Jakarta –
Nigeria is a giant country in terms of population and economic strength. About 220 million people live in the West African country. In fact, by 2050 it is estimated that the number will reach 375 million people.
The state of Lagos alone has a bigger economic output than Kenya. In addition, Nigeria produces a larger Gross Domestic Product (GDP) than all the other West African countries combined.
Producer of crude oil, but importer of refined oil
Nigeria’s economic engine is driven by crude oil, which is found in large quantities in the Niger Delta. However, despite its natural wealth, the country’s economic growth has struggled.
The main problem is that Nigeria is almost completely dependent on expensive imports to meet its gasoline needs, even though it is Africa’s largest oil and gas producer.
Nigeria has four state-owned oil refineries, but these have become dilapidated and idle due to mismanagement. The Nigerian government spends billions of dollars in fuel subsidies each year.
An expert on oil resources in Lagos, Muazu Magaji, said that the strategy of politicians is still lacking in dealing with the economic crisis in his country. “It is a fact that the government itself has not developed a vision for energy security,” Magaji told the DW team.
Increased fuel subsidies
A few days ago, the chief executive of the state oil company Nigerian National Petroleum Company (NNPC), Mele Kyari, said that Nigeria would need around $9.1 billion (about Rp138 trillion) to meet its fuel subsidy needs this year.
Skyrocketing costs of those fuel subsidies, coupled with the economic loss from falling global oil prices, meant that Nigeria funded its budget solely with an emergency loan from the International Monetary Fund (IMF).
With an injection of funds from the World Bank, $5 billion has flowed into Nigeria since the start of the COVID-19 pandemic to keep Africa’s largest economy from collapsing.
Hope for a new giant oil refinery
Just outside Lagos, the giant Dangote oil refinery is under construction. Once operational, the refinery will be able to supply Nigeria with petrol and diesel. The owner of this factory is billionaire Aliko Dangote, the richest man in Africa. However, its completion has been delayed for years.
The combined capacity of the four refineries owned by the Nigerian government, produces approximately 450,000 barrels per day. Meanwhile, the giant Dangote refinery is capable of producing 650,000 barrels per day.
Experts have long called for Nigeria to move away from its dependence on oil. “The diversification policy has unfortunately been going on for four or five decades,” said Magaji. “We have talked about a great revolution, wanting to promote the mining sector and develop agriculture into an important branch, but we have not been successful.”
According to Magaji, President Muhammadu Buhari is indeed more focused on agricultural development. “We have gone from being a rice importer, one of the biggest in the world, to being self-sufficient,” said Magaji. “But still not enough to export,” he added. (kp/yf)
(haf/haf)