INTRODUCTION
The African Continental Free Trade Area (AfCFTA) is being established by the fifty-four Member States of the African Union (AU) to create a single continent-wide market for goods and services and to facilitate the movement of capital and persons. The African Continental Free Trade Area Agreement (AfCFTA) will create the world's largest free trade area, based on the number of participating countries. The deal ties 1.3 billion individuals with a cumulative Gross Domestic Product (GDP) estimated at US$3.4 trillion across 55 countries. It has the potential to lift 30 million people out of extreme poverty, but attaining its full potential would depend on major economic changes and trade facilitation initiatives put in place. The AfCFTA has the potential to boost intra-Africa trade, promote industrialization, trade, job creation, and unleash regional value chains to facilitate Africa’s meaningful integration into the global economy. The AfCFTA will also improve the prospects of Africa as an attractive investment destination. It will help advance the empowerment of human resources, by improving access to trade opportunities.
On July 7, 2019, Nigeria signed the AfCFTA agreement in Niamey during the 12th extraordinary session of the Assembly of the African Union. Having consulted various trade groups, the country observed that there is more to gain from increasing access to its goods and services to a wider African market. Nigeria is the world's sixth biggest producer of crude oil. The bulk of crude oil exploration and production is concentrated in the Niger Delta. Over 95% of the country's foreign revenue and about 80% of its government revenue is generated by its oil and gas industry. According to the International Labour Organisation over 65,000 direct jobs are generated in Nigeria by the oil and gas industry alone, and more than 250,000 in non-direct employment. The 61 Operating companies in the Nigerian Oil & Gas Industry Content Joint Qualification System (NOGICJQS) have a combined staff strength of 11,057 comprising 10,393 (94%) Nigerians and 664 (6%) expatriates. Out of the 61 operating companies the top 4 companies in terms of staff strength account for 86% and have a total workforce as shown below:
In line with the report provided by the Nigerian Content Development & Monitoring Board (NCDMB), between 2015 and 2019, the human capital training in the oil and gas sector involved 1,612 youths covering the following skill areas:
• 1,000 youths in Oil Spill Management and Environmental Remediation Training (OSMERT)
• 15 youths in Machinist
• 10 youths in underwater welding
• 80 in Geosciences
• 22 in pipe mill operations
• 90 in artisanal trades
• 145 in poultry agribusiness
• 250 in Teachers’ curriculum Development
NCDMB funds and promotes trainings and human capital development across the oil and gas value chain in Nigeria. Oil and gas sector has three main key areas that include upstream, midstream and downstream
According to the Organisation for Economic Co-operation and Development, human capital is the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services or ideas in market circumstances. Nigeria as a nation is immensely blessed with human, oil and gas resources. The availability of these resources from one end to the other is sufficient in such a way that economic growth might have been accomplished in the late 20th century, given dynamic leadership. Investment in human capital plays an important role in increasing competition in oil and gas industry, improving quality of life and in generating Nigeria economic growth. According to Anyanwu et al., (2015), Nigeria envisaged to be among twenty most developed countries in the world by year 2020. It is a glaring fact that the country has failed to realize its full growth potential, amid all the abundant human and natural resources. This is not unconnected to the inability to invest in human resources and develop human capital to attain a full employment and sustainable economic growth at the end of the year. The establishment of AfCFTA therefore presents an opportunity in Africa to engage and develop their human resources in the area where they have competitive advantage over others. Table 1 below shows the index for Nigeria human capital development which helps to point to the reasons for the current situation.
Nigeria Human Capital Index
Source: World Bank 2020
Effect of AfCFTA on Human Capital Development in Oil and Gas Sector
Eradicate Structural Unemployment: AfCFTA has the potential to bridge the gap of structural unemployment in the oil and gas industry. A major issue in modern economies is that rapid deindustrialization has left many manual workers, struggling to thrive in a very different labour market. But AfCFTA will create a viable market that will be competitive for the oil and gas products. This will result to investing in education, research and human capital development to create a competitive means of producing petroleum products and use a cost effective means to transport it to the AfCFTA market.
Reduce Human capital flight: the era of globalisation has enabled skilled workers to move from African countries to the developed countries. This has had adverse effects on the African economy that lose its best human capital to the western and eastern countries. The establishment of AfCFTA will reduce export of skilled labour not only in the oil and gas sector but also in other sectors of the economy. Africa possessed high-skilled, innovative workforce that are ever ready to add value to raw materials in the exploiting, mining and manufacturing process.
Employment creation in the industry: The African Continental Free Trade Area (AfCFTA) presents a major opportunity to engage human resources that are idle most especially in the Nigeria oil and gas sector. The establishment of AfCFTA will bring millions of Nigerians out of extreme poverty and raise the incomes of existing labour in the sector. With the implementation of AfCFTA, trade in petroleum products and facilitation measures that cut red tape and simplify customs procedures would boost human morale to engage the market. This will make it possible for Nigerians to be interacting with over 1.2 billion population who are keen and ready to purchase petroleum products in the AfCFTA market.
Conclusion
Impact of AfCFTA on human capital development in the Nigeria oil and gas sector has been examined. The establishment of the African Continental Free Trade Area (AfCFTA) is expected to reduce structural unemployment, human capital flight and create more employment opportunity in the Nigeria oil and gas. Human capital is an important factor used in converting specific natural resources to oil and gas for human use and benefit. The viable market opportunity of 1.3 billion population and competition among the oil and gas producing countries in Africa will trigger investment in human resources to achieve the best output at lower cost from the industry. It is high time for the actors in the Nigeria oil and gas sector to increase investment in human resources in order to stay highly competitive in the market when AfCFTA is launched in January 2021.