Is Nigeria Sleepwalking?

In 2022, Nigeria held up its role as an influential player on the world stage—for better or worse. Through various metrics, Nigeria is consistently referenced as a prime economic player in Africa, and with this, effective governance and leadership should steer the country towards prominence regionally and globally.

The past year was filled with pivotal global events and Nigeria was not left out. From resolutions at the 77th United Nations General Assembly; to global conflict and the challenges on the African continent that Nigeria had to respond to. For one, Nigeria’s role in the decision by ECOWAS to sanction Mali, Guinea, and Burkina Faso in response to coups and government upheavals in those countries, but the missing nuance is why said coups took place.

In Burkina Faso and Mali, the removals were triggered by growing discontent among security forces, mostly around governance and ineffective counterinsurgency strategies. Nigeria seeks to play active roles outside internal governance, but insecurity is a pressing problem within its borders. This has hindered the success of the development plans Nigeria attempts to adopt. Security analysts have suggested that armed extremists across the Sahel and Sahara are likely to ramp up their activities because the Lake Chad region is still vulnerable and the Benin-Niger-Nigeria borderland remains porous.

Outside insecurity, Nigeria drew attention to its own priorities at the 27th United Nations Conference of Parties (COP) summit that took place in November 2022 in Egypt. The call to move away from fossil fuels met much resistance, especially from the global South, whose countries remain heavily dependent on the energy generated from fossil fuels and are seeking to industrialize. Nigeria and other African countries put forth demands to allow for the continued exploitation of their hydrocarbon resources for development purposes, this stands in contrast to the call for decarbonization.

China Dialogue suggests that as of 2019, Africa needed about $2 trillion in investments targeted towards affordable power generation and reliable infrastructure. While China has been the largest source of energy infrastructure investments, developed countries have also shown the willingness to re-engage with assisting in the development of energy infrastructure. Interestingly, prominent policy analysts argue that African governments must partner effectively to broaden the base of economic development if only to avoid the extractive relations that plagued the African energy sector through the 20th century.

For Nigeria, Minister of State Petroleum Resources, Timipre Sylva said the country’s intention to continue with a multipronged energy transition strategy was aimed at attracting investments for Africa.

According to Sylva:

Nigeria will continue to advocate for gas as a transition fuel for Africa. We have said that we cannot move at the same pace as the rest of the world because we contribute less than two per cent of the global greenhouse gas emission. We are not the problem and we cannot be made to pay for the sins we did not commit.

Relatively, Nigeria’s per capita emission of C02 is approximately 0.6 tonnes/person as compared to the global average of 4.5 tonnes/person and the US value of 14.4 tonnes/person, according to reporting by OurWorldinData.

The African Development Bank reports that $130billion-$170billion in funding is needed until 2025 to close the infrastructure gap across the continent, and such a target is improbable unless natural resources are explored. It is a skewed suggestion that African countries abandon the same natural resources that funded and powered economic development everywhere else. Certainly, environmental sustainability and impact assessment must continue to inform energy policy, but the misguided calls from the West to switch energy sources must not influence the African condition, according to Gwede Mantashe, the South African Energy Minister:

Energy is the catalyst for growth…They even want to tell us to switch off all the coal-generated power stations…until you tell them, ‘You know we can do that, but you’ll breathe fresh air in the darkness’.

On the economic front, Nigerians not only dealt with fluctuating fuel prices and rising inflation rates, but higher and more varied tax levies put more pressure on the already dismal purchasing power of Nigerians. The Nigerian government moved to introduce new naira banknotes; a process that has not been executed efficiently. From a hard deadline to return old notes to banks lacking supply of the new notes, the average Nigerian has faced another dimension of economic uncertainty.

Above all, the general elections grabbed national and international attention; in Nigeria, especially among the youth. While parties sought to mobilize voting blocs and alliances, the socioeconomic issues glaring at Nigerians made them more worried about high inflation rates, insecurity across the country, and poor prospects for economic development.

ENERGY, PRODUCTION AND THE NEED FOR SUSTAINED DEVELOPMENT

Coined by World Economic Forum founder, Klaus Schwab, the fourth industrial revolution is disruptive as digital technologies are at the forefront of social development. It is also disruptive in terms of the raw materials required for the production of said technologies. Cobalt, lithium, coltan, and other such metals are needed for battery, and semiconductor chip manufacturing. These are minerals African countries have significant deposits of, begging the question of who has access to these resources and who will reap the benefits. The so-called fourth industrial revolution is rife with opportunities for African governments to take advantage of, in sectors like agriculture, mining, manufacturing and information, and communication technologies.

Nigeria, like many other countries of the global South, was unable to gain much during the first (steam power, mechanization), second (mass production), and third industrial (automation, electronics) revolutions because of the colonial legacies that kept many countries as sources of resource extraction. However, several African countries are taking steps to reverse such trends. Zimbabwe, in 2021, announced that China’s Tsingshan Holding Group would commence the development of an iron ore mine and a carbon steel plant, the announcement comes three years after the investment deal was first entered into.

In 2018, the Democratic Republic of Congo (DRC) passed a mining code identifying cobalt, coltan, germanium, and lithium as ‘strategic minerals’ of which it has increased royalties from 2 per cent to 10 per cent. With proven lithium reserves of about 44.6 million tonnes, the DRC sets itself to become a leading supplier of lithium, a metal classed as ‘strategic’.

In 2022, Nigeria’s Minister of Mines and Steel Development, Olamilekan Adegbite, turned down an offer by Tesla Inc. to obtain high-grade lithium from Nigeria. While the country has not necessarily classified lithium as a strategic mineral, the move is in line with leveraging valuable minerals for sustainable development. According to Adegbite, electric vehicles and battery storage would account for roughly half of the energy minerals demand over the next two decades. He also acknowledged that establishing a battery industry would improve the value chain of mineral exploration in Nigeria. Nigeria is positioned to reap great benefits from available resources in terms of sustained development and economic standing, with the developing trend of African countries trying to move up the production value chain. The question still lies in whether Nigerian leadership will seize such opportunities that may be fleeting.

Nigeria entered an agreement with Morocco for the Nigeria-Morocco Gas Pipeline project (NMGP), a 6,000km pipeline crossing 13 African countries that will bring over 5,000 billion cubic meters of natural gas to Morocco. The project is intended to supply gas directly to the Maghreb Europe Gas Pipeline and by extension, the European Gas Network. Nigeria and Morocco also agreed to develop industrial clusters in the sub-region with a focus on sectors like agriculture, and manufacturing, as a way to attract investment and improve export competitiveness.

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Is Nigeria Sleepwalking?

ENERGY, PRODUCTION AND THE NEED FOR SUSTAINED DEVELOPMENT

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