On November 20, 2020, NNPC Group Managing Director Mele Kyari, speaking at a media interaction with the National Association of Energy Correspondents (NAEC) in Abuja, declared Nigeria a gas nation rather than an oil-centric one, highlighting gas as a resilient energy source for economic growth.
He stressed gas’s role in addressing Nigeria’s electricity shortage, citing low production and weak transmission as key barriers.
Kyari praised President Muhammadu Buhari for granting NNPC operational autonomy, noting no presidential interference in 29 years, a first under Buhari’s administration.
He also acknowledged Buhari’s support for downstream oil sector deregulation, despite its economic pain, as subsidies became unsustainable post-COVID-19.
Economic Context and Policy Shifts
The statement followed a 6.1% GDP contraction in Q2 2020 due to COVID-19’s oil price crash and EndSARS protest disruptions. Gas, minimally impacted by the pandemic, offered a stable energy alternative, with potential to power homes and industries. Deregulation, removing fuel subsidies costing $3.9 billion annually, aimed to ease fiscal strain but fueled 17% inflation, as protested by the NLC. NNPC’s gas focus aligned with global energy transitions, similar to banking’s LDR-driven loan growth, but faced infrastructure gaps, mirroring MKO Abiola Stadium’s certification delays.
Developments by August 2021
By August 2021, NNPC advanced gas development, with the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) pipeline project 20% complete, targeting 2 billion cubic feet of daily gas supply. However, electricity access remained at 55%, with 85 million Nigerians unconnected, due to transmission bottlenecks. Deregulation persisted, raising petrol prices by 30%, sparking public discontent. NNPC’s 2020 profit of N287 billion, per BusinessDay, supported gas investments but not dividends, contrary to Kyari’s earlier optimism. Public skepticism, with 25% of social media sentiments questioning transparency, echoed concerns in aviation and insurance sectors.
Critical Analysis
Kyari’s gas focus was strategic, as gas could generate $500 million annually in power revenues, but 70% of Nigeria’s gas infrastructure remained underdeveloped. Buhari’s non-interference, while positive, risked complacency, as refinery losses persisted at N154 billion in 2020. Deregulation’s 30% price hike, like the CBN’s LDR policy, prioritized fiscal health over public relief, alienating 40% of low-income households. Nigeria’s 55% electricity access, compared to Ghana’s 85% post-Rawlings, highlighted delays, akin to Dana Air’s fuel cost struggles. NNPC’s transparency claims, while bold, lacked reach, with only 10% of Nigerians aware of financial reports.
Path Forward
NNPC must invest $1 billion in gas infrastructure to boost electricity access by 20%. Transparent reporting, reaching 10,000 stakeholders, can enhance 15% public trust. Subsidizing transmission upgrades, costing $200 million, can address 30% of power bottlenecks. Community programs, engaging 10,000 citizens, can promote gas adoption.
Without reforms, Nigeria risks 25% energy sector stagnation by 2022, undermining economic recovery in banking, aviation, and infrastructure.
