Nigeria is well acclaimed for its overdependence on Crude Oil, unfortunately for the nation, the carpet has been pulled from under its feet as the world gears towards sustainable energy sources leaving little to no demand for its oil.
Nigeria is still hopelessly dependent on crude oil and so anything the impacts the price or demand for crude oil impacts us. And because we have no fiscal buffers or significant foreign reserves the impacts will be significant
Dr Nonso Obikili, Director at Turgot Centre for Economics and Policy Research
Crude Oil currently accounts for 90% of the country’s export proceeds and makes up 60% of the government’s revenue. In the midst of rising inflation currently pegged at 17%, an unemployment rate of 33%, accruing foreign debt due to unsustainable loans, and rising insecurity affecting local production of crops, the nation’s situation is dire indeed.
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There seems to be a green light just at the end of the tunnel as Nigeria is also home to 3% of the world’s Natural Gas reserves. The country’s known gas reserves currently stand at 6,923 Tcf, equivalent to 306.3 times its annual consumption levels.
Coincidentally, in line with the drive for sustainability in line with the SDG goals, the demand for Natural Gas has shot through the roof hitting a 40% increase in demand over the last few weeks.
Natural gas is a clean-burning fuel source. Compared to oil, it is less expensive to produce, versatile, and is becoming a competitive energy source especially when its impact on people and the environment are considered.
Earlier this year, President Muhammadu Buhari on his official Twitter page announced “The Decade of Gas”. An initiative that allows Nigeria to diversify its economy, leverage on its huge gas reserves, and become an entirely gas-powered economy by the year 2030. This initiative is beneficial for increased domestic economic activity and could contribute to an increase in employment in the natural gas industry.
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While it will be foolish for the Federal Government to tow the same line as with Crude Oil, the economic potential Natural Gas offers could give the nation the much-needed boost to escape its current economic dilemma and a window period to diversify its inflow of resources
Revised by Damilola Banjoko