The Nigerian economy depends largely on hydrocarbons. Yet, in the wake of the Russian-Ukrainian war and the subsequent energy crisis that gripped European countries due to a reduction in gas supply from Russia, Nigeria found itself ill-prepared to seize the opportunity presented by the surge in demand for natural gas. Despite possessing more than 200 trillion cubic feet of natural gas reserves, Nigeria failed to capitalize on the unprecedented rise in global gas demand. This lack of foresight and inadequate investments have significant implications for the nation’s energy sector and its economic development.
Experts are quick to attribute Nigeria’s failure to capitalize on the surge in gas demand to several factors, including poor investments, lack of foresight, and neglect of the domestic market.
The obvious first point is that inadequate investments in gas infrastructure, exploration, and production left Nigeria unable to meet the increased global demand promptly. The sad truth is that the lack of proper facilities and technologies hindered the country’s capacity to extract and export its abundant gas resources efficiently.
In addition, the country failed to anticipate the potential increase in global gas demand due to geopolitical events like the Russian-Ukraine conflict. As a result, it missed out on the windfall that could have bolstered its economy and energy sector, particularly in these dire times.
Furthermore, while focusing on export potential, Nigeria neglected its domestic gas market. The nation could have benefited from a more extensive network of gas distribution for local consumption, which would have boosted its industries and power generation capacity.
Excuses and reasons for missing out are irrelevant at this stage. There are implications, real life and far-reaching economic implications for missing out.
Number one, the failure to capitalise on the high gas demand windfall has resulted in a significant economic loss for Nigeria. The nation could have earned substantial revenues from gas exports, which would have bolstered its struggling economy in this critical time.
Also, Nigeria’s inability to meet its domestic gas demand contributes to energy insecurity within the country. Inadequate infrastructure, pipeline vandalism, and unfair regulatory practices have hindered the supply of gas for power generation and industrial use.
Moreover, overreliance on oil revenues has long been a concern for Nigeria. The missed opportunity to harness its gas reserves diversifies its income sources and reduces dependence on oil means the concerns persist.
If this episode teaches any lesson at all, it must be this one: promoting domestic use of gas is crucial for national growth and economic development. Promoting the domestic use of gas is a multifaceted strategy that benefits a country’s energy security, economic growth, environmental sustainability, and the well-being of its citizens. It offers a cleaner, more affordable, and versatile energy source that can contribute to a more sustainable and prosperous future.
Now, to effectively address the implications of missing out on the high gas demand windfall, Nigeria must take decisive actions.
Firstly, it must become intentional in investing in gas infrastructure. All hands should be on deck here. The Nigerian government and private sector players should invest significantly in gas infrastructure, including pipelines, processing plants, and export facilities. These investments will improve the nation’s capacity to extract and export gas efficiently.
Secondly, there has to be a conscious effort to promote the domestic use of gas. yes, a laser-like focus on boosting the domestic gas market is crucial. This includes investing in infrastructure to deliver gas for power generation, industries, and households. Regulatory reforms and anti-sabotage measures are essential here to ensure a steady domestic supply.
Then, Nigeria must diversify the energy sector. It is time to say, enough of lip service. Nigeria should diversify its energy sector by giving equal importance to gas alongside oil. This diversification can provide a more stable income source and energy security.
And most importantly, we require enhanced foresight. The Nigerian policymakers must enhance their foresight and geopolitical awareness to seize opportunities when they arise. The ability to adapt to global energy trends is critical for economic growth. Understanding the interconnectedness of the global economy is crucial to thriving today and the future.
This is the conclusion of the matter, Nigeria’s failure to leverage its vast gas reserves during the peak of global demand due to the Russian-Ukraine conflict carries significant implications for the nation’s economy and energy sector. By implementing the recommended remedies and learning from past oversights, Nigeria can position itself to take full advantage of future opportunities in the global energy market. The key lies in proactive investments, regulatory improvements, and a strategic focus on both domestic and international gas markets.
We can and should do better.
Eromosele, a corporate communication professional and public affairs analyst, wrote via: elviseroms@gmail.com
