Nigeria’s energy insecurity has manifested in a most remarkable form due to the outbreak of novel coronavirus pandemic, presenting an opportunity for Africa’s most populous country to rethink its energy security strategy.
With countries on lockdown, there is significantly less of all activity and the demand for oil and gas has fallen spectacularly
According to Chukwudi Okeke of the department of public administration and local government, at the University of Nigeria Nsukka, energy security refers to a condition in which a nation and a majority or all of its citizens and businesses have access to sufficient energy resources at reasonable prices for the foreseeable future, free from any serious risk of disruption of service. In this regard, energy resources include petroleum products and electricity.
For countries that are net importers of energy resources such as the United States of America, Europe and China, energy security implies diversifying energy suppliers. The logic of energy security for energy exporters is the inverse. It means diversifying foreign buyers for their energy resources in order to achieve security of demand.
Overall, the energy sector, a key pillar of foreign direct investment in Nigeria is forecasted by GobalData to face downward earnings revisions of 208 percent in 2020, with the shock compounded by the oil price crash. Oil prices have decreased by more than 50 percent since January 2020, with the US reporting record lows.
With countries on lockdown, there is significantly less of all activity and the demand for oil and gas has fallen spectacularly. The International Energy Agency reported that oil demand is likely to decrease by 29 million barrels per day in April 2020 and by 23.1 million bpd in the second quarter of the year.
“I have been doing sessions about Nigeria virtually and often my co-panellists state 90 percent of Nigeria’s foreign exchange comes from oil. This is inaccurate. Nigeria’s biggest export is the Nigerian brain,” Andrew Nevin, chief economist at PwC Nigeria said in a tweet.
Energy security not brain drain is the focus here, but it is worth mentioning to underline the reality that Nigeria’s dependence on crude oil export is contrived and now is the time to concentrate on domestic energy security.
Domestic energy security in this context means a sustained availability of affordable energy in its various forms, which is fundamental to the provision of jobs, food, health services, education, housing, clean water and good sanitation. Energy security is the foundation stone and the pillar, upon which every advanced world economy is built.
All economic activities: the industries, the factories, the schools, the businesses, the markets, the hospitals, the service companies, the hotels, tourism and all the public and private sectors need constant energy to function effectively. This is the goal of domestic energy security and leads to industrialisation, which in turn grows productivity and creates wealth for many Nigerians.
In the Southeast Asian nations, China and India, known for the strength of their manufacturing sector, the capability of electricity production depends on the strength of fuel sources of energy production and their high technology. Meanwhile, both countries are net energy resource importers. In Singapore, energy for electricity production comes from only two kinds: 80.30 percent of natural gas and 19.70 of petroleum.
For Nigeria a nation-wide domestic energy strategy is urgent. Unemployment data from the National Bureau of Statistics (NBS) show geopolitical zones with most industries have lower unemployment rates.
The South-South regional zone had the highest unemployment rate of 32 percent in the thirst quarter 2018 despite its oil and gas resources. South West recorded the lowest unemployment rate of 14 percent. The North West Zone recorded the highest underemployment rate of 27 percent for the quarter.
“We should have some development agenda for Northern Nigeria, to calm tensions down, energy security is a key part of this; it is too expensive to run anything on energy fuels in Northern Nigeria today. A key issue, therefore, is how we get gas up north in the most efficient way,” Gbite Adeniji, a former adviser to Nigeria’s minister of state for Petroleum Resources said in an exclusive interview with BusinessDay.
Adeniji stressed that what is needed is prosperity for all in a manner that does not stop economic activity elsewhere because that also will be disastrous; development needs to be balanced. If more gas is found up north “I’m all for it you see some power plants and industries come up quick and you see more people getting into the job market.”
