and potential European clients. Negotiations with international development banks and preparation of legal documents are also needed.

The gas pipeline project had been announced during King Mohammed VI’s visit to Abuja in December 2016. Both countries agreed to finance the project through their sovereign wealth funds — Morocco’s Ithmar Capital and Nigeria Sovereign Investment Authority — but the size of investments was not revealed.

“The project reflects King Mohammed VI’s vision for an African continent in control of its destiny,” said Ithmar Capital CEO Tarik Senhaji. He pointed out that Africa has very significant economic potential and offers unique investment opportunities.

Nigeria Sovereign Investment Authority CEO Uche Orji said the Moroccan-Nigerian partnership is a perfect embodiment of mutual investment and development initiatives.

Even though Nigeria, an OPEC member, is rich in oil, it is short on electricity production. This makes its industry less competitive and its economy slumped when oil prices were low.

In the other agreements, the Nigerian Sovereign Wealth Authority and the Moroccan Office of the Management of Phosphates signed a memorandum of understanding to develop a chemical plant in Nigeria to produce ammonia and its derivatives.

Observers said the partnership would practically double Morocco’s phosphate activities.

Since rejoining the African Union in January 2017, Morocco has engaged in a diplomatic campaign to build cooperative relations with many African countries, including Nigeria.

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