Nigeria’s Economy No Longer Dependent On Oil – NNPC GMD

The Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, on Monday said the Nigerian economy had weaned itself off total dependence on oil revenues, unlike what was obtained in the past.

Speaking on Day 1 of the Atlantic Council Global Energy Forum in Abu Dhabi, Kyari, stated that presently, the contribution of the sector to the country’s Gross Domestic Product (GDP) was just nine per cent.

Kyari who elucidated on the need to give Africa special consideration in the movement away from fossil fuels, maintained that Nigeria was not ready for Electronic Vehicles (EVs) as it is currently dealing with basic issues of power supply.

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The NNPC GMD argued that while Nigeria believes in the net zero drive and has already committed to it, it would continue to build on its gas infrastructure as a buffer before the achievement of the net zero target in 2060.

“First of all, let me put it in a general context, our country’s GDP contribution from the oil and gas is just nine per cent. So, we are not really an oil-dependent economy. Secondly, the US Bureau of Statistics has estimated that by year 2047, Nigeria’s population will be around 379 million people and will be the third most populous country in the world.

“The combination of this is that you have a very rapidly growing population with a huge gap in terms of energy accessibility and you have a huge economic disparity between the poor and the rich and this is growing.

“There is no way you can take the context of energy transition out of this, but our country is clearly committed to net zero by 2060 to reduce our carbon footprint in a manner that will contribute to net zero by 2060,” he said.

Kyari stressed that while Nigeria was trying to move its dependence on thermal sources of power to other sources of energy, more than 70 per cent of energy need was currently coming from the source.

“And most of them are not even coming from gas, so most of them are coming from fuel oil and other dirtier fuels,” he said.

He added: “What we are going to do is some kind of replacement so that we will move from the dirtier fuels to cleaner fuels which is gas, and therefore our focus is to see gas as a transition fuel.”

According to him, what Nigeria had tried to do in recent years was to build enormous gas infrastructure to ensure it is able to supply gas to the domestic market and export to the international market.

He explained that the energy poverty that Nigeria was confronted with, was also true of other African countries.

“Therefore, we are trying to see how we can build a network of pipelines and infrastructure that will deliver gas throughout the West African region and potentially into Europe through Morocco and Algeria.

“We are a 306tcf gas nation and this is enough to cover a lot of our needs in Africa, but our people still use charcoal as cooking fuel and that’s the lowest fuel that you can put forward,” he stressed.

Lamenting that public transportation was weak in Nigeria, Kyari stated that the only way to reduce the number of internal combustion engines was to increase the gas infrastructure and close the gap.

He noted that differentiation remains very critical as the world moves towards 2060, because different countries have peculiar circumstances.
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Kyari added: “Total lack of investment in this sector will mean some kind of exclusion for a very large population in Africa and very many other nations. Therefore, this bandwagon approach to stop funding for fossil fuels won’t work.

“This is because, today, we have much more basic problems in Sub-Saharan Africa than worrying about EVs. We are not in the EVs age and definitely the electricity supply is still the weakest.

“Less than 30 per cent has access to clean electricity and you need to fill this gap. And there’s no way the scale of investment in renewables will do this. So, the world must sit back and take a second look at this.

“Can we differentiate this? Can the cleaner energy come later for some countries? Can we fund fossil fuels so that resources can be available to some countries to fund the transition journey itself?

“Also, can we segregate and say we want to fund gas in certain countries and certainly locations so they can provide cleaner, quicker and more practical fuels? Clearly, there has to be differentiation.”

In his remarks, the Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Sanusi Barkindo, argued that the role of oil and gas is guaranteed in the foreseeable future.

“The world will continue to acquire all sources of energy. What is required at the moment is to revisit how we explore and consume hydrocarbons and to bring them in line with current realities, especially in terms of sustainability.

“The energy trilemma: energy access, affordability and sustainability should be taken in the holistic manner. Oil and gas, according to our oil outlook, will continue to account for more than 45 per cent to 50 per cent of the global energy mix.

“This number has not changed in the last 30 to 40 years because population has been growing rapidly over 3 per cent. we project that potential to grow till 2045 and the vast majority of that growth will come from developing countries where energy poverty is already epidemic,” he stated.