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Nigerian economy: Growing non-oil sector non-negotiable for sustainability

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Performances of critical sectors of  Nigeria’s economy reflect much is needed to be done as oil still overshadows accruals as the mainstay of the economy. Overdependence on oil has not been healthy for the economy, a fact that recent realities have come to establish. The shortfalls from the inconsistencies of the oil market and the growing demands of the economy with rising realities of the Nigerian polity have pose constrains on the health of the economy, reflecting supply deficiencies   from one major source.

Oil still remains over 70 per cent, the large sum of  accruals from Nigeria’s export and major source of foreign exchange. Fall in oil prices saw the Country sliding into recession from 2016 when global oil prices crashed as low as $30 per barrel. Recovery from recession has been challenging as the Country is yet to recover from the strains of the shock. Although, recently oil prices surged up to an average of $100 per barrel, the yielding has not in any way enough to balance the deficits of outputs suffered by the economy. The fact that the recent surge in global oil prices above $100 couldn’t make up for inadequacies to refocus the economy from downward slope, is a reflection that oil in itself is insufficient as a base for the economy to solely rest upon and its proceeds apparently becoming inconsequential to the enormous demands of the Nigerian economy.

This fact, speaks to the need for deliberate attention and intervention to vitalise the workings of non-oil sectors of the economy, many of which the Country have potentials for export advantages. The profile of Nigeria’s non-oil sector export value still remain considerably unappealing and irreconcilably low in comparison to the level of output and accruals obtainable if the potentials and opportunities of most of these sectors, say agriculture, mining, manufacturing, steel, Information and Communication Technology, etc, are being fully optimised.

Recent records revealed Nigeria’s foreign trade fell quarter-on-quarter (QoQ) by N200 billion or 1.5 per cent to N12.8 trillion in the second quarter of the year (Q2’22) from N13 trillion in Q1’22. The National Bureau of Statistics (NBS) in it’s recent Foreign Trade in Goods Statistics report for Q2’22, revealed foreign trade in Q2’22 comprised of exports valued at N7.4 trillion and imports worth N5.4 trillion. The bureau stated that the value of crude oil exports, which accounted for 79.7 per cent of total exports in Q22  22, rose by 5.1 per cent to  5.9 trillion from  5.6 trillion in Q1’22.

The report read: “Nigeria’s total merchandise trade stood at  12.8 trillion in Q2’22, indicating a marginal decrease of 1.5 per cent over the value recorded in Q1’22 and 32 per cent higher when compared to the value recorded in Q2’21.The value of total export stood at  7.4 trillion in Q2’22, the value accounted for 57.7 per cent of total trade. The export value rose in Q2’22 by 4.3 per cent against the level recorded in Q1’22 and by 47.5 per cent when compared to Q2’21. Exports by section revealed that Nigeria exported mainly mineral products which amounted to 6.7 trillion, or 91.46 per cent of total export value; followed by ‘Products of the chemical and allied industries’, which were valued at 318.51billion (or 4.3 per cent of the value of total exports) and ‘Vegetable products’ worth  100.12billion (1.35 per cent of the value of total exports). The value of exports trade in Q2’22 was dominated by crude oil exports valued at 5.9 trillion which accounted for 79.7 per cent of total exports while non-crude oil exports value stood at  1.49 trillion or 20.2 per cent of total exports of which non-oil products contributed  675.08 billion representing 9.11 per cent of total exports.”

On imports the report revealed that: “During the second quarter of 2022, total imports were valued at 5.4 trillion accounting for 42.3 per cent of total trade. The import value fell by 7.9 per cent in Q2’22 compared to the value recorded in Q1’22 but increased by 15.8 per cent compared to the imports value in Q2’21.” It is apparent that the fall in foreign trade value, particularly export is non appreciable.

It is apparent that Nigeria’s economy cannot survive mainly on oil. The demands of the economy has inarguably outgrown what only oil can mainly satisfy. Significant contributions from other sectors have become pertinent and non negotiable if the economy will receive the strength of stability for significant growth on sustainable strength for virility.

Looking into the growth of other sectors is pertinent for future purposes as realities of the patterns of global attention is driving towards green economy, where the demands for fuel would become significantly low; thus losing its global value. This value, it is known, would continue to suffer erosion on gradual dimension as new technologies take evolving phases. For instance, the production of electric cars has grown significanlty and is spreading gradually around the world. In no too far distant future, its widespread would bring a paradigm shift in the demands for automobiles, thus reducing significantly the demands for fuel products. Developments of similar kinds are taking place with stronger drive with deep research for a shift towards green economy. The demands for oil in this light have been projected to fall as time goes by.

In this light, it is not negotiable for any proactive, sensitive and rational government where oil forms a significant base of its economic structure to begin developing alternative formations. Nigeria which economy categorically lies with overreliance on oil must take heed.

The government must not only awake to this reality, but must proactively drive machineries to the demands to develop critical sectors which would outlive oil. These sectors, with lasting sustainable strength, must be driven along growth path by deliberate measures to grow them to the height of virility where they can in no too far future distance stand in good stature competitively with oil in their accruals. This is essential not just for prevailing pressing demands of the economy, but also for future sustainability upon which the economy can rest conveniently for forward drive unto virility.

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Editorial

Endless turnaround maintenance of Port Harcourt Refinery

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Since 2021 when the turnaround maintenance of the Port Harcourt Refinery started, there have been heaps of failed promises of the production commencement date.

First, it was former Minister of State for Petroleum, Timipre Sylva promising severally of commencement of productions of Port Harcourt Refinery, but these promises never came to limelight till he resigned for political calling.

Next was the Managing Director of Port Harcourt Refinery, Ahmed Dikko who at a time said the turnaround maintenance was 98 percent completed and would have commenced operations in December 2023. That promise again was unfulfilled.

The Group Managing Director of Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari equally said that Port Harcourt Refinery would start production in two weeks time, that elapsed in April, 2024. April has come and gone.

The Head, Corporate Communications of NNPC Ltd, Olufemi Soneye was also quoted to have said that the reason for non-commencement of operations of the Port Harcourt Refinery was regulatory and compliance tests. As it seems, all efforts to restart the operations of the Port Harcourt Refinery and by extension other refineries, have been futile.

Political watchers have adduced poor management, corruption, sabotage and lack of political will as some of the problems confronting smooth operations of our refineries. They particularly accused those benefitting from importation of petroleum products as being responsible for the non-functionality of the four refineries in Nigeria.

Political will, of course, plays a major role in shaping directions the policies go. Political will in this instance translates to good leadership, and in this case, the buck stops at the table of the Federal Government, particularly the President, who doubles as the Minister of Petroleum.

Petroleum being the mainstay of the country’s economy should be given all the attention it deserves. The reason being that virtually everything in the country is tied to the petroleum products situation.

Since the announcement of the removal of fuel subsidy on May 29th, 2023 by President Tinubu on assumption of office, life has not been the same in Nigeria. Cost of living has  risen astronomically, consequent upon the hike in price of petroleum products.

In the midst of plenty, courtesy of the abundant human and material resources, Nigeria is still often described as the poverty capital of the world. What an irony! Turnaround maintenance of the refineries subsists without end. Every hope is now placed on the Dangote Refinery, a private outfit. While the diesel price slash is commendable, how on earth will a single private entity take the whole country to Eldorado?

We cannot regulate what we do not produce, this is a natural principle that cannot be contravened. We only pray that Port Harcourt Refinery comes on stream someday.

We look forward to that time. Our position is that Government agencies saddled with the responsibility of providing fuel and other petroleum products to Nigeria must do their work and justify their pay.

This onerous task is mandatory and statutory to them and shall amount to disservice if they fail. Our prayer is not for them to fail, but that they fulfil their vows and make the country great for the overall interest of all.

Tecnimont, the Italian company undertaking the $1.5 billion rehabilitation project of the Port Harcourt Refinery has through its Local Managing Director, Gian Fabio Del Cioppo pledged to fulfil the terms of contract, so as far as we are concerned, there is nothing stopping the country from achieving the target of the turnaround maintenance project.

The only clog would of course be lack of political will, which we know could be cultivated. So let all hands be put on deck to achieve results.

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Editorial

Gas explosions: Nigeria and its avoidable tragedies 

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Nigerians die daily for reasons  so avoidable it would make  a 19th century peasant weep.  The deaths are often a product of systemic wickedness, nonchalance, and greed. Too often have gas explosions claimed the lives of Nigerians untimely. Whether it is the leaders refusing to enforce the checks and balances for personal gain, or citizens selling defective gas cylinders, it all balls down to a collective aversion for kindness.

The internet is rife with news of this tragedy occurring in a Sisyphean cycle. Jolted by the cries of the populace, the leaders promise reprieve, release press statements and in the weeks that follow, little to nothing happens. “One must imagine Sisyphus happy,” Camus wrote. Unfortunately, our Nigerian dead imagine nothing.

While people relaxed from their labour, were preparing for the Workers Day celebrations, nine people including a pregnant woman were injured in Tuesday’s gas cylinder explosion at Alaba Lane, Alayabiagba Community of Ajegunle-Apapa, Lagos.

“The fire explosion started around 1:30 pm and immediately, two tricycles were burnt, school children coming back from school were affected. A particular young man was seriously affected as his body was peeling off, but rushed to the Gbagada General Hospital,” according to reports.

The usual suspect is, of course, negligence, as the Director of Lagos State Fire and Rescue Service, Margaret Adeseye, puts it: “preliminary investigation revealed that several various gas cylinders traded within the neighbourhood have one triggered from a susceptible leakage leading to the snapping of a high tension cable and resultant Fire.”

The explosion razed down “four commercial tricycles, six lock-up shops, a bungalow part of properties, while salvaging adjoining structures including a major fuel service station.” Children were hurt, the future of the nation plunged, as usual into avoidable misfortune.

The way out is through. The press releases are wonderful PR statements but they do not bring back the dead, as was the case in Ogun State recently where a truck explosion cost the nation another life. The leaders must enforce the checks and balances put in place. The law is no decoration.

We mustn’t wait until a politician’s family member is involved in a tragic gas accident before “banning” (as is the default response of the Nigerian leadership). The leaders must realise that such misfortunes are contagious, and money is hardly a bulwark against 3rd degree burns in a nation where all its doctors are fleeing.

Renewed Hope requires renewed action. This is all that Nigerians ask of its leaders. All agencies responsible for monitoring trucks, cylinders need to work together to defeat this peculiar evil. Like COVID-19, gas explosions are no respecter of persons.

Of course, citizens too must do their part and resist the allure of profit over the death of others. A society without empathy is headed for a dystopia. It will not matter the price of petrol or electricity tariff, if all that matters is the pursuit of super profit at the expense of one’s neighbour. We owe it to the dead to live fully and graciously. To escape, as we should, avoidable tragedies.

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Editorial

Nigeria must act now to mitigate flood disasters

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As the rainy season looms ahead, a palpable sense of concern grips the nation.The recent cautionary message from the                      Federal Government to 31 state governors  regarding the looming threat of floods from April to November serves as a wake-up call, demanding swift and concerted action from both state and federal authorities.

Presented by Minister of Water Resources and Sanitation Joseph Utsev, the 2024 Annual Flood Outlook paints a bleak picture, underscoring the urgent need for preemptive measures. It is not merely an emphasising advisory; it is a resounding call to arms.

The spectre of past flood calamities in Kano, Taraba, Lagos, and other states still haunts our collective memory.

The haunting images of devastated homes, displaced families, and shattered livelihoods serve as poignant reminders of the human toll exacted by our complacency.

It is imperative that we glean lessons from these tragedies and take proactive steps to forestall the impending catastrophe.

The warning issued by the Federal Government is crystal clear: floods are imminent, and the time to act is now.

The Nigeria Hydrological Services Agency’s classification of 148 local government areas across 29 states, including Lagos, Kano, and Delta, as high flood-risk zones emphasising the gravity of the situation.

Every moment of inaction heightens the risk to countless lives and properties. State governors, local authorities, and relevant agencies must set aside differences and collaborate effectively to implement robust flood preparedness and mitigation measures.

From infrastructure reinforcement to early warning systems and community awareness campaigns, a comprehensive approach is imperative to safeguard vulnerable communities.

As responsible stewards of our nation’s welfare, we cannot afford to be caught off guard. Let us heed the warning, unite in purpose, and proactively address this looming threat.

The cost of inaction is too grave to contemplate, and the time to act decisively is now. This is not a drill.

The minister’s revelation that 31 states face high flood risks, while all 36 states and the Federal Capital Territory will experience moderate flooding, demands immediate attention and collective action.

“The high flood-risk states are Adamawa, Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Nasarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Sokoto, Taraba, Yobe,” the Minister said.

We cannot afford to wait until the waters rise and lives are lost. The time to act is now. It’s imperative that federal and state governments, agencies, and local communities join forces to mitigate the impact of floods.

This requires a coordinated response, including public awareness campaigns, infrastructure upgrades, emergency preparedness plans, and investment in flood mitigation projects.

The future of our nation depends on it. Let us heed the warning and take proactive steps to build a more resilient Nigeria, where lives and properties are protected from the ravages of flooding. The clock is ticking; let us act now to avoid a catastrophe.

While 31 states face high flood risks, the remaining five states must also be proactive in their preparations. It’s not enough to simply warn residents to relocate from flood-prone areas; state governments must provide safe and conducive spaces for relocation, complete with essential services like relief materials, healthcare, and security.

This will help mitigate the trauma faced by displaced families. Citizens, too, have a critical role to play. They must be willing to relocate from their homes and comfort zones to prevent avoidable deaths and losses. The stark reality is that flood disasters are devastating, as seen in 2023 when 45 lives were lost, 171,545 persons displaced, and 22,666 homes partially damaged, with 5,358 others completely destroyed.

The economic toll was equally staggering, with a $4.6 billion bill that significantly dented Nigeria’s GDP. Let us learn from the past and take collective responsibility for flood preparedness. State and federal governments, agencies, and citizens must work together to build a more resilient nation, where lives and properties are protected from the ravages of flooding. The time to act is now.

In 2022, flooding claimed 662 citizens; 2.43 million others were displaced and 3,174 were injured nationwide, per NEMA.

The financial losses were estimated at $9.12 billion by the Federal Government, and by a United Nations agency at $7 billion. A UN report stated that food insecurity was aggravated in the country as 569,000 hectares of farmland were destroyed by the flood.

According to the then Minister of Water Resources, Suleiman Adamu, 178 LGAs in 32 states were declared “highly probable flood risk states.”

Although climate change remains a global concern, leading to flash floods, droughts, forest fires, and cyclones, the government must not make excuses.

They need to take lessons from previous floodings and replace their nonchalance with strategic actions and campaigns. They must do all they can to avoid the repetition of losses of lives and properties.

The citizens must play their part by clearing drainage in their vicinity, cultivating good waste disposal and environmentally friendly culture. To entrench this, the government must place strict surveillance and enforce stiff penalties against erring residents.

State governments should demolish structures erected on flood paths to enable rainwater to drain appropriately.

NGOs in the environmental niche should activate campaigns distilled in local languages through the media to prepare citizens for the flood.

The federal and state governments should be proactive in the deployment of ecological funds to provide guardrails against natural disasters. This must be used for pre-emptive measures like building bridges, desilting rivers, evacuating canals and drainage, and building dams and levees. The dams would help preserve excess rainfall to irrigate farmland during the dry season.

The government must fully embrace its onerous duty to safeguard lives and properties.

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