CBN’s N250bn Intervention Can Create 12m Jobs – Experts

By: Tobi
Published: August 31, 2021

The N250 billion gas intervention fund set up by the Central Bank of Nigeria (CBN) would help Nigeria to unlock its 206 trillion standard cubic feet of gas reserves and create over 12 million direct and indirect jobs across the country’s gas value chain.

Stakeholders who spoke on the matter have identified lack of adequate investments as one of the major challenges of the sector, hence the use of this fund would be a big boost as it is meant to domesticate the development of gas and to assist indigenous players in further developing the sector.

The CBN in partnership with the Ministry of Petroleum Resources, government move to drive the National Gas Expansion Programme (NGEP) with N250 billion.

There are indications that the country may create about 12, 000 jobs by harnessing existing gas resources to spur other critical sectors of the economy, especially industrial activities.

Insisting that a gas-based industries, most especially the petrochemical (fertilizer, methanol, etc) must be enabled to support large industries, such as agriculture, industrial applications, textile and so on, CBN had noted “as part of efforts at stimulating finance to critical sectors of the economy, CBN introduces the N250 billion intervention facility to help stimulate investment in the gas value chain.

The objectives of the scheme according to the bank include improved access to finance for private sector investments in the domestic gas value chain and stimulate investments in the development of infrastructure to optimize the domestic gas resources for economic development.

Indeed, with over 50 per cent of the resources being imported into the country despite a huge gas reserves hovering above 206 trillion standard cubic feet, stakeholders believe that domestication could reduce the price, spur investment opportunities, reduce burden on foreign exchange, provide unemployment and strengthen the development of the downstream sector.

The minister of State for Petroleum Resources, Timipre Sylvia had said that funding  initiative would push job creation from NGEP to the NGEP will create over 12 million direct and indirect jobs with approximately  two million jobs annually and human capacity development nationwide.

Executive director, International Support Network for African Development (ISNAD-Africa), Adedoyin Adeleke stated that if Nigeria continue to import over 70 per cent of gas product, especially LPG without domestication, boosting local utilisation at an affordable rate could be a mirage.

“The importation of LPG inflates the cost of gas in the country making it unaffordable for most Nigerians. Coupled with the increasing cost of living in the country, increasing unemployment, unabated increase poverty rate;  the vast majority of Nigerians will be pushed to resort to fuelwood for cooking hence increasing deforestation in the country,” Adeleke said.

According to him, there is need for the government to attract, induce and support the private sector for massive investment in gas production in Nigeria.

Adeleke noted that the consequent exclusion of importation associated cost, economies of scale and participation of multiple players would catalyse competition which would crash the price of LPG in the country.

“Local production for local consumption is the way.

would be good to export, local consumption should be the priority.  Farmers do not sell their seeds, Nigeria must not continue to sell out the seeds that could catalyse her much needed development, yet without undermining the sustainability of our environment, conversation of nature, and loss of biodiversity,” he stated.

An energy expert, Charles Majomi noted that unless domesticated, gas prices would continue to increase, saying:  “the market is likely to tighten further as uncertainty, around finance and investments in fossil fuels projects, brought about by the advance of renewables, is likely to cause a pull back in upstream production.

According to him, the development will lead to firewood being the cheapest alternative, high female mortality and increased deforestation, which will have negative environmental impact in the rural zones and lead to more economic hardship for the Nigerian masses.

Ghana National Petroleum Corporation, Petroleum Commerce Research Chair, University of Cape Coast Oil & Gas Studies, Prof Wunmi Iledare, lauding intervention fund in the value chain said: “Significant amount of investment is required to translate the reserves to usable form.

“Petroleum production is good for nothing, if its development does not improve the quality of life of the people, not just the elite,  if sustainable development is to be optimised.”

Special Advisers to the Minister of State for Petroleum Resources on Gas Business Development, Branda Ataga equally expressed the need to domesticate gas development in the country.

Until that happens, Ataga noted that commodity may remain on the high side providing less benefits to the nation’s economy.

Stakeholders had expressed concerns that the number of women, who die in the country yearly from biomass may double. Recall that the African Refiners and Distribution Association (ARDA) and other experts had warned of imminent danger if Africa fails to quickly adopt modern clean cooking energy as over 600,000 Africans, especially Nigerians may die yearly due to household air pollution like firewood and charcoal.

Faced with energy poverty, carbon intensive energy usage is damaging the environment and potentially changing the climate in Nigeria while cities are becoming unbearable due to outdoor pollution. Although the NGEP offers a unique opportunity in unlocking gas molecules as a favourable combination of solution to a mirage of issues in the country, deforestation persist as people turn to biomass (firewood) in search of  cheaper energy option.

Similarly, over  14 per cent of primary forest has already been lost between 2002 and 2020 due to collection of wood for fuel.

The high demand for fuelwood for cooking and income increased the rate of deforestation as the development pushes Nigeria to the verge of environmental disaster, especially desertification, loss of ecosystem, loss of biodiversity, land degradation, soil erosion, as well as economic risk.

Currently, a kilogram of cooking gas, which traded for about N300 earlier this year now sells for over N500 across the country on the backdrop of vulnerable economic indexes, especially the continuous weakness of the naira and the increasing price of natural and refined gas at the international market.

In May, the naira was devalued from N379/$1 to N410.25/$1. As of yesterday, the naira was exchanging at N510/$1 on the parallel market, where most Nigerians purchase their foreign exchange. The global price of natural gas has also witnessed over 60 percent increase, trading close to $4 per million British Thermal Unit (MMBtu) yesterday.

The Petroleum Products Pricing Regulatory Agency (PPPRA) had earlier disclosed that the current consumption of gas stands at about one million metric tonnes, indicating that a five million consumption target set for this year may wobble.



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