from OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – AMID the global shift from fossil energy sources, it is imperative that Africa’s biggest producer of crude oil, Nigeria, accelerates the diversification of its economy from the commodity.
Oil production contributes around two-thirds of Nigeria’s state revenues, although it contributes 9 percent to the gross domestic product (GDP).
Average daily oil production in the West African country was 1,57 million barrels during the third quarter of 2021.
The economy has not been spared by the upheavals in the sector globally in recent years.
However, this year, crude oil prices rebounded strongly from 2020’s decline as efforts by Organisation of the Petroleum Exporting Countries (OPEC+) to restore the supply-demand balance succeeded.
Nonetheless, output challenges affected Nigeria’s ability to benefit from improved prices.
According to FBN Quest, the financial think tank, it is crucial for Nigeria to expand its revenue base as efforts intensify globally to dump fossil fuels in order to fight climate change.
“As the world shifts its attention to non-fossil energy sources, it is important that Nigeria gets its non-oil economic strategy right,” FBN stated.
The Nigerian Export Promotion Council (NEPC) in its recent Opportunities in the Export Market, highlighted over 20 products, divided into two categories, with a potential to assist the country meet non-oil ambitions.
The first category includes, petrochemicals and methanol, gold, nitrogenous fertilisers and ammonia, hides, leather and cash crops such as soybeans, cotton, palm oil, rubber and cocoa.
The second category comprises of cement and clinker, fresh and processed tomato, banana, plantains, cashew, sesame seeds, cassava, oranges, spices, ginger, shea butter and cow pea.
FBN noted the non-oil export targets are ambitious with a goal of US$30 billion in value and 20 percent of GDP by 2025, as well as 500 000 additional jobs created annually.
Currently, non-oil exports average around $5 billion yearly and accounted for 8 percent of national GDP in 2020.
NEPC has devised a number of measures to promote the so-called zero-oil plan.
It is providing shared processing facilities for businesses exporting agricultural produce, decongesting some ports, cold room facilities to export perishable items and developing field-to-export transport corridors to match infrastructural investments.
“Ultimately, a lot depends on the country’s ability to achieve these targets and successfully diversify its revenue streams from oil,” FBN stated.
– CAJ News