Nigeria’s liquefied natural gas (LNG) export industry is facing significant challenges as feedstock shortages have led to a 13 percent decline in exports.

According to the latest 2024 World LNG Report by the International Gas Union (IGU), LNG sales from Nigeria dropped from 15.1 million tonnes in 2022 to 13 million tonnes in 2023.

This decline has caused Nigeria to fall from sixth place to eighth in the global LNG export rankings, losing its spot to Indonesia and Algeria, who exported 15.6 million tonnes and 13 million tonnes of LNG, respectively.

The primary cause of this setback is the dwindling supply of natural gas available for liquefaction. Various factors, including declining output from aging oil fields and pipeline vandalism that disrupts gas transportation, have contributed to the feedstock shortages.

The IGU report noted that Nigeria LNG declared force majeure on some cargo loadings in October 2022 due to significant flooding across its upstream gas supply production regions, which required several gas production wells to be shut down.

While flooding conditions have since been resolved, feedstock deliveries have not fully recovered due to ongoing pipeline vandalism.

This situation has severe consequences for Nigeria. The LNG industry has been a significant revenue generator for the country, and the loss of market share translates to a substantial decrease in income.

Also, the decline could potentially lead to job losses and hinder economic growth. In 2023, Nigeria LNG (NLNG) paid over $40 billion in dividends, with 49 percent going to the Federal Government of Nigeria through its shareholding in the company via the Nigerian National Petroleum Company (NNPC) Limited.

Payments to joint venture feed gas suppliers from inception to date amount to approximately $32 billion, with 55 to 60 percent of these payments going to the Federal Government through its shareholding in NNPC Limited.

Industry experts highlight several critical reasons for the decline in gas exports and production. Ayodele Oni, a partner at Bloomfield LP, cited insecurity and vandalism of gas infrastructure, which often result in significant losses and production disruptions.

The exit of some major International Oil Companies (IOCs) has also led to a reduction in investment in the gas sector, further exacerbating the problem.

Poor gas infrastructure and the shift of some IOCs from onshore and shallow waters to deep offshore fields, leaving indigenous companies with significantly larger responsibilities, have also contributed to the decline in gas exports and production.

Nigeria’s ability to regain its footing in the LNG export market hinges on addressing these challenges. Increased investment in gas exploration and infrastructure development is essential to ensure a steady supply for LNG production.

In March, Ekperipe Ekpo, Minister of State for Petroleum Resources (Gas), assured that serious work was ongoing to resolve the crisis in gas feedstock supplies to LNG production and distribution companies.

He reaffirmed the government’s commitment to bolster the nation’s gas supply and reassured a sustained increase in gas production and distribution.

“We are moving towards zero emissions, and we need to do everything to supply gas to Nigerians,” Ekpo said, highlighting the government’s proactive measures to address energy challenges and meet growing demand.

Kenya’s National Treasury will significantly reduce expenditure and take on additional loans to compensate for the revenue plans it was forced to abandon following deadly protests.

The government initially planned to introduce new taxes to raise 346 billion shillings ($2.7 billion) in the fiscal year beginning July 1.

However, these plans were scrapped after violent demonstrations resulted in the deaths of at least 41 people.

In a live address on Friday, President William Ruto announced that the Treasury would cut expenditure by 177 billion shillings and borrow the remaining amount.

“We would be proposing to the National Assembly a budget cut of not the entire 346, but a budget cut of 177 billion and borrowing the difference,” Ruto said.

“Cutting the entire amount in our assessment would significantly and drastically affect the delivery of critical government services, while borrowing the whole amount in full will occasion a fiscal deficit by a margin that would have significant repercussions on many sectors, including our exchange rate and interest rates.”

The revised fiscal strategy will increase the budget deficit for 2024-25 to 4.6% of gross domestic product, compared with an earlier estimate of 3.3%, Ruto noted.

Also, the president stated that he would appoint a panel to carry out a forensic audit of the nation’s debt.

The borrowed funds will enable the government to continue with plans to hire tens of thousands of junior secondary school teachers, write off debt owed by coffee farms, retain a fertilizer subsidy, and settle arrears owed to counties and for pensions.

The government will also dissolve 47 state corporations with overlapping functions, he added.

In an effort to directly engage with citizens, Ruto held a two-hour-long X Spaces session, where he addressed questions from protesters.

As many as 3.3 million people tuned in, according to the social-media platform. During the session, Ruto fielded questions on a range of topics, including deaths during protests, alleged abductions of protesters by police, corruption by public officials, unemployment, and the economy.

“We didn’t do as much communication as we should have, and that is a regret that I have admitted,” Ruto said, acknowledging the government’s failure to effectively promote his economic agenda.

Odanga Madung, a researcher at web browser maker Mozilla, said “Taking to X to address his citizens just shows how bad his communication team is, as social media has been the cradle of the protests,” Madung said by phone.

“He needs to stop all the pandering and respond to Kenyans’ concerns by taking direct action on the issues they are concerned about.”

The government’s revised fiscal plan reflects the complex challenges Kenya faces as it navigates economic instability and public unrest.

The Senate has called on the Federal Government to enhance funding for the capital components of the national budgets, which are currently lagging behind.

This call was made during a session on Wednesday by the Chairman of the Senate Committee on Appropriation, Senator Solomon Adeola, who emphasized the importance of capital expenditure in showcasing the government’s performance and driving national development.

During the session, Senator Adeola expressed concerns over the inadequate funding of capital projects in the 2024 national budget.

He highlighted that only N1.84 billion out of the allocated N9 trillion capital expenditure had been utilized so far, a figure he described as “nothing to write home about.”

“It is the capital component of the budgets that will showcase this government largely in terms of performances,” Senator Adeola said. “The capital components tend to showcase various projects that will be executed by this government, and people can say the government is doing this, it’s doing that. That is why we are emphasizing the performance of the 2024 capital component of the project.”

The committee session featured appearances by the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, and the Accountant-General of the Federation, Oluwatoyin Madein, who were invited to discuss the performance of the budgets.

Adeola urged the Finance Minister to engage more with the Ministries, Departments, and Agencies (MDAs) to ensure they are aware of the current funding arrangements and to accelerate the release of funds for capital projects.

The Senate also plans to organize a public hearing on the Nigerian National Petroleum Company Limited (NNPC), inviting stakeholders from the oil and gas sector, including the Finance Minister, to discuss the corporation’s financial operations and strategies.

Despite the challenges in funding capital projects, Adeola commended the Finance Minister for achieving 100% funding for the 2023 supplementary budget.

However, he stressed the need for consistent updates and periodic reports on the implementation levels of these projects to ensure transparency and accountability.

In response, Minister Edun acknowledged the Senate’s concerns and pledged to intensify efforts in monitoring revenue-generating agencies and improving the funding of capital projects.

He also provided updates on the Federal Government’s ongoing forensic investigation into the N30 trillion Ways and Means, aimed at scrutinizing past financial practices to enhance future fiscal responsibility.

Edun highlighted the challenges faced in the procurement of electric and Compressed Natural Gas (CNG) vehicles due to a spike in freight costs, but reassured that efforts were being made to address these issues.

“We are also interrogating the N22.7 trillion that we met on the ground. We instituted a forensic audit to see the impact. We are also interrogating the revenues that are due to us from everybody because we need to,” Edun said.

The Senate’s call for increased capital budget funding underscores the critical role of capital expenditure in national development, infrastructure improvement, and public service delivery.