- Nigeria’s Projected 2.5mbpd Oil Output Cannot Grow Economy
The Nigerian Association of Energy Economics (NAEE) has said Nigeria’s constant projection of 2.5 million barrels per day (mbpd) of crude oil production in her national budget will be inadequate to grow her economy, stressing that the country needs to produce at least 4 million bpd to boost the economy.
NAEE also said the country’s continued reliance on generating sets to provide the energy needed by her economy was abnormal.
It said the country appeared unserious with the kind of energy policy it wanted to pursue for her economic growth.
President of NAEE, Prof. Wumi Iledare stated at the association’s celebration of the 2016 World Energy Day in Abuja, that the 2.5mbpd oil production projection of the country showed that her economy is not competitive and growing at a rate commensurate with that of her competitors.
“My premise is that if you look at the population of Nigeria and what you need energy to do, and I gave an example of the population of the United States with 300 million people, they consume 16 to 8mbpd and translated that to us that if the Nigerian economy is actually growing the way it is supposed to grow, the 2.5mbpd will be used by our economy and there won’t be any to export,” said Iledare.
He also said: “So, I foresee a situation where if we are going to have any oil export at all, we should be targeting at least 4mbpd. If we are going to grow our GDP at 12 per cent per annum to be able to catch up with the world, we cannot use our oil for money, we should use our oil for power and 2.5mbpd cannot generate the electricity that we need to grow our economy. Oil is an input of production and that is what it should be. If this economy expands, 2.5mbpd will not sustain it.”
Iledare also spoke on the country’s electricity sector, saying that the economy’s reliance on generating sets as an energy source was unsustainable.
According to him, “4000MW of electricity for 170 million people cannot grow the economy and the only reason why we are still happy is because we are looking at energy from a residential point of view. 4000MW for an economy like ours is a child’s play and that is why we depend on generators.”
“It is inefficient to use generators to power an economy and that is why the cost per dollar of GDP in Nigeria is significantly high, meaning that our economy is using energy inefficiently,” he stated.
He said on claims by electricity operators in the country that they do not have a tariff that is cost reflective for investment in the sector: “All over the world, when you are in a monopoly market, you cannot allow the supplier of that monopoly product to fix the price. In the energy sector, the price cannot be uniformed because the cost of distributing energy to different sectors of the economy will be different.”
“When you find out the cost of what it will take you to deliver your energy, you go to the NERC and debate it to get the tariff that will fall within the expected investment costs. You cannot increase tariff without investment that is where the problem is, the Discos cannot ask for a higher price if they do not have the evidence that they actually invested money to improve services,” he added.
Tinubu Forms Economic Advisory Committee with Private Sector Titans
In a bid to address Nigeria’s economic challenges amidst soaring inflation and currency depreciation, President Bola Tinubu has announced the formation of an Economic Advisory Committee with influential figures from the private sector.
The decision follows a high-level meeting held at the State House in Abuja, where key stakeholders deliberated on strategies to stabilize the economy and mitigate the rising cost of living.
Among the notable members enlisted to the committee are Tony Elumelu, Chairman of United Bank for Africa, and Aliko Dangote, Chairman of Dangote Group, both distinguished figures in Nigeria’s business landscape.
The inclusion of these private sector titans underscores Tinubu’s commitment to engaging diverse perspectives and expertise in charting a path towards economic recovery.
Speaking on behalf of the federal government at the meeting, President Tinubu emphasized the imperative of collective efforts in revitalizing the economy and ensuring a brighter future for all Nigerians.
He underscored the importance of addressing pressing issues such as food security, job creation, and the stabilization of the exchange rate.
In response, Aliko Dangote expressed optimism about the committee’s potential to generate actionable recommendations that would foster economic growth and alleviate poverty across the nation.
Similarly, Tony Elumelu highlighted the significance of implementing effective policies to drive employment opportunities and enhance food security.
The committee’s mandate encompasses a broad spectrum of economic concerns, including currency stability, inflation management, and fiscal policy reforms.
As Nigeria grapples with the multifaceted challenges of a turbulent economy, the collaborative efforts of government and private sector stakeholders signal a proactive approach towards finding sustainable solutions and restoring confidence in the nation’s economic prospects.
Federal Government Halts Cooking Gas Export to Lower Local Prices
In a bid to stabilize domestic prices and meet rising demand for cooking gas within Nigeria, the Federal Government has announced a temporary halt on the exportation of Liquefied Petroleum Gas (LPG), commonly known as cooking gas.
This decision follows a significant surge in the cost of cooking gas, which has placed a strain on consumers across the country.
According to reports, the halt in LPG export aims to increase the availability of the commodity within Nigeria’s borders, thereby reducing its local price.
The move is part of broader efforts to address the challenges faced by consumers grappling with the high cost of living.
In recent years, the demand for cooking gas has steadily increased in Nigeria, driven by urbanization, population growth, and a shift towards cleaner energy sources.
However, despite being a major producer of LPG, Nigeria has struggled to meet its domestic demand due to insufficient local production and distribution infrastructure.
Data from the Nigerian Midstream Downstream Petroleum Regulatory Authority reveals that while the total consumption of cooking gas in Nigeria has been on the rise, the country has relied heavily on imports to bridge the supply gap.
The recent decision by the government underscores its commitment to prioritizing the domestic market and ensuring that Nigerians have access to affordable cooking gas.
Consumers have been grappling with escalating prices, with reports indicating a significant increase in the cost of refilling a 12.5kg cylinder of cooking gas in major cities like Abuja, Lagos, and Kano.
The decision to halt LPG exports signals a proactive measure by the government to mitigate the adverse effects of rising prices and alleviate the financial burden on households across the nation.
Manufacturing Sector Records 7.70% Quarter-on-Quarter Growth in Q4 2023
In the fourth quarter of 2023, Nigeria’s manufacturing sector grew by 7.70% year-on-year, according to the National Bureau of Statistics (NBS).
The surge in growth reflects a significant uptick from the preceding quarter and underscores the resilience of the manufacturing industry amid economic challenges.
This growth trajectory indicates positive momentum and signals potential opportunities for economic recovery and development.
The manufacturing sector, comprising thirteen key activities ranging from oil refining to motor vehicles and assembly, demonstrated notable dynamism across various subsectors.
This growth surge is attributed to increased production, enhanced operational efficiencies, and strategic investments across the manufacturing value chain.
Despite facing headwinds such as supply chain disruptions and regulatory uncertainties, the sector’s robust performance underscores its pivotal role in driving economic diversification, job creation, and industrialization efforts in Nigeria.
Moving forward, sustaining this growth momentum will require continued policy support, investment in infrastructure, and efforts to address key bottlenecks hindering the sector’s expansion.
By fostering an enabling business environment and promoting innovation and technology adoption, Nigeria’s manufacturing sector can further catalyze inclusive economic growth and contribute significantly to the nation’s development agenda.
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