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Oil Price Fall And Nigeria’s Economy

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At the 7th All Nigeria
Guild of Editors conference held in Benin, the Edo State capital on Thursday, September 22, 2011, the former minister of the Federal Capital Territory, Mallam Nasir el-Rufai, raised alarm that should oil  price drop below $80 per barrel in the international market, some state governments in Nigeria would not be able to pay salaries to their workers.
El-Rufai, who was speaking on the topic, “Perspectives on the Cost of Governance in Nigeria”, had strongly noted that pegging of oil price as high as $75 then in the national budget was unrealistic and not good for Nigeria’s economy.
The minister was being as prophetic as many individuals and organizations who believed that the nation’s economy which is oil dominated would be in a quagmire, should any unforeseen surprises affect the oil price in the global market.
Various experts had also, for too long been consistent in expressing strong need for drastic reduction in the high cost of Nigerian governance which gulps as high as 25% of the annual budget and one of the highest in the world.
They had equally suggested diversification of the economy from oil to other sectors particularly agriculture which hold high promises for food on the table of the average Nigerian, mass employment, raw material for industrialization and foreign exchange earning.
While most nations of the world had strategized to contain such possible economic fears, most African governments also took bold steps in preparations for the economic uncertainties, but some deaf-and-dumb governments had preferred what goes directly into the individual pockets of the leaders than the general good of the citizens. Billions of Dollars meant for constituency funds, furniture extravagant travelling allowances, amongst others find their ways to the law makers and their crowd of primal aides.
Today, the reality is not only knocking at our doors but is quite here with us. The present systematic drop in the oil price which experts predict could slide far below $50 per barrel benchmark before the end of 2015 has become Nigeria’s undoing.
Many state governments in Nigeria today are owing months of salaries arrears to their workers while contractors have abandoned projects execution because the oil price then predicted had fallen below budgetary calculations and states lack the funds to pay.
Some private schools in Port Harcourt have already given notice of increase in school fees, landlords are also threatening to raise rent, labour unions are ironically agitating for pay rise in view of recent devaluation of Naira occasioned by dramatic drop of oil price in global market even as state governments insist they would not review the $65 per barrel benchmark on which they proposed their 2015 budgets. Where would these excoriations take the nation to in the present economic situation determined by global economic reality?
An economist, George Clement, is of the view that time has come for Nigeria to elect leaders who have the capacity to proffer solutions to the socio-economic challenges confronting the nation as against empty promises for which most Nigerian political leaders are known.
“The era of touts aspiring for public offices should be over. It is time to look beyond sweet talks and empty promises now that campaign period in Nigeria is around the corner”, said Clement.
He said, “our leaders had since the oil boom of the 70s refused to do the right thing. Billions of Naira had consistently been swallowed up by the pockets of fraudulent leaders”, he remarked noting that the future generations may have nothing to be proud of about their nation if the real change is not effected.
Another respondent, Mrs Mary Jonathan, in her own reaction is challenging the Economic and Financial Crimes Commission (EFCC) to trace the loots of the nation wherever they might have been hidden.
“Yes, it  appears late but not too late. We cannot continue to wallow in poverty in a rich country while few persons in the name of politics continue to cart away our resources”, she stressed.
Jonathan appealed to the Federal Government to review the pump price downward to reflect the price of oil in the global market. “We cannot afford to pay more when actually the price has fallen. The N97 per litre of fuel is no longer realistic”, she maintained.
A civil servant, Makel Ndah, in his own reaction called for upward review of workers salary. “Since the Naira has been devalued, its exchange power has become weak, it is important that the government reviews workers salary upward to meet with the current market reality”.
A landlord in Port Harcourt Chief Clifford Nweke, said,” it is obvious that house rent would be reviewed since government has started to have a second look at the Naira.”
We are all Nigeirans, operating in the same market, so what affects one should equally affect the other. Yes some people will say landlords are wicked shylocks, but that is mere sentiment”, he maintained.
A private school proprietor who pleaded anonymity said, “we had our first Parent Teachers Meeting last week and the issue of increase of salaries was raised by the teachers and I told the parents to pray and watch because for me to pay higher workers salary means that the fees charged students would also be reviewed upward.
“Please don’t get me wrong, we have not increased school fees yet. What I am saying is that we in my school are studying the socio-economic variables. If workers salary goes up and other schools readjust to meet with the reality, we here would also adjust because we are part of the society”, he explained.
A Port Harcourt- based public analyst, Christian Nnamdi, said the issue calls for caution. “There is no need to panic yet. It is not a Nigerian thing but a global phenomenon. It does not affect only Nigeria but other nations of the world. Nigeria has many antidotes to the problem. So all we need to do is study the situation to know the dynamic nature of the change.
According to Nnamdi, the nation should not leave everything in the hands of politicians. “We need to protect the economy from the excesses of selfish Nigerian politicians and one way of doing that is to gather together some technocrats and experts in various fields especially economists. Let the think- tank develop an economic plan that should guide the policies and programmes.
Call it 25 years economic development plan. So that whichever political group that takes the mantle of leadership, will have to build whatever programme from the economic blue print.
Nnamdi blamed the woe of the nation on inconsistency of leadership, stressing that government should be seen as a continuation from where the former ends. “But you see, in Nigeria, any new administration is in the habit of abandoning the programmes of the previous administration at the detriment of so much fund sunk into such projects because they want to take credit.
“But with a long term economic development plan, new government can no longer abandon projects started by the former government. It has to inherit it and complete it for the people. This idea will make nonsense of the penchant for second term which is common in Nigeria,” he maintained.
It would be recalled that discovery of shale oil which increase supply in American oil market, a major importer of Nigeria’s oil has affected the oil supply in the global market. This high supply has reduced oil price in the global market and Nigeria, whose economy remains oil-driven is directly affected.
Nigeria whose budget depends on oil has been forced to review its oil benchmark resulting in austerity measures to contain the economic downturn.
Medium Term Expenditure framework which the Finance Minister, Dr. Ngozi Okonjo-Iweala, submitted to the National Assembly, scaled down the nation’s budgetary estimate for 2015 to N4.661 trillion as against an initial N4.817 trillion.

 

Chris Oluoh

Some Transformers donated by the lawmaker representing Oyigbo in the RSHA Hon. Okechukwu .A. Nwuogu

Some Transformers donated by the lawmaker representing Oyigbo in the RSHA Hon. Okechukwu .A. Nwuogu

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15-Year Blackout: NDPHC Begins Electricity Project In Kaduna Community 

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The Niger Delta Power Holding Company Limited (NDPHC) has commenced a major electricity project aimed at ending a 15-year blackout in Rigasa community, Igabi Local Government Area of Kaduna State.
The General Manager, Corporate Communication and External Relations, NDPHC, Nazo Agim, made this known in a statement, in Abuja, at the weekend.
Agim said that the project, facilitated by the Bola Ahmed Tinubu Ideological Group (BAT-IG), comprises a two-kilometre 11kV line, a 1.5-kilometre 33kV line and a 7.5MVA, 33/11kV injection substation.Access Services
According to him, the project is designed to strengthen electricity distribution and improve power supply to residents and businesses in the community.
He said that the Rigasa project underscored NDPHC’s commitment to extending critical electricity infrastructure beyond generation to bridge distribution gaps.
He also said that the project would stimulate socioeconomic development and improve the quality of life in underserved communities across Nigeria.
Agim disclosed that a groundbreaking ceremony was performed earlier on Friday, by the Kaduna state Deputy Governor, Dr. Hadiza Balarabe, who represented Governor Uba Sani.
According to him, Balarabe, while speaking during the ceremony commended NDPHC for the intervention, describing it as a life-saving initiative that would address the community’s longstanding electricity challenges.
The NDPHC Managing Director, Jennifer Adighije, reaffirmed the company’s commitment to addressing the community’s electricity challenges.
Represented by the Executive Director, Networks, Babayo Bello, Adighije also reiterated NDPHC’s commitment to supporting President Bola Tinubu’s vision of improving electricity supply across the country.
She said that although NDPHC’s primary mandate was power generation, the company’s interventions also extended to transmission and distribution infrastructure to address critical gaps and expand electricity access.
According to her, the Rigasa project represents a worthwhile investment that will ease residents’ hardship and demonstrate the impact of targeted infrastructure development in underserved communities.Access Services
NDPHC Executive Director, Strategy and Commercial, Patrick Obahiagbon, commended the Kaduna state government and the community for their cooperation and support for the project.
The District Head of Rigasa, Mohammed Idris, also commended NDPHC’s management for its commitment to expanding electricity access in the community.
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FG Commissions 640MW Transmission Capacity To National Grid

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As the federal government intensifies efforts to strengthen Nigeria’s power infrastructure, it has commissioned 640 megawatts (MW) of electricity transmission capacity to the national grid with an additional six transmission substations in Kano and Katsina states, respectively.
The projects comprise four substations at Walalambe, Kumbotso, Dakata and Dan-Agundi in Kano State, which collectively add 544MW of transmission capacity, and two 60 megavolt amperes (MVA) substations in Kankia Local Government Area of Katsina State, contributing another 96MW.
The additional capacity is expected to improve the transmission network’s ability to evacuate and deliver available electricity to distribution companies and consumers in the two states.
The Ministry of Power announced the developments in a statement issued at the weekend.
According to the statement, the additional capacity is expected to improve the transmission network’s ability to evacuate and deliver available electricity to distribution companies and consumers in the two states.
The projects, however, increase transmission capacity rather than electricity generation, implying that their impact on supply would depend partly on the availability of power from generating plants and the capacity of downstream distribution networks.
Speaking at the commissioning of the Kankia substation, the Minister of Power, Joseph Tegbe, said the projects reflected President Bola Tinubu’s commitment to improving the country’s electricity infrastructure.
“Mr. President’s Renewed Hope Agenda recognizes that economic ambition requires dependable infrastructure,” Tegbe said.
He added that investments in electricity infrastructure would strengthen the foundations for business expansion, employment and economic growth.
The Kankia substations comprise two 60 MVA, 132/33 kilovolt (kV) facilities designed to strengthen the transmission network serving Katsina State and neighbouring areas.
Tegbe said the infrastructure would improve the network’s ability to distribute available electricity, supporting commercial activities and household welfare.
He also urged residents to protect the facilities against vandalism and other activities that could disrupt electricity infrastructure, asking them to report suspicious activities to TCN or security agencies.
Katsina State Governor, Dikko Umaru Radda, described the project as a significant investment in the state’s electricity infrastructure.
Radda stated that improved electricity supply could support industrial development, economic growth and public service delivery.
He further commended the President, the Federal Ministry of Power and TCN for completing the project.
It would be noted that the latest projects come amid a broader government’s drive to address bottlenecks in Nigeria’s electricity transmission network, which has constrained the amount of electricity that can be delivered to distribution companies and end users.
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NBTI Unveils $600m Investment Pipeline Innovation

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The National Board for Technology Incubation (NBTI) has unveiled an investment and development-finance pipeline exceeding $600 million, alongside a proposed solar energy programme targeting one million micro and small businesses across Nigeria.
The Director-General, NBTI, Dr Kazeem Raji, disclosed this while presenting the outcomes of the 2026 NextGen Innovation Challenge at a World Press Conference, Abuja.
Raji said the investment pipeline comprised a proposed $500m solar energy programme for universities and polytechnics, which would be developed in partnership with Gigawatt Global, and a $100m financing opportunity linked to the Tinubu Light Initiative under a memorandum of understanding with Financial Innovation for Impact, UK, also known as Cambridge Investors.
He, however, clarified that the funds had not been fully secured or disbursed, stressing that their realisation would depend on due diligence, financing arrangements, contractual commitments, regulatory approvals and implementation requirements.
“These figures represent proposed investment and financing opportunities and should not be interpreted as $600m already received, disbursed or fully deployed in Nigeria,” he said.
According to Raji, the initiative was designed to connect Nigerian innovators with international investors, business leaders and development partners to accelerate the commercialisation of indigenous technologies.
He said the challenge attracted 298 Nigerian innovators from all 36 states and the Federal Capital Territory, up from 105 participants in 2025.
The innovations showcased covered artificial intelligence, robotics, agriculture, healthcare, education, renewable energy, telecommunications, digital technology, enterprise software, 3D printing and advanced manufacturing.
“Our message is straightforward: Nigeria’s innovators deserve visibility, our enterprises deserve opportunities to grow, and our technologies deserve pathways to the marketplace,” Raji said.
He added that NBTI’s priority was to move beyond showcasing ideas to helping innovators develop commercially viable products, establish sustainable businesses and create jobs.
The proposed Tinubu Light Initiative is expected to support one million micro and small businesses through access to solar energy solutions, with a proposed target of training and deploying 10,000 field marketers and creating 50,000 direct youth employment opportunities.
The initiative also targets N30bn in blended financing for its first phase and estimates annual economic benefits of about N12bn, subject to its underlying assumptions and implementation outcomes.
Raji said the programme was conceived to address the energy challenges facing small businesses, including high operating costs associated with unreliable electricity and dependence on petrol and diesel generators.
Tailors, barbers, hairdressers, pharmacies, food vendors, neighbourhood retailers, printing businesses and digital-service providers, he stated, are among the potential beneficiaries.
He said the initiative also envisaged opportunities to promote business formalisation and financial inclusion, particularly among informal enterprises, where appropriate arrangements could be established.
However, the NBTI director-general acknowledged that the programme’s success would depend on sound financing, transparent beneficiary selection, reliable equipment, maintenance arrangements and measurable delivery.
“Our vision is to make clean-energy access an enabler of enterprise development, not merely an infrastructure intervention,” he said.
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