TINUBU SHOULD TAP UNEXPLORED REVENUES

 Ahmed Ibrahim urges the incoming administration to prioritise gas business in addition to mushroom farming to finance infrastructure

With an ailing economy, dwindling resources, and an overwhelming percentage of revenue committed to debt service, the incoming government led by Asiwaju Bola Ahmed Tinubu must get cracking from day one. While appreciating that the task of the Tinubu administration is daunting, it should explore all previously untapped resources including striking a firmer deal with the private sector on project funding, in order to generate enough revenues to meet the country’s infrastructural challenges and other pressing social welfare demands. Experts say Nigeria needs a whopping $800 billion cumulatively in 10 years to fix its infrastructural challenges. They maintain that the country needs an estimated $80 billion in financial commitment annually over 10 years to fix its infrastructure deficit.

Speaking at the national workshop of the Association of Business Editors in Nigeria (ABEN), with the theme: “Infrastructure Financing as Pathway to Sustainable Economic Development,” former acting Managing Director/CEO of Bank of Industry (BoI), Waheed Olagunju, stated that there cannot be meaningful development without investment in infrastructure, which catalyses development in all sectors of the economy. According to him, “Nigeria needs $80 billion every year over the next 10 years to finance its infrastructure gap. And to address this, the government must partner with the private sector to provide funding for key infrastructure projects.”

Olagunju, who was also the chairman of the occasion, said, realising how critical infrastructure like road and rail transportation as well as maritime and aviation sectors are, the federal government through the National Development Plan (2021-2025) expected the transportation industry to generate 15 per cent of such funding amounting to N52trillion of the over N300 trillion revenue target, into the economy, even as it expects 85 per cent of resources to come from the private sector through a Public-Private Partnership (PPP).

As a deft financial manager, Tinubu will be expected to rekindle the magic wand that transformed the economy of Lagos State which he laid as governor between 1999 and 2007. He surely needs to convert even stones to gold in different areas. The administration must not be close to several options. One area that the new government must focus on is upping the gas business. Nigeria has 180.490 million cubic feet putting her in the ninth position in the global ranking of gas reserves. But current production is just a little over three million cubic feet while local consumption is 664,628 cubic feet. However, what’s cheering is its bigger prospects for crude oil sales.

According to a Businessday report, Nigeria’s gas revenue outpaced its earnings from crude oil, the lifeblood of Africa’s biggest economy, in the first quarter of 2022, in keeping up with a trend that first emerged in December 2020. Data obtained from the Nigerian National Petroleum Company Limited (NNPC) showed that while crude oil exports fetched the nation $177.86 million over the three-month period, revenue from gas feedstock to Nigeria LNG Limited (NLNG) amounted to $387.72 million.

Oyinkepreye Orodu, head of the Department of Petroleum Engineering at Covenant University, said crude theft is killing Nigeria’s oil business at historic levels, unlike Nigeria’s gas, which is in high demand because buyers are switching more to long-term Liquefied Natural Gas (LNG) contracts. “Thefts combined with export terminal and pipeline shut-downs are limiting Nigeria’s ability to earn petrol dollars,” he said.

A further breakdown of NNPC’s data showed that in January 2022, Nigeria earned $75.88 million from crude oil, compared with the $84.45 million earned from gas feedstock to NLNG; in February, the country earned $13.05 million from crude oil, compared with $159.58 from gas feedstock to NLNG.

In March, Nigeria earned $88.93 million from crude oil while gas feedstock to NLNG fetched the country $143.69 million.

The NNPC data also showed that the trend of Nigeria’s revenue from feedstock gas to NLNG surpassing crude oil earnings has been consistent in the last 16 months. Between December 2021 and December 2020, Nigeria raked in a total of $644.28 million from gas feedstock to NLNG while income from crude oil exports was $368.34 million.

Another area that should elicit Tinubu’s ear interestingly is the cultivation of mushrooms that a Plant Scientist, Prof Sami Ayodele says can earn Nigeria N1trillion annually, positing that it can also generate a whopping 30 million jobs. He urged the federal government to create an opportunity for farmers to embrace mushroom cultivation to serve as alternative means of farming and income generation for the country.

Ayodele made the call in Abuja on Thursday while delivering the National Open University of Nigeria (NOUN) 22nd inaugural lecture with the topic: “Mushrooms: Friends or Foes?”

He said it was imperative for the government to sensitise citizens on the benefits of mushroom cultivation for wealth creation and poverty alleviation.

Ayodele, Professor of Botany, at the Department of Biological Sciences, Faculty of Sciences, NOUN, said the country could earn as much as one trillion naira annually if the sector is properly developed.

He noted that the mushroom sub-sector and its value chain could provide 30 million skilled, semi-skilled, and unskilled jobs for the teaming unemployed graduates, vulnerable youths, and women.

He stated: “Mushroom cultivation could have great economic and social impacts by generating income and employment for both women and youths, particularly in rural areas of developing countries.

“For instance, in China, it was estimated that the export value of mushrooms was about $1.6 billion and the total employment in the mushroom industry was over 30 million people.

“Out of this population, only 10 per cent are actual mushroom farmers, others fall within sectors such as food, beverage manufacturing, trading and management, transport, marketing, retailing, export, and so on.

“The global demand for mushrooms has continued to increase significantly according to the Food and Agricultural Organisation (FAO) report, while the market for mushrooms is huge and growing exponentially.

“The world mushroom market as of the end of 2020 stood at about $45.3 billion with China producing the highest.

“In Africa, only South Africa, Madagascar, Tunisia, Zimbabwe, Algeria, and Morocco grow mushrooms on a large scale, while Nigeria, the giant of Africa, does not feature in African mushroom production scale, not to talk about world production scale.”

With global revenue in the Cannabis market projected to reach US$51.28bn in 2023, it’s important the Tinubu government listens to people like the Ondo State Governor, Rotimi Akeredolu who has called for legalizing not only its sale but massively promoting it so that the country can earn a fraction of the huge earnings from the trade. This is certainly not a time to stick to dogma but one for realism. 

Despite being an illegal commodity in Nigeria, an estimated 20.8 million people consume cannabis every year, in a market estimated at $15.3 billion in two new reports, by New Frontier Data, an organization that says it is providing transparency into the cannabis industry via unbiased vetted data and analytics reporting.

According to the Global Cannabis Report and the Africa Hemp and Cannabis Report, both giving 2019 Industry Outlooks, exclusively made available to BusinessDay, Nigeria has the highest rate of cannabis use in the world. The reports indicate 19.4 per cent of Nigeria’s population over the age of 15 consumed cannabis in the past year, and at least 12 per cent consume it monthly. This is significant, given the illegal status of the plant across most of Africa, and the fact that higher reported rates of use are typically associated with progressive cannabis laws.

Ibrahim is a development expert based in Abuja