As formerly presented, the desire of the Federal Government to have a gas-powered economy by 2030 is welcome and in tandem not only with international best practice but also the necessity to boost the nation’s struggling economy.
For too long, the government has paid lip service to developing the gas sector, despite its huge potential. At the same time, corruption and endless policy somersault have seen gas being wasted, even as avenues abound for its profitable utilisation. For the many decades that gas has been flared in the Niger Delta, for instance, the country is known to have lost a huge fortune in revenue.
The declaration which was made by President Muhammadu Buhari at the “Nigeria International Petroleum Summit, 2021 and the official launch of the Decade of Gas” in Abuja, is very much in line with global trends where the focus on cleaner energy sources as against fossil fuels has been largely accentuated over time. The need to vigorously drive this gas-powered economy agenda cannot be overemphasised. Nigeria is basically more of a gas-endowed than an oil-endowed nation given its enormous natural gas reserves estimated at about 600 trillion cubic feet, which has made it to be the sixth-largest gas country globally as well as the ninth-ranked country in terms of gas export. If Nigeria can make significant progress in this regard, it would particularly help the growth of the country’s industrial sector as well as other non-oil sectors. What is not clear is whether this desire by the government is well-intentioned or is just mere rhetoric; a case of telling the audience what they want to hear. Time will tell. Ironically, Nigeria consumes very little of its huge gas reserves. This in itself is antithetical to development, given the huge market provided by her 200-million plus population, and the absence of better alternatives to gas.
Currently the benefits realised from the gas sector through the operation of the Nigeria Liquefied Natural Gas company (NLNG) has been greatly supportive of the growth of the economy. Though it contributes about one per cent to gross domestic product GDP, the NLNG is reported to have generated almost $115 billion to the national coffers over the years, in taxes and dividends. Moreover, it has contributed significantly to job creation with about 95% of its workforce made up of Nigerians.
Global demand for gas has been rising given the potential it has to drive global growth, particularly with the growing decline in the demand for fossil fuels. Hence, the current government’s focus to enhance gas infrastructure in Nigeria as well as grow the domestic utilisation of LPG are good for the system. In addition, the proposed increase in the gas-to-power technology and commercialisation of gas flares, among others are laudable agenda in the growth of the sector and the economy at large. This is very appropriate since the competition from the renewable energy sources of solar and wind is largely influenced by seasons, and scarcely transportable to the demand centres. So the door is very wide open for the development of these gas infrastructures.
In order to achieve all these, the environment for business would have to be made right. First the Petroleum Industry Bill (PIB) would need to be passed soon by the National Assembly following the timetable it set for itself such that by the end of April 2021, the document can be ready for Presidential assent. A well crafted PIB would definitely provide the oxygen for the actualisation of this gas development agenda. It would also spur the various interested local and foreign investors in the sector to take positions in the development of the sector.
Some of the obvious beneficiaries of the gas agenda would be the industrial and energy sectors in the growth of manufacturing and the provision of power to the numerous electricity consumers across the country. Nigeria can jump-start the growth of industrial production when gas is easily available as a veritable source to the power industry. The current parlous state of manufacturing and other industrial production needs to be reversed and the use of cheaply available gas is one of the ways to reverse this negative trend. In fact, trends of de-industrialisation has been staring the economy in the face over the years and the development of gas infrastructure would make a difference. In support of the development of the industry and reduction of carbon emission, the use of domestic gas has to be enhanced such that the rate of deforestation through the use of firewood can be reduced. Gas holds the key to the refocusing of industrial production in the economy, and government should go ahead as planned. All well-meaning Nigerians should fully support government in this noble venture, in the interest of present and future generations. No more talk is necessary now. Action is what is required. If properly harnessed, gas can make a lot of difference in the economy.
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