CPEEL Monograph Series - latest Issue
Volume 2, Issue 3, 2015
Author Adeola AdenikinjuSource: CPEEL Monograph Series 2 (2015)More Less
The Nigerian energy sector is crucial to the Nigerian economy. Its importance to the national economy and the lives of ordinary Nigerians has continued to increase steadily since petroleum was discovered in 1956. For a long period, the fortune of Nigeria has correlated quite significantly with the fortune of oil. Until recently, the oil sector accounts for over a quarter of the Gross Domestic Product, 70 per cent of Federal Government revenue and over 95 per cent of the country's export earnings.
Source: CPEEL Monograph Series 2, pp 1 –14 (2015)More Less
In the year 2014, Nigeria became the largest economy in the African continent due to a rebasing of the nation's gross domestic product (GOP). Nigeria rebased its GDP from 1990 to 2010, which resulted in an 89 per cent increase in the valued size of the economy. As a result, the country today prides itself as the largest economy on the continent with a valued nominal GOP of US$ 510 billion, which is 44.8 per cent higher than that of South Africa's US$ 352 billion. Apart from this revelation, the rebasing of the economy's GOP revealed a more diversified economy than was previously acknowledged. The rebasing exercise moved the base year from 1990 to 2010 constant prices, and gave greater weights to sectors that had minute input in the economy 25 years ago, sectors such as ICT, entertainment and services. The agricultural sector share declined to 22 per cent from 33 per cent, the service sector increased to 52 per cent from 26 per cent, while manufacturing increased to 7 per cent from 2 per cent. Nigeria's reassessed GOP for 2013 was US$ 509.9 billion as against US$ 285.5 billion before the rebasing. Nigeria maintained an impressive growth since the beginning of this decade as depicted in Fig. 1.1 with a record high of 8.3 per cent growth of the real GOP in 2012, up from 5.4 percent in 2011.
Source: CPEEL Monograph Series 2, pp 15 –31 (2015)More Less
The Nigerian industrial sector is composed of oil and natural gas, solid minerals and manufacturing subsectors. Although it contributes only 14.4 per cent (Nigeria Bureau of Statistics) to GDP, the oil and gas industry's contribution is a major source of revenue to the government accounting for 80 per cent of its revenue and 96 per cent of its foreign exchange earnings. The Nigerian oil and gas industry began its activities in 1956 when the first oil well was discovered, the pioneering company being the Shell-British Petroleum Group. It boasts in its "light" (relatively high API) and "sweet" (low Sulphur content) crude, Bonny light (37°API), which is used as the benchmark crude oil. The differential geologic formations characterizing Nigerian oil fields produce different types of crude oil which are named after the export terminals. Apart from Bonny light, some of these crudes include Qua Iboe, Escravos blend, Brass river, Forcardos and PeningtonAnfan. The industry makes the country the largest producer of crude oil in Africa and its gas reserves remain the largest in the continent.
Source: CPEEL Monograph Series 2, pp 32 –44 (2015)More Less
Electricity is of strategic importance to the Nigerian economy, being a major driver for growth. It also has a major role to play in reducing poverty, improving productivity and enhancing the general quality of life of the Nigerian people. Since Nigeria's independence in 1960, more than US$60 billion has been invested in the sector, but national electricity generation still falls short of demand leading to load shedding, blackouts, and a heavy dependence on private generators. The financial inability of the government to provide at least US$70 billion needed to resuscitate electricity generating capacity at a barely adequate levelled to the privatization of the sector in 2013 (CSL, 2014).
Source: CPEEL Monograph Series 2, pp 45 –53 (2015)More Less
To properly regulate the nation's cash cow, the oil and gas industry, the stakeholders came up with the decision to draft the Petroleum Industry Bill. Consequently, the Executive Bill of 2008 was drafted followed by the Inter Agency Draft of 2009. Although they were considered good legislation for the industry, they were not passed. Then followed a third draft in 2012. The PIB holds a lot of promise for the oil and gas industry in Nigeria. The third draft of the Bill released by the Ministry of Petroleum in 2012 generated mixed reactions because it significantly altered various provisions on the earlier versions. Besides these alterations, the Bill reposes extreme powers over the industry in the President and Minister of Petroleum.