Nigeria’s Rivers State has freed 22 Exxon Mobil Corp. employees quarantined last week after their arrest for violating an order restricting movement into the state to curb the spread of the coronavirus, the state government said on Sunday.
Port Harcourt, capital of the southern state, is the hub of the oil industry in Africa’s biggest producer of crude.
On Friday, Rivers State Governor Nyesom Wike said the workers were arrested after entering the state from neighbouring Akwa Ibom State in violation of an executive order restricting movement into the state as part of measures imposed last month to curb the spread of the coronavirus.
He said the workers, whose coronavirus status was unknown, were quarantined in line with relevant health protocols and would be charged in court.
“The Rivers State Government on Sunday released the 22 Staff of Exxon Mobil who were arrested for violating the State Executive Order restricting movement in the state,” said a statement issued by the governor’s spokesman, Simeon Nwakaudu.
They were released without charge “following interventions by well-meaning Nigerians” and no charges will be pressed, the statement said.
Exxon Mobil did not immediately respond to an email requesting comment.
Rivers State has recorded two cases of coronavirus so far. Nigeria has 541 confirmed cases nationwide and 19 deaths. The most high profile victim was the president’s chief of staff, Abba Kyari, who died on Friday.
Nigeria’s petroleum regulator has ordered oil and gas companies to reduce their offshore workforce and move to 28-day staff rotations, instead of the usual 14 days, to help to curb the spread of the coronavirus.
The spread of COVID-19 has been slow in Nigeria compared to other countries on the continent. Nevertheless, the federal government has taken steps in readiness for a more rapid outbreak. Schools have been closed, public gatherings banned by some state governments and most public workers are required to work from home.
Nigeria’s health system will find a full onslaught of COVID-19 difficult to handle. The main reasons are its lack of sufficient isolation centres and testing kits.
The other major challenge is that Nigeria has a very high dependency on imported drugs – 70% are brought in from abroad, chiefly China and India. On top of this, Nigeria relies on imported active pharmaceutical ingredients as well as equipment used in drug manufacturing.
This dependency is of particular concern in the face of a threat such as COVID-19. The reliance on foreign countries may lead to a serious medical crisis in the country if it is unable to source the drugs it needs. China and India have both been hit hard by the pandemic.
It’s important for Nigeria to take stock. It needs to look at lessons learned and build on them to respond better to ensure uninterrupted pharmaceutical supply during pandemics.
Drug security is important
With the numerous health challenges that Nigeria faces – ranging from communicable to non-communicable diseases – pharmacotherapy is the mainstay for vast majority of conditions. Ensuring national sufficiency and drug security is crucial in tackling diseases, reducing mortality and catering for other health care needs.
This no mean task with a growing population of over 200 million. It is important at the same time to combat falsified, substandard and counterfeit pharmaceutical products. All pose threat to the economy and security of the nation.
There are steps the country can take to offset the very high dependency on imports. Manufacturing is one such route.
The manufacture of drugs in Nigeria is on the decline. The main reasons for this are infrastructural challenges – like a lack of consistent energy supply – as well as inadequate financial support to the up-and-coming pharmaceutical scientists.
Others constraints include difficulties in the over-dependence of imported raw materials, weak technology and engineering base, weak industrial linkages and supply chain with high taxation.
Nigeria nevertheless has a relatively sizeable industry. The country is home to more than 115 pharmaceutical companies. These produce for the local markets and for export to neighbouring countries.
Nearly all of the local drug manufacturers purchase active pharmaceutical ingredients from other manufacturers and formulate them into finished drugs. This means that they are limited to purchasing drugs and repackaging them for use.
There is, however, some manufacturing. This includes analgesics, antimalarials, antibiotics, antiretrovirals and vitamins including tablets, capsules and syrups. Others include antitussive syrups, infusions, antacids, antiseptics/disinfectants and injectables.
But there is no significant research and development activity in the country. And most of the pharmaceutical companies in Nigeria have not been able to fully navigate the challenges which makes the operation in the country sub-optimal.
The overall impact of this pandemic may be felt soon, leading to shortages of active pharmaceutical ingredients. This should raise concern about the potential of an increase in fake and counterfeit medicines and drugs. Fighting the sale of fake, counterfeited and sub-standard drugs is a ongoing struggle in the country.
The COVID-19 pandemic should be an opportunity for drug manufacturers to pressure government into doubling efforts to ensure local drug manufacturing.
The federal ministry of health too needs to ensure that the medicines and drugs supply chains are well-coordinated and regulated to ensure that people who need them have access. It should ensure that all drugs listed on the national essential drug lists are readily available and well distributed across the country.
Nigeria is blessed with thousands of medicinal herbs. This is equally an opportunity for the country to strategically improve its research on herbal medicines for diseases management and improve access to medicines.
Developing a sustainable and efficient local drug industry in Nigeria would take decades of dedication by both the private sector and government. It is therefore important for the government to make the country attractive for foreign pharmaceutical companies and also to complement the development of drug manufacturing.
The National Agency for Food and Drug Administration and Control and Pharmacists Council of Nigeria have been making meaningful efforts to ensure and encourage local drug production. Both organisations should do more especially in getting government’s political commitment to encourage local drug manufacturing.
The food and drug agency recently ordered manufacturing of chloroquine for emergency stock for possible clinical trial for COVID-19 treatment.
Interestingly, the federal government has directed the National Institute for Pharmaceutical Research and Development to start research on herbal drugs that will help combat COVID-19.
The challenges facing local drug manufacturing in the country cannot be completely solved during this pandemic. However, it should provide the opportunity for reflection as regards drug security during pandemic.
Yetunde Oluyide has run a gift shop in bustling Lagos for nearly a decade, but with coronavirus curtailing imports of Chinese goods, she is losing more than 2 million naira ($5,555) a month.
Oluyide’s reliance on China to fill the shelves of Yetty-Jewel Ventures reflects the close ties between the world’s second largest economy and Africa’s most populous country.
“For the past two months, we have not been able to ship in anything,” Oluyide said. “I’m anxious.”
China accounts for around a quarter of Nigerian imports, greasing much of the country’s supply chain, and is funding and building much-needed infrastructure.
China’s economic health is also crucial for oil prices, which make up more than half of government revenues for Africa’s top producer, and have tumbled more than 20% since January.
At close to $30 per barrel, oil prices are below the $57 per barrel budget benchmark. And on Thursday, OPEC backed the biggest cut to oil supplies since the 2008 crisis, meaning Nigeria could have to reduce output.
Combined with disrupted supply chains and the threat of coronavirus spreading within Nigeria, this threatens to torpedo growth in its economy and boost borrowing costs just as the country plans to return to the Eurobond market.
Nigeria’s Finance Minister Zainab Ahmed expressed concern this week at the drop, saying that if it is sustained, the record 10.59 trillion naira budget could become unsustainable.
“We will do the mid-term review and if the revenues are so significantly affected we will have to do some revisions by way of budget adjustment,” she said.
Nigeria confirmed its first coronavirus case last week, wiping some 300 billion naira ($980 million) off the value of the local stock market. If the virus spreads, and workers and shoppers stay home, much-needed revenue from a higher VAT rate passed last year will evaporate.
Economies across Sub-Saharan Africa, with just a handful of cases, are all at risk. Angola exports the bulk of its oil to China, while Kenya relies on Beijing for billions in infrastructure funding.
Kevin Daly of asset manager Aberdeen Standard Investments, who holds Nigerian debt, said China’s broken supply chain, and the hit to oil, represent a double whammy.
“We have seen the IMF (International Monetary Fund) revise growth down from 2.5% to 2%, but I think it will be closer to 1%,” he said.
Nigeria’s depleted buffers and shaky exit from a 2016 recession, with growth around 2%, could make this setback harder for it to weather.
Moody’s, which downgraded Nigeria’s outlook in December, has warned that its debt, which has ballooned to 26 trillion naira ($85.5 billion), quadruple the 2008 level, made it particularly vulnerable to external shocks.
Last week, S&P also downgraded Nigeria, citing declining external reserves.
This could increase Nigeria’s borrowing costs as it plans $3 billion in new Eurobond offerings. Aberdeen’s Daly said he expected Nigeria would have to pay an extra 25 basis points over the current curve if it sold fresh debt now.
The yield of Nigeria’s 2049 dollar bond rose by one percentage point from mid-February to end-February.
“Nigeria is getting even more vulnerable – quite significantly so,” said Charles Robertson of Renaissance Capital.
For Oluyide, few vendors outside China can offer the products she wants at the right price. But she is committed to keeping her customers happy.
“We are hopeful that the virus will clear,” she said. “But if not, we are already looking at other alternatives.”
Nigeria will review the sale of power assets to private investors after they have been unable to improve power supply in Africa’s most populous country.
The buyers of the assets are making technical and commercial losses and only distribute a fraction of existing capacity to end-users, the Power Minister said.
While the West African nation can generate 13,000 megawatts, it is only able to transmit about 4,500 megawatts to the power grid with only 3,000 megawatts of that getting to consumers, Sale Mamman, Nigeria’s Power Minister said Wednesday in Abuja.
A proposal to review the privatization has been submitted to the cabinet for consideration. Companies incapable of running the distributors “should give way to whoever that is ready to come and invest,” Mamman said.
Nigeria, which vies with South Africa as Africa’s largest economy, is still grappling with blackouts despite power privatization seven years ago that promised to fix its electricity challenges. Only 60% of residents have access to electricity and even those still remain plagued with regular outages due to poor infrastructure.
A $2.7 billion debt owed to power producers by the state-owned company that buys their output and resell to distributors, is threatening to undermine their viability and crumble the power market.
Nigeria plans to use a $3 billion loan it’s negotiating with the World Bank to tackle mounting debt in the power sector after approving a tariff increase that comes into effect in April.
The Nigerian government recently announced that it had released about 1,400 Boko Haram suspects. The reason given was they had repented and were to be re-integrated into society. The government said the releases – which happened in three tranches – were part of its four-year old de-radicalisation programme called Operation Safe Corridor.
These reactions mask a fundamental challenge facing governments in conflict situations: how does it deal with defectors? Simply executing combatants, or detaining them indefinitely, aren’t viable options. De-radicalisation and re-integration programmes therefore become unavoidable.
As several commentators on the Boko Haram conflict have repeatedly maintained, such as the Carnegie Endowment for International Peace, a purely military solution won’t defeat the group.
Generally ‘de-radicalisation’ is understood to involve having people with extreme and violent religious or political ideologies adopt more moderate and non-violent views. The approach is predicated on the assumption that terrorists, and others with extremist views, can be engaged in a way that can reduce their risk of re-offending.
But there are a number of questions that ‘de-radicalisation’ and ‘re-integration’ programmes raise. These include: is it possible to screen the combatants well enough to measure what level of threat they pose? This is a problem in a country like Nigeria where the basis of selecting those who are being released isn’t transparent. For example, there are allegations that criminal elements in the military have colluded with Boko Haram to secure the release of unrepentant terrorists.
Another question that’s raised is: how can we ensure that the ‘former terrorists’, if re-integrated into the society, do not end up radicalising others in the community, or becoming spies to their former terrorist masters?
And is it fair to rehabilitate the combatants without also rehabilitating their victims?
Most countries faced with violent extremism and terrorism have adopted one form or another of de-radicalisation programmes. Whether they have worked or not is hard to judge because assessments are very often made by people responsible for the programmes. But one thing is clear: governments don’t have many viable alternatives.
Nigeria has three main de-radicalisation programmes. One is located in Kuje prison, Abuja, and was set up by the Nigerian government in 2014. Participants are combatants convicted of violent extremist offences and inmates awaiting trial. The aim of the programme is to combat religious ideology and offer vocational training as a prelude to re-integrating them into communities.
There is also the Yellow Ribbon Initiative which is located in communities in Borno State, in the epicentre of the Boko Haram insurgency in the north of the country. This is organised by a not for profit organisation, the Neem Foundation. It was set up in 2017 and targets women, children and young people associated with Boko Haram.
The third is Operation Safe Corridor, which was set up in 2016 by the government. It targets Boko Haram combatants who have surrendered. This approach targets three key issues: religious ideology, structural or political grievances and post-conflict trauma.
The project engages Imams to work with those in the programme on religion. Participants are also offered training in rudimentary vocational skills. And they are offered therapy to overcome the trauma they faced as members of Boko Haram.
A wide range of countries have introduced de-radicalisation programmes.
In Africa, the four Lake Chad basin countries – Nigeria, Niger, Cameroon and Chad – have their own versions. In Somalia, the Serendi Rehabilitation Centre in Mogadishu offers support to ‘low-risk’ former members of Al-Shabaab.
In Northern Ireland, the Early Release Scheme ensured the conditional release of convicted terrorists under the Good Friday Agreement of 1998. It was deemed essential to sustaining the country’s peace process.
In Colombia, former guerrillas who fought for the Revolutionary Armed Forces of Colombia were invited to join a peace building programme called the ‘collective reincorporation’.
Do they work?
There is no consensus on what constitutes success in reforming a terrorist.
There is, however, general acceptance that a narrow focus on recidivism as the key metric has been discredited. This is because the reasons for peoples’ behaviour isn’t always understood. For example, re-offending could well have been stimulated by new impulses after release. On the other hand, not re-offending does not necessarily mean the person has abandoned extremist views.
There is also confusion about whether any kind of rehabilitation is necessarily brought about by the de-radicalisation programme. For example, it could be more about the desire for freedom, or to access some benefits that go with a rehabilitation programme.
Measuring success isn’t easy. Official information is likely to be biased as the state and groups running programmes are wont to paint a rosy picture to justify the expenditure.
Additionally, whether a de-radicalisation programme is deemed successful or not may be subjective depending on what metrics are used. A good example is the research done for the Tony Blair Institute for Global Change. It praised Nigeria’s Operation Safe Corridor to the high heavens, arguing that it was a model of rehabilitation for Africa as well as the Western world. Yet a report for the Carnegie Foundation was very critical of the programme on several grounds. This included a lack of clarity on eligibility and as well as how former combatants would be re-integrated into civilian life.
Not many options
The question often not asked about de-radicalisation programmes is: what’s the alternative?
Framed this way, it’s obvious that governments facing challenges of terrorism and violent extremism have virtually no other alternative.
But that shouldn’t stop criticism of the way in which programmes are run. The Nigerian government’s release of 1,400 former Boko Haram fighters is a case in point. It was handled badly, not least because the public was told after the event.
The timing was also inauspicious. There is currently a resurgence of attacks by the terrorist group. At the same time President Muhammadu Buhari’s government is facing a declining sense of legitimacy . These factors helped harden attitudes and drove the push-back from Nigerians.
Standard Chartered Bank’s Chief Economist for Africa and Middle East, Ms. Razia Khan, has projected a three per cent economic growth for Nigeria in 2020.
Khan, also projected that for the first time the Sub Saharan Africa (SSA) would witness accelerated growth even as the global growth was predicted to decelerate. She also said that SSA growth would be powered by Nigeria and South Africa’s economies.
She said this during her presentation of Nigeria’s 2020 economic outlook, held in Lagos, yesterday.
Khan’s projected economic growth for Nigeria was slightly above the 2.9 percent growth rate President Mohammadu Buhari proposed in the 2020 budget.
According to her, “2020 is a year we might see SSA economies growing faster in the face of slowing global economy. Growth in the SSA will be driven by the two largest economies in Africa, namely Nigeria and South Africa.”
She predicted that oil price stability and increased crude oil production would power Nigeria’s economic growth 2020.
“We have positive view on Nigeria’s growth because of developments in the fiscal and monetary sectors that will drive more expansion in the Nigerian economy. We have not lowered our Nigeria’s GDP and oil price projection.”
One of the monetary policy stance of the Central Bank of Nigeria (CBN) that would bolster the economy in 2020, according to Khan, was the push for increased private sector lending, which has since unlocked N2 trillion in to the economy.
She also noted that the return of Nigeria’s budget cycle to January-December and early implementation of the fiscal policy tool would enhance the execution of capital projects.
“The difference in 2020 is that Nigeria has reverted to normal budget cycle as early implementation of capital projects will add stimulus to the economy.”
Other developments she identified that would encourage economic growth in 2020 were the enactments of Petroleum Sharing Contract Act of 2019 and the Finance Act 2019 that increased the Value Added Tax by 50 per cent, from five to 7.5 per cent.
However, Khan warned that the ability to ensure compliance to the above legislations would be where the challenge lies for the federal government, adding that previous VAT collection did not meet government’s projected revenue earning from it.
The Standard Chartered Bank’s chief economist also warned Nigeria to do away with the its age-long sharing of oil revenue every month during FAAC, and focus on diversifying the economy so as to earn more revenue from other sources.
She also noted that Nigeria’s problem was not high debt burden, but low revenue mobilisation.
She also projected that a prolonged case of the coronavirus would affect demand for oil and might add pressure on Nigeria’s foreign exchange market.
She, however, noted that the expectation of better GDP performance in 2020 would also depend on return of positive momentum capable of building confidence and attracting private sector investments to make Nigeria economy grow by offering them higher rate on return.
Young Nigerians make up the largest population of the growing flow of migrants from Africa to developed countries. In 2016, over 20,000 involved in the Mediterranean Sea crossing were reported to be from Nigeria.
Understanding their reasons for leaving the country is important if Nigeria is going stem the tide.
I conducted a study to establish the extent to which young people aged between 15 and 35 were susceptible to illegal migration and whether they were aware of what it entailed. I also examined the attitudes and survival strategies adopted by irregular migrants returning to Nigeria.
I focused on three groups of migrants who fall into the “irregular migration” category. The first were those who arrived in a country illegally. The second, those who arrived legally – for instance on the basis of tourist or student visas – and then overstayed the period covered by their visas. And finally, asylum seekers whose claims have been rejected and who have not left the country as required.
My findings showed that most young people who migrated under irregular circumstances were motivated by three factors: economic reasons, family dynamics and social media.
Most said they believed that the “end will surely justify the means”. And that they perceived ability to travel abroad as a sign of success.
We conducted interviews with 63 young people who had not yet left the country in four Nigerian cities: Lagos, Ibadan, Ile-Ife and Benin City. We targeted those susceptible to migration. These included those who were unemployed, in their final year at a tertiary-level education institution and those engaged in Nigeria’s compulsory National Youth Service Corps. We also included seven young people who had tried to migrate but had been returned.
We also ran separate focus group discussions for men and women. We chose people on the basis of whether or not they were familiar with the process of irregular migration.
Once in the groups we asked questions to determine their familiarity with the concept of irregular migration. Most said they were. We also established that most were unfamiliar with formal immigration procedures and that more than half did not have a valid passport.
Most knew someone personally who had travelled out of the country through illegal means such as forging a passport, using unauthorised agents, and travelling to “Europe by road” – as irregular migration is referred to in the popular idiom.
Most expressed positive attitudes about irregular migration, stating that the end would justify the means. They all shared the view that migrants were far better off than those who stayed behind because they had access to a better quality of life.
Bola, a 29-year-old female unemployed youth from Osun State, asserted:
Sincerely, those who migrate outside the country often live far better than we in Nigeria. They enjoy constant power supply, good weather, eat good diet and to a reasonable extent, they are secured.
Irregular migration tends to fester in the face of economic adversity. Nigeria’s economy is in a bad shape. Unemployment among young people is particularly high at 36.50% in 2018.
In addition, poverty levels have got worse. In 2019, the number of extremely poor Nigerians was estimated at 91.6 million, nearly half of the country’s total population. Nigeria also has 87 million people living in poverty.
This increase is one of reasons Nigerians leave the country in search of “Eldorado”. In other words to find security, work and new ways of life in other countries.
A recent report launched by the United Nations Development Program (UNDP) on irregular migration echoed my findings. In documenting the experiences of Africans who had migrated to Europe using irregular means, it identifies a lack of opportunity to exert influence on their governments as reasons for migration.
Finding answers isn’t easy. For example, some of the recommendations made in the UNDP report, such as creating more incentives for young people at home and expanding legal pathways for migration – come across as rhetoric. Most aren’t new either.
Several suggestions have been put forward by scholars and development bodies. These include: facilitating circular migration between European and African countries, tackling the issues of unemployment and underemployment in countries of origin, and addressing the problems resulting from violence and other forms of political instability.
The common denominator is that all efforts must be designed with the aim of making the home a place people don’t want to leave. And programmes to discourage young people from irregular migration must go beyond deterrence and punishments.
There should also be a concerted effort to challenge the fundamentally erroneous beliefs about migration. This must include demystifying fantasies about life abroad and educating young people about the realities of life as an irregular migrant.
Finally, those who stay home and succeed must be celebrated.
The political motive for the Eco move is to ensure that Nigeria is permanently kept out of the currency. As Professor Ibrahim Gambari has always said, France has always defined itself as the main power block in Africa and so has always seen Nigeria's self-definition as an African power as a threat to its interests.
Last Saturday, France, through the instrumentality of its most faithful poodle in West Africa, Alasane Ouattara, kidnapped the West African currency that was to be launched next year for the 15 countries in the region. In a press conference in Abidjan, Presidents Macron and Ouattara announced that the eight West African countries using the CFA Franc currency would adopt the Eco as their new currency next year.
The announcement was done the day the Economic Community of West African States (ECOWAS) was meeting for a final adoption of Eco, also decided for 2020. The French move breaks up the 30-year struggle by ECOWAS to establish a regional currency to promote trade and development.
What France has done is that it takes over the responsibility of establishing and even printing the new currency and presents the other countries in the region with a fait accompli. France is also keeping the new currency attached to the Euro and therefore aligning it with its colonial interest, as it has always done with the CFA. This means that the other seven West African countries can only join on conditions established by France. The implication is that Nigeria is essentially kept out of the currency because the country will not accept the conditionalities established by France.
The long delay in establishing the Eco has been caused by the inability of the 15 ECOWAS countries to meet the convergence criteria they set for themselves. These are that the inflation rate of less than 5 per cent is maintained. The budget deficit is not more than 3 per cent of GDP and that each country has enough foreign reserves to cover at least three months of imports. The problem now is that after failing to meet these conditions over the past two decades, the eight countries have now adopted the currency without meeting them. This means economics has been set aside for political reasons.
There are three political factors that motivated the French decision to take over the baby that ECOWAS has had great difficulty in delivering.
France has become very unpopular in the Sahel because of widespread belief that it was pretending to fight the jihadists in public while supporting them in secret. People are saying that with its vast array of drones, planes and satellite cover, how are convoys of hundreds of terrorists able to drive over hundreds of kilometres and attack soldiers without any warning from the French.
In this tenth year of the battle against Boko Haram, in which France is a major player with troops, planes and drones on the ground, understanding the French role in West Africa is very important and my hope is that we have a strong working group following the issues.
Over the past few years, however, France has become very unpopular in the Sahel because of widespread belief that it was pretending to fight the jihadists in public while supporting them in secret. People are saying that with its vast array of drones, planes and satellite cover, how are convoys of hundreds of terrorists able to drive over hundreds of kilometres and attack soldiers without any warning from the French. These attacks have been happening with increasing regularity and devastating effect. President Macron has been very angry that Sahelians are criticising his country, that he ordered the presidents of the five Sahelian countries to report to Pau in southern France to be told off for not convincing their citizens that France is a good friend. A meeting, which was to hold this December, has been postponed to January following the killing of 71 soldiers in Niger by jihadists. France is therefore using the Eco currency launch as a public relations gimmick to rebuild its battered image.
A professor of Political Science and development consultant/expert, Jibrin Ibrahim is a Senior Fellow of the Centre for Democracy and Development, and Chair of the Editorial Board of PREMIUM TIMES.
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“The Honorable Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva has declared 2020 as the year of Gas for the Nation”, the news piece started.
What amazing news! And certainly long overdue. As it seems, Nigerian officials have finally taken the cue. As I have said ever so often, more than an oil nation, Nigeria is a gas nation. It just doesn’t act like it.
Undoubtedly, natural gas has the enormous potential to diversify and grow the Nigerian economy, power its industries and homes, produce ever-so-lacking wealth, create jobs, develop associated industries in the petrochemical sector, raise people out of poverty, the list goes on.
Mr. Sylva’s demonstrated intent could perhaps become the most relevant political action anyone has taken in Nigeria in years and could change the country forever; and yet, the work ahead is so vast, we can only hope he has the strength to pull it off.
To be sure, naming 2020 the year of gas for Nigeria has a really nice ring to it, but marketing alone will not cut it. Concerted governmental action is essential if we are to see true growth in the liquefied petroleum gas (LPG) sector, and first of all, we need to see a conclusion to the long delayed Nigerian Gas Flare Commercialisation Programme. Sylva stated that this was his main priority, so let’s hope it happens soon.
Once the programme is cleared, oil producers will have a more conclusive alternative to flaring. They will be able to monetize a resource that has so far been wasted, but still that will not suffice.
The flaring issue in Nigeria is tremendous. Every year, 2 million tonnes of LPG are flared, instead of being used as a source of power or feedstock. That means millions of dollars literally going up in smoke. Nigeria’s zero-flaring programme has been on-going for years, and yet, the Nigerian National Petroleum Corporation (NNPC) has just released results that indicate that gas flaring has been consistently increasing over time. More specifically, “a total of 276.04 billion cubic feet (bcf) of natural gas was flared from Nigeria's oil fields between September 2018 and September 2019”. Further, NNPC stated that “the volume of gas flared within this period was more than what was supplied to power generation companies for electricity production which was 275.31bcf”. This is taking place in a country where 45% of the population does not have access to electricity, besides the extremely detrimental effect that has on businesses ability to compete and the extraordinary environmental damage that represents.
Already, the federal government announced in August that it would not be able to fulfill its Zero Routine Flaring target by 2020 and is yet to provide a new deadline for this goal to be achieved.
The problem remains the same as ever. It is much, much cheaper for producers to flare up and pay the fines than do anything about it. This can not continue to be. Stronger action is needed and it falls on Mr. Sylva’s leadership to see it done.
I don’t mean by this to point the finger at oil producers. Most would probably want to monetize that resource, and would if they could. But we lack legislation, infrastructure, pricing regulations, and actors ready to receive the feedstock. They can’t just pipe the gas somewhere and hope for the best. We need to focus on deepening domestic gas penetration and promote adoption amongst the population, foster the development of gas associated industries like ammonia and urea plants, use this resource for power generation, etc. Demand doesn’t grow out of nowhere.
For this to workout, everybody needs to work together. That means the ministry and the NNPC need to partner with the international oil companies, the indigenous oil companies as well as with the country’s financial institutions to create the solutions that can make this industry flourish. That is a tall job, but an essential one.
Of course, the news that the output of liquefied natural gas (LNG) coming from the Bonny LNG-plant is going to expand by 35% once the 7th LNG train is operational is fantastic. Nigeria will strengthen its position as one of the world’s biggest LNG exporters and that will bring considerable wealth for the country, but its people continue to be in the dark.
And LNG expansion projects are something IOCs are well prepared to do, but there are other important roles in boosting the gas industry that have to be taken by others.
I speak of course of marginal field development, a topic that is of fundamental importance to me and that I have extensively covered in my most recent book Billions at Play: The Future of African Oil and Doing Deals. Both for oil and gas, Nigeria’s marginal field development programme showed incredible promise when it was first launched in 2013. It gave opportunities to local companies to explore smaller discoveries that were uninteresting for the majors, which in turn allowed them to gain experience in leading exploration and production projects on their own. Further, it opened opportunities for domestic use of natural gas for power generation. That programme is now being copied by Angola, and yet, it has stalled in Nigeria.
Further, as I have extensively debated over the years, and most extensively in Billions at Play, we need to dramatically invest in Nigeria’s ability to negotiate and manage contracts. This applies both to the need to respect the sanctity of contracts, a fundamental part of giving international investors the confidence to trust that what they sign for will be respected, but also learning to choose who to sign contracts with. The current debacle with P&ID, an unknown little company that has managed to sue the Nigerian government for breach of contract in the English courts and is seeking USD$9.6 billion in compensation, is an incomprehensible situation that should never have taken place. We need to know who our partners are and who we should be signing contracts with, and then stick by them.
Only by combining the role of the majors, the indigenous companies, the necessary infrastructure development for gas transportation, bridging with the nation’s banks to help finance projects and by giving a clear legal framework to the sector, can we hope to succeed. I do not doubt that this is possible to accomplish in 2020 and the years to come, but coming from the experience of recent years, it does not seem probable, and no one pays the price for that more than everyday Nigerians, that continue to fail to benefit from its country’s resources.
Action is necessary as a matter of urgency.
This week it was disclosed that international oil and gas companies were holding back an estimated USD$58.4 billion in investments in oil and gas projects in Nigeria because of regulatory uncertainty. Foreign Direct Investment in Nigeria was USD$1.9 billion in 2018. It’s not like we don’t need the money.
But how can we expect international oil companies to feel comfortable signing off on billions in investment if after 20-plus years of negotiations we still haven’t managed to settle on the Petroleum Industry Bill that will oversee the sector? Who can blame them for waiting to see what happens? They are waiting for us to figure out how we want to regulate the industry, and after 20 years, we still don’t seem to know. That has to change, and soon.
Nigeria has an estimated 200 trillion cubic feet of gas reserves. It is high-time to put them to use. With the right policies we could change the face of the country completely. We could give light to our people, we could power our industries, releasing them from the handicapping dependency on diesel generators that make it all but impossible for them to be competitive, we could relinquish ourselves from our dependency on imported fuel for power and heat, we could create new opportunities for job creation and industrial development, we could take millions of people out of poverty... Further, strong domestic gas and gas-based industries could help boost intra-African trade, create new synergies with our neighbours, boost integration of power generation networks, establish new partnerships, even contribute to peace.
What I am saying, I say as an African, and it applies to many countries across the continent. However, Nigeria is in a prime position to truly enact change and be a beacon to others by showing leadership and resolve. It is the continent’s biggest economy and has the continent’s biggest reserves of hydrocarbons, both oil and gas. NNPC already works with some of the best major IOCs and the country has Africa’s best and most developed indigenous exploration and production capabilities. Let’s give ourselves the opportunity to be better and to live better, by taking advantage of the resources we already possess.
Mr. Sylva is showing leadership and drive. So far, he has proven himself to be the leader that Nigeria needs to develop new LPG and LNG industries that will take the country to the next level of development, not only economically speaking, but socially, environmentally, humanly. So let’s hope he can pull through the great transformations that need to occur for 2020 to truly be Nigeria’s year of gas.
As part of Dangote Industries Limited’s commitment to the Federal Government of Nigeria, Group President/CE of Dangote, Aliko Dangote took the Minister of Works and Housing, Babatunde Fashola on an inspection tour of the 35-kilometer Apapa-Oshodi-Oworonsoki-Ojota highway currently under construction by Dangote Industries Limited.
The work began in 2018, as part of a bargain between the company and the Federal Government to enjoy a 10-year tax rebate that accrues to N72.9 Billion. The road has been subject of heavy traffic flow. An initial attempt to work on the road fell apart, it was approved for N15 Billion in 2013, work on the road stopped after the 2015 general elections.
During the inspection, Fashola told members of the press, “The Federal Government is dedicated to the speedy completion of the highway to provide a lasting solution to the problems of bad roads, and gridlocks”
Previous efforts by both Federal and State governments to solve this bottleneck have been unsuccessful.
“We expect that by the end of 2020, the entire road network will be finished, you will have a road that will last for 40 years.” Aliko Dangote during the inspection said;
Speaking on Dangote Industries Limited’s struggles, Dangote complained about the congestions at the ports, the gridlock which cost the company about N25 billion in revenue between 2017 and 2019 financial year.
Praising the quality of the road been constructed, Dangote assured that it will revive commerce around the Apapa area. “This road will actually open up the economy. It will bring a lot of jobs and a lot of factories that have moved out will be able to move back.”
The road is on track to be concluded before the end of 2020. This is the first attempt to rehabilitate the busy road since it was first completed in 1978. Fashola also spoke about the economic revival of the Apapa area,
“Businesses have started coming back on Liverpool Road because the road closed earlier is now back. You will see more of that. All of the businesses that are shut on Creek Road will come back. We expect to see property redevelopment and property renewal once the road is completed.”
Fashola also explained that the project will be creating wealth around the surrounding areas as trucks will be needed to convey different materials to the site of the construction, and also labor to help with the process. The project has also seen over 600 people directly employed.
Speaking of how President Buhari plans to bring 100million people out of poverty, Fashola explains that the economy around the construction will provide jobs and opportunities for Nigerians.
“Once the economy of Apapa returns, all the clearing and forwarding, shipping, newspaper companies and all others doing business will resume fully and the economy will bounce back.’’
He lauded the private/public partnership scheme with Dangote and pointed out that section two of the project, which was not part of the original contract was already showing signs of failure, due to heavy traffic.
While inspecting the road around the Oshodi area, Fashola had this to say
“We are at the Oshodi area now and one side has been concluded and opened to traffic and this is how we intend to continue to complete and open until we finish the entire road,”
Dangote said: “What I can also assure you is that this road will be finished before the end of next year.’’