WEDNESDAY COLUMN by USSIJU MEDANER
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This page considers a viable pathway for the Nigeria economy post Covid-19 pandemic; turning the tragedy into an opportunity for a new Nigeria on growth trajectory. It is no news that like every other nation of the world impacted by the coronavirus outbreak, today, our economy is also partly down, calling for the best of options to be considered, explored and implemented. I share the optimism of all patriotic Nigerians that the gloominess would pass and the time to rise would come. We would then have to rise beyond the current debacles and showcase the spirit of Nigeria doggedness to survive hard times and situations.
I have seen that we are in a new dispensation in our dealings with the pandemic; a new reaction playing out globally. Nations and leaders are beginning to defile the veracity of the pandemic to reopen their communities and economies. Whether we are clinically ripe for this critical decision in the face of new realities of increasing infections and hospitalization we are seen now is a secondary issue. We are now seen citizens staging attempts to discredit the existence of the virus; we have seen Nigerians accusing the government of making up the numbers and spearheading smear campaigns, taking matters in their own hands to exit the lockdown, especially resuming public religious activities. On the foreign scene, we have also seen a President who has alluded that his medical experts are making up the numbers to prevent him from immediately reopening the economy to hurt his electoral odds.
However, while there are no known perfect solutions out there yet an inevitable consideration is to characterize the virus as endemic and learn to live with it.
The global economy is heading for its worst year since the financial crisis of 2008. A huge population of our people could be pushed into extreme poverty if the ominous situations as it is now is not curtailed as soon as feasible. Accompanying events in the oil industry, yet, a linchpin to the nation has only made the condition of our national economy more critical and desperately in need of strategic committing, multifaceted responses.
There has been the argument that Nigeria wouldn’t have been in this situation if the COVID-19 pandemic had not appeared from nowhere to incense all known systems of things and forced all structures to their knees. We may however not know for sure if we – by which I mean Nigeria – would not still have been struggling with gross drop in national revenues occasioned by the twin problems of oil price fall and the lack of buyers for the product. I do not think we are shaping down our budget size because of Covid-19 but because our national and state incomes projection are no longer realistic, being a reflection of the reality of global oil politics.
We are currently at a point in our national existence where unveiling appropriate measures and objective responses to the ongoing global pandemic and the crumbling effect on our economy is of great importance. The global communities have started preparing for a global recession, and we are at a junction where nations would mostly survive on their own as limits are being placed on the extent of collaborations and international aid. This new age represents a global shift away from multilateralism to self-survival and preservation; a season when we must engage all of our resources towards designing strategies that will safeguard our social infrastructure and economies against the storm ahead. This made it imperative that our nation must move away from mass importation and start providing for its needs internally or face the biting consequences of the coming global recession. Summarily, we cannot afford to continue to rely on the world for our survival.
It is certain that the government was not totally unaware of this reality and necessity. The CBN ambitious N3.5 Trillion stimulus packages and measures aimed at cushioning the effect of the outbreak on our economy and social life is an indication of that. The stimulus package, officially, is targeted at households, businesses, manufacturing, healthcare providers, power, education and agriculture with the aim of paddling the nation sustainably and efficiently through this season and lay a fresh foundation for a new Nigeria that is more resilient and more self-reliant.
Now, there seems to be a great divide between what the government plans and what the people get. The impact of the immediate palliatives and measures seemed so great on paper but not in reality. The physical reach of the interventions, stimulus packages and now palliatives and subventions, have been relatively little on the lives of ordinary Nigerians and the impact on local production, agriculture and other sensitive sectors have equally been minimal. There appears, as it has always been, a disconnection between the state and the people and a need for the government to reappraise his policies and programs implementation module. The present Administration must be willing to work along with the citizens; to create a state-citizens synergy that will guarantee the turning of the Covid-19 tragedy into an opportunity for Nigeria.
It is not enough that we are surviving and for the next few months, with guarantee of workers’ salaries and pensions, rather we deserve a sustainable growth and survival package, capable of meeting the needs of the current generation without compromising the future needs of the nation. The Nigeria question therefore is what are we falling back to? What is our stopgap measure? Where do we go from here, the life beyond COVID-19 and the thriving liquid oil industry?
Some of us might think all we need to do is to endure the storms and see it pass by, but experts’ submissions are not going that way. Currently, a number of existential factors threaten the survival of the oil industry including the politics and somewhat unstoppable forces set to permanently crumble the century-old dominant industry. It is not a hidden fact that the world is mulling a replacement as a safer energy source; renewables are erupting; cars are being built to run on electricity and natural gas is fast becoming the preferred fuel of choice in place of oil.
So, when I asked earlier: where are we going from here, I do not see us having that much of a way out. Nigeria of today is limited in immediate choices, but that would not be for too long if only we can take the right path now. Manufacturing would have been great; companies opening up; exportation on the rise; positive terms of trade; abundant employment opportunities, but unfortunately a country does not go the way of manufacturing without resources which is inadequate right now. There is currently a limit to our capacity to develop basic infrastructure because doing that is not a function of resolve but of resources.
For Nigeria to survive the post-Covid-19 pandemic and return back to its feet and even much stronger in the nearest future, there are two ways to go and the two we must follow simultaneously; which are intensifying agriculture and a resolute commitment to fully develop the nation’s gas capability down it entire value chain.
My argument and suggestion for a robust reevaluation of the nation’s commitment to the development of the agricultural sector hinges on two distinct but related needs of the nation. Currently, the farming season has experienced substantial disruptions enough to ignite a national crisis of the order of the Covid-19 in the next few months if we do not immediately devise a working response to the challenge. I would strongly advise a declaration of an immediate state of emergency on food production in the country. Committees, teams and sub-teams that would get farmers back to the farms in the safest way possible should hit the ground working.
We should immediately begin to see an unprecedented government direct involvement in food crops farming in Nigeria. We should start seeing partnerships that lead to increased quantity and quality of farm yield this current year. What we have lost to the pandemic in farm take off can still be regained if the government would take its position as director of the sector for the rest of the season. It is not too late to coordinate farmers associations across the country; organize flow of inputs; access to loan facilities and incentives. This would also be the best time for the government to take up farmlands to fill up silos and reserves across the country.
Public health consideration, as we urge the mass return to farms, must also have to remain high. This would mean government educating the farmers on what measures are required to guarantee their health safety; the community and religion leaders taking up the responsibility of sensitizing and providing due leadership and directions for the farmers as they return back to the farm.
The second need of the country for massive direct investment in Agriculture is in finding a worthy replacement for depleting oil income for the nation. If there is any sector that offers a promising prospect of flow of income for the nation, definitely, it is agriculture. If the Nigerian government wants to show sincerity in its concern for the national economy revival, then the government must have to convene an assembly to discuss and fine-tune the nation’s return to its lost agricultural glory.
So, what is the way forward? What are the decisions that must be made? I think we must unanimously agree that we must at all cost attain sufficiency in basic food production, increase local processing of export crops, increase agricultural raw materials for industries, generate gainful employment through agriculture and grow to rationally utilize all our agricultural resources.
And how do we achieve these? We must know and agree that we can produce almost all the food we eat because we possess the capacity and the population. We must all become serious, beginning from the government at all levels; we must identify all the food items we import; we must give a time frame for total stoppage of their importation; we must encourage and mobilize farmers to the farm.
Then we should identify the crops of import values and engage our full capacities via state-citizens synergy to produce both for industrial uses and exportation. We can only take advantage of our own population and rich land availability to turn the current economic woe around for our benefit. It would not be out of place if in the next few years we become agriculturally established again to export a half of all our products in Rice, yam, cereal, wheat, beans, tomatoes and pepper, palm oil, groundnut, hide and skin, poultry products, beef, cocoa, rubber etc.
Can we do it? Yes, but only if the government would give the necessary leadership.
As we unfold and implement the agricultural pathway, we should equally divest fully in harnessing the nation’s full potential in the gas sub-sector of the oil and gas industry. Unknown to many Nigerians, the country is a gas province with deposit of oil; what this means is that the blessedness and endowment of the country is more in natural gas, with the country proven reserves of about 200 trillion cubic feet (tcf) of gas and an enviable position as the 9th largest gas reserves holder in the world.
Unfortunately, the Nigeria government has made only minimal efforts to give priority consideration to the exploitation of the gas potential of the country beyond the investment in LNG. The same way we are ending the liquid oil era without domiciling the gain of the natural gift in Nigeria, has been the same path we have taken as far as natural gas is concerned. Till now, we have only been interested in processing LNG for export to earn foreign exchange; beyond that, efforts at developing critical gas infrastructures and utilization pathways that would actually evolve the industry to open up to benefit the local economy through creation of job, natural gas related technology centers, businesses along the entire gas value chain among other benefits were never our priority.
This is the time to up our investment in natural gas. It is the fuel of the future. It is one of the cleanest burning fuels and more environment-friendly when compared to other fossil fuels. But the argument for natural gas is not limited to its advantageous characteristic, politicking of global energy is also in favour of the resource; countries that dictate the tune of energy direction of the globe have enough supply of it to last a lifetime and become considerably energy independent. So by 2040, we are looking at about 30 percent of the world’s electricity coming from natural gas turbines.
We must also recollect that the resource, natural gas is the ingredient used to make fertilisers, antifreeze, plastics, pharmaceuticals and a wide range of chemicals including ammonia, methanol, butane, ethane, propane, acetic acid etc. if we further consider the prospect of Liquefied Petroleum Gas (LPG) deep penetration into the nation’s economy and Compressed Natural Gas (CNG) as automobile fuel with its many advantages and then also as an industrial fuel, it would readily occur to us what we have been losing in aggregate neglect of the natural gas value chain as a country.
Let us imagine the scenario where beginning with the current NLNG six trains producing 22 million tonnes per year of LNG, being 10 percent of the current world’s LNG consumption and a yearly huge earnings for the government is improved upon by keeping to the terms of bringing on the train seven as early as 2024, raising the nation’s annual LNG production to 29.7 million tonnes; and then simultaneously installed local capacity to improve LPG processes, mass adoption and utilizations by as much as 70 percent of Nigerians. And then we open up the CNG sub-sector to create alternate and cheaper industrial fuel for industries across the country and at the same time get as much as 40 percent cars on our road running on it. And finally, in the fashion of modular refineries, we have petrochemical industries littering the country and producing regulated products for both local usages and exports.
If we do this, we would be creating job opportunities in the region of tens of millions across both the agricultural and gas economies of the country, increased in individual incomes of a large population of Nigerians, improved manufacturing capacity, infrastructural development, increased GDP and standard of living of Nigerians, but more importantly, a springboard for the country to begin the fresh climb to real and sustainable greatness.
God Bless The Federal Republic of Nigeria!