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Clean Energy Transition In Africa:Five Takeaways From The SPE Lagos Technical Symposium

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Haruna Muhammad

 

The clean energy transition has been a trendy topic from Lagos to Los Angeles, Davos to Darussalam, and Abu-Dhabi down to Aukland. Industry captains and leading state actors champion campaigns and roll out strategic plans to accelerate the clean energy transition. Today, this is not breaking news: leading multinational oil and gas companies have expanded their portfolios to accommodate non-fossil fuels and enable the clean energy transition. For instance, in Paris, on May 28, 2021, Total switched to TotalEnergies. While giving out why Total changed its name to TotalEnergies, the Chairman and CEO of TotalEnergies, Patrick Pouyanne, said, our ambition is to be a world-class player in the energy transition [1].

In Nigeria, in line with the Federal Government’s ‘decade of gas’ initiative, a global leading energy company, Shell, in November 2021, unveiled Shell Energy Nigeria with the sole aim to increase natural gas marketing and sales to meet up with ever-growing energy demands and, of course, accelerate the energy transition in the country and world at large [2]. An article by McKinsey, “The big choices for oil and gas in navigating the energy transition,” provided an insight into how companies are responding to the low-carbon emission transition [3].

Without much rhetoric, one can deduce how the big players in the energy industry are committed to reducing carbon emissions and accelerating the energy transition. This is in line with the UN Paris Agreement 2016, which aims to limit global warming to 1.5 to 2.0 degrees Celsius above pre-industrial levels. To fulfill this, all global economy functions must be committed and will be required to reduce emissions in the next ten years (10) years coming.

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While the rest of the world’s continents are rolling out plans to meet up the UN Paris Agreement, the story of energy transition in Africa wears a different systemic symbol. This is because of the continent’s long-term quest to address energy poverty. Stakeholders and business heads are caught between the devil and the deep blue sea. It is a confusing story for Africa because people don’t know where they are transiting to, all courtesy of ravaging poverty, insecurity, and energy crisis. For Africa, energy transition is a story on papers, while the reality of the situation is near unattainable.

The SPE Lagos Technical Symposium, on the other hand, provided an intellectual discourse to bring together energy professionals and stakeholders to discuss energy transition. In Africa, Nigeria is known for notorious gas flaring. Nigeria joins nine other countries that account for 75% of the global gas flaring, as stated by the World Bank during the Global Gas Flaring Tracker Report 2022 published on the bank’s website [4]. Thankfully, the stakeholders are taking impressive actions to address that to save the planet from the dangers of climate injustice.

The symposium, graced by seasoned oil and gas professionals, was held on the 18th and 19th May 2022 in hybrid formation. Based on over two (2) hours long panel discussions of Africa’s energy transition, here are the five takeaways from the panelists:

1. Hon. N.J. Ayuk, Executive Chairman, African Energy Chamber
Mr. Ayuk, a strong advocate for African entrepreneurship and the indigenous energy sector, spoke passionately about Africa’s possible ways to the energy transition. From the way he started the conversation, you would be amazed by his depth of knowledge and experience. He said: You cannot decarbonize something that is not even carbonized. Mr. Ayuk centered his argument on the need for strong financial institutions and funding within to drive changes in the African energy sector. In his closing remarks, he added that stakeholders should look inwards and invest in gas because it is the future. He also called for a change of policies and more gas to power projects that will create jobs and address climate injustice in the African region. Africa should be on the supply side of the global economy not otherwise, he noted.

2. Victor Bandele, Deputy Manager, Deep Water Assets, TotalEnergies, Nigeria
Mr. Victor, an industry leader, intelligently talked about challenges in the policy framework in Nigeria and how oil and gas wells are being mismanaged. Riding on that point, he added that, in the early days of oil and gas exploration, most gas wells were left untapped by only focusing on oil-major wells. This act of mismanagement is hunting the energy sector in some countries in Africa. He said we need to deliberate on what we want to do. Africa should champion big projects that will attract investors. The seasoned professional further highlighted the need to expand energy access in Africa via exploring gas wells and solidifying transformational agendas by the stakeholders in what he termed a balanced approach. To achieve this, gas infrastructure will network across the African region, which will be utilized for domestic purposes. He also noted that you could not build on the future energy unless you’ve initial energy. The only way to reduce carbon footprint in Africa is by significantly drilling more gas wells over oil wells. This way, he exclaimed that Africa’s quest for ending energy poverty is attainable.

3. Mr. Kamel Ben – Naceur, the President, Society of Petroleum Engineers International
Mr. Kamel, as an international authority, spoke about SPE’s goals to complement the sustainable development goals of the UN by pointing out that energy transition policies vary from developed economies to developing economies. Moreover, Kamel talked about the SPEi’s plan to collaborate with sister organizations to create a CO2 Assessment tool for CO2 storage. Despite experiencing low investment in six years due to sensitivity of the global market concerning the political events, he said, the oil and gas industry has now witnessed a significant increment in investment by 20%. Finally, Mr. Kamel admitted that Africa has a vital role to play when it comes to the energy transition.

4. Proscovia NABBANJA, Chief Executive Office, Ugandan National Oil Company
The CEO shared her country’s mission to explore opportunities and investments in the Ugandan energy sector. Through strategic project planning, the government has attracted suitable investments. Mrs. Proscovia further discussed the country’s goals in exploring opportunities in non-fossil fuels.

5. Cany Jobe, Director of Exploration, Gambia National Oil Company
Cany Jobe, who carries over 14 years of work in energy projects in West Africa, shared her views on balancing the energy mix. She spoke passionately about Africa should drive her energy transition framework. She rhetorically asked, what we are transitioning from (?). The discussion should be around solving energy poverty in Africa rather than energy transition. In her final remarks, she said that Africa’s energy sector faces financial constraints, and it is not feasible to achieve energy transition without optimizing energy production. If you haven’t gone through it (energy poverty), she said you have no right to talk about it.

In Africa, energy poverty reigns. This is the only continent of the world with a massive gap between modern energy access in the rural and urban areas. According to a report [5], “A clean energy revolution in sub-Saharan Africa is urgently needed to win the fight against energy poverty. Clean energy provides a golden thread to deliver on the promise of Agenda 2030 Sustainable Development Goals (SDGs) and the Paris Agreement”.

While the Sub-Saharan African region becomes a hub of energy poverty, efforts are underway by both states and federal governments at different levels to address the problem. In all, relevant stakeholders must work extra-hard towards addressing the energy crisis because there is ample opportunity in solar and power, which are cheaper than coal in some countries. This will generate more job opportunities and accelerate the energy transition.

Written by Haruna Inuwa, Energy Professional from Lagos state, Nigeria.

Reference
[1] https://www.vanguardngr.com/2021/09/total-nigeria-plc-changes-name-to-totalenergies-marketing-nigeria-plc-official/#:~:text=Energy%20transition%3A%20Total%20changes%20name,five%20in%20renewables%20by%202030.

[2] https://www.shell.com.ng/media/2021-media-releases/shell-unveils-shell-energy-business-in-nigeria.html

[3] https://www.mckinsey.com/industries/oil-and-gas/our-insights/the-big-choices-for-oil-and-gas-in-navigating-the-energy-transition#:~:text=The%20primary%20technologies%E2%80%94renewable%20power,all%20represent%20potential%20growth%20markets.

[4] https://punchng.com/nigeria-nine-others-account-for-75-global-gas-flaring-world-bank/

[5] https://www.oecd.org/environment/cc/climate-futures/Achieving-clean-energy-access-Sub-Saharan-Africa.pdf

Opinion

The Falling State Of Businesses In Nigeria-Umar Ismaila Isa

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Umar Ismaila Isa

 

By Umar Ismaila Isa

Its saddening, psychologically and traumatically worrying that in our today’s Nigeria, the major employers of labour are not just falling, but also wobbling, humbling, crumbling and collapsing like packs of cards much to the chagrin of other African countries that have long been venerating and reverencing and referencing Nigeria’s economy as the giant of the continent. How are the mighty falling.

Some of the factors responsible for these colossal falls are partisan political influence, interest as well as corruption which had brought businesses in Nigeria to their humble knees, specifically the micro, small and medium enterprises, while also not staking claims for even common macroeconomic factors like recessions, insecurity, government debt, exchange rate and high-interest rates.

As we speak, there were over 41million MSMEs in Nigeria in 2017. which have as at 2022 dropped to about 35 million.

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No doubt, failure to provide value money can make customers disgruntled and avoid patronage, so also poor inventory management, failure to differentiate product and services in a highly competitive environment, and strong bargaining power of buyers which can as well cause business failure, not mentioning weak economy, tax burden, high exchange rate, lower purchasing power, high inflation, money running out being in the wrong market, lack of research, bad partnerships and wrong allocation. All these undoubtedly in no small measure can cause business failure.

Also, Challenges like rising cost and reduced revenue, poor power supply, restrictive economic policies, foreign exchange hike, high cost of production, insecurity, high inflation rate have drastically reduced the number of MSMEs which were over 41million in 2017 and now ar about 35million in the just last year 2022.

The data from the bureau of labor statistics isn’t encouraging at all, as it shows that approximately 20percent of new businesses faile during the first two years of operation, 45percent during the first five years and 65percent during the first ten years, while only 25percent makes it to 15 years or more.

In Nigeria, MSMEs account for 48percent of the Gross Domestic Product, (GDP), 96percent of businesses, 84percent of employment in the the country, according to a pricewaterhousecoopers report, and also the three CCCs which are concept, capability and capital. So it’s worthwhile to make sure that before engaging in any business that you make sure you have the basic concept, capability before investing your capital.

As a matter of fact and emergency, beyond the rhetorics, there are practical ways government can create the right environment for businesses to thrive increase, the ease of doing business, eliminate multiple taxations of MSMEs, encourage public-private partnerships, improve power supply, tackle the issue of foreign exchange hike, because with the rate of inflation in the country many businesses can’t survive.

The government and other necessary authority have to take measures to save the country before it’s too late, and the time is now especially as we prepare to elect another president in less than 40 days from now that will take the baton of leadership from President Buhari.

Umar Isa is a business writer and analyst. He writes from Kano and can be reached via issihbaba@gmail.com

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Opinion

What Axe Does Governor Yahaya Bello Has To Grind With The Ohinoyi?

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By Ozumi Abdul

I read in bathed breath the query letter issued by the Kogi state government to the paramount ruler of Ebira Kingdom, The Ohinoyi of Ebiraland, Dr Ibrahim Ado dated 5th January 2023, wherein the revered and venerated traditional ruler was indicted and inculpated for his failure to come out of his Azad Palace to welcome President Muhammadu Buhari during his last year December’s visit to Okene to commission the legacy projects of Governor Yahaya Bello’s led administration in the place, particularly the newly built Okene Reference Hospital and the refurbished official Ohinoyi palace.

Therein in the query letter signed by the state’s Director of Chieftaincy Affairs, Enimola Eniola, the Ohinoyi was shotgunned and impelled to reply to it within the 48 hours from the day it was issued, being on the 5th January, 2023.

As a concerned and full fledged son of the soil, I became seriously concerned, perturbed and disturbed, hoping for the very best way these two illustrious sons of Ebiraland can diplomatically meander through the egoistic duels that has subtly been marring their relationship since the coming on board of this Kogi state’s government.

I fervently prayed for the abatement of the seeming gloom of doom that is looming large, if the relationship between the Ohinoyi and the governor gets deteriorated, and breaks down beyond repairs.

God forbid, I dreaded, and still dreading the unfortunate Kogi version of Ganduje versus Sanusi debacles and faceoffs in Kano state, the one that led to Sanusi Lamido Sanusi || being deposed as the 14th Emir of the ancient city of Kano, by the Abdullahi Ganduje led Kano state government.

I dread the fact that the relative peace Ebiraland has been enjoying since the coming on board of the Yahaya Bello’s led administration might soon be stymied and once again shrouded in the tumultuous state of yester years, when in Ebiraland life was “Nasty, Brutish, and Short”: Yes, that you can’t take that away from this Yahaya Bello’s administration in Kogi state, because his administration stemmed the tides everything insecurity in not just the Kogi Central alone, but the entirety of the state; he came and restore parity and sanity in the state that was hitherto ravaged by the activities of different cells of gun-trotting and gun-fighting non state actors.

Worryingly though, one thing that is, and will surely be of great concern to every Ebira son and daughter, is the umpteenth running subtle battles between the Ohinoyi and the governor; the battles rumours have it in some quarters that are more of “patriarchally historical” than egoistical; because one will surely be mystified to know that the Ohinoyi can be served a query letter for his failure to come out of his palace to welcome President Buhari during his visit to Okene, without a prior official letter noticing him of the president’s purported visit to his domain from the state government, coupled with the fact that bomb went off right in front of his palace on the scheduled day of the President’s visit, where about four people lost their lives, as well as the destruction of the barricading fence of his Azad palace.

In other northern states for instance, particularly the core northern states like Kano and Zaria Emirates, where reverence and veneration for their paramount rulers (Emirs) are given unequal premium, whenever a president goes visiting to their (the Emirs) domains, he is usually led by the governors of the states to their palaces, where he (president)pays homages to them; then proceed together to the venue(s) of the event(s) in which purpose(s) the president goes to the state. Then, why is ours different and have become embarrassing subject of discourses in both conventional and social media?

Why is Governor Yahaya Bello exuberantly dancing to the sound of the destructive drums of sycophantic naysayers who don’t mean well for him and his government? Why is he being lulled by the metaphoric lullaby and mendacity of power, power that is only transiently tenure-bound; believing he has an axe or axes to grind with the Ohinoyi, a nonagenarian at that who is old enough to be his grandfather?

Governor Yahaya needs to halt these dances that may hurt and haunt him even after the expiration of his tenure as a governor. He needs to thread with caution so that he won’t walk the tight rope of life after the conclusion of his tenure as a governor.

The fact that the Ohinoyi responded to the query, though days after the 48 hours the Kogi government impelled him to answer the query, with sheer wisdom, maturity and equanimity does not necessarily mean that the nonagenarian is overtly contended with being maligned and contemned by the state government in such a ridiculous and ludicrous manner.

A proverb in my native Ebira parlance has it that when a dog is on the cusp of public-glare disgrace, he will be all of sudden be inflicted with sores right at the back of its head, and out of the reach of the leaking of its tongue, because leaking the sore will endear the sores’ quick healing. May Governor Yahaya Bello never be such proverbial dog.

Ozumi Abdul is a staff Columnist in Arewa Trust.

He can be reached via Abdulozumi83@gmail.com

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Opinion

Nigeria Inflation And Its Effects-Usman Isah

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Usman Isah

 

By Usman Isnaila Isah

In 2021, the country’s inflation rate stands at 17 %, even though it fluctuated substantially in recent years. It tended to increase through 2002 – 2021 period ending at 17 % in 2021.

The only question begging for billions of answers is why inflation in Nigeria skyrocketed so high. According to the national bureau of statistics (NBS), the rise to a sharp increase in demand ahead of the Christmas season, import cost hikes due to the depreciation of the naira currency and a rise in production cost.

the NBS explains that the rising inflation rate was caused by soaring food prices disruption in food supply chain, rise in import cost due to the currency depreciation and increase in the cost of production.

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Inflation is a a serious problem for a country like Nigeria grappling with sundry issues like insecurity and poverty.

For instance, unlike in advance nations such as the US and Japan where some levels of inflation is tolerable to stimulate economic activities, Nigeria inflationary trend is detrimental to its growth due to its structural deficiency, logistics problem and insecurity among others.

High inflation tends to worsen inequality and poverty; because it hits income and savings harder for poorer or middle income households than wealthy households that have recently escaped poverty could be pushed back into it by rising inflation.

Problems Of Inflation In Nigeria

Inflation is a major drive of poverty in Nigeria, and other several macroeconomic problem such as insecurity, inadequate infrastructure, exchange rate hike, poor economic policies and debt upsurge. In an inflationary environment unevenly rising prices inevitably reduce the purchasing power of most consumers and this erosion of real income is the single biggest cost of inflation.

It also hurts the economy and consumers in 3 major ways, such as less purchasing power, less savings, loss of goods and services.

Basically, there are two main types of inflation, which are, Demand pull inflation and Cost push inflation. These two types of inflation usually cause an increase in the overall price level within an economy. Inflation high rates can be curbed via effective monetary and fiscal policies, and this implies that the government must manage the exchange rate via an effective monetary policy, encourage exportation, encourage and improve made in Nigeria if possible subsidized the dollar, and encourage the marketers.

Government must as a matter of fact show sincerity of purpose and real political will if it desires the country to pull out of the current inflation rate that the country currently finds itself.

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