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Why CNG Vehicles Can Work In Nigeria – A rejoinder to Babachir Lawal by D. Agboola

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In a commencement speech on the 26th of May 2011, at Harvard University, the former president of Liberia – Ellen Johnson Sirleaf admonished the Harvard Graduating class of 2011 with the following: “I urge you to be fearless about the future. Just because something has not been done yet, doesn’t mean it can’t be…….The size of your dreams must always exceed your current capacity to achieve them. If your dreams do not scare you, they are not big enough.”

It is from the lens of being fearless about our collective future that Mr. President on May 29, 2023 at the Eagle square announced the end of fuel subsidy which subsequently ushered in the initiative and drive for the adoption of CNG as an alternative fuel.

It is pertinent to examine critical concerns raised by well meaning patriotic former government officials such as those raised in the article published in the Daily Trust newspaper of May 18th 2024.

Babachir Lawal’s argument against the feasibility of Compressed Natural Gas (CNG) vehicles in Nigeria is premised on the lack of infrastructure and perceived government inefficiency. While his concerns are valid, they reflect a short-term perspective rather than considering the long-term benefits and potential solutions.

Lawal argues that CNG vehicles cannot work without widespread refueling infrastructure. This is true; however, infrastructural development is a gradual process. The government’s directive to convert vehicles to CNG is a step towards reducing dependency on imported fuel and utilizing Nigeria’s abundant natural gas reserves. By prioritizing infrastructure development, the government can create a sustainable CNG network. The success of such projects in other countries demonstrates that Nigeria can achieve this with proper planning and investment.

To further counter this argument of infrastructure, using the example of Adamawa, according to the Adamawa office of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in 2022, it renewed the operation licenses of about 85 percent of the existing 530 petroleum stations in the state. Meaning there were 425 petrol stations serving an equivalent 2022 population of 4.9 million people. Would you argue that is the appropriate infrastructure? Lack of infrastructure represents an investment opportunity for the private sector, and with the influx of investments into CNG since last year when the President blew the whistle and the package of incentives the sector have received including duty and tax waiver, concessionary pricing and mandate of Purchase by the FEC, there is no better time to invest in Compressed Natural Gas (CNG).

The economic benefits of CNG for transportation are significant. CNG is cheaper than petrol and diesel, reducing operational costs for vehicles. For a country grappling with high fuel costs, this transition could alleviate financial pressure on both the government and consumers. Additionally, CNG is cleaner than other fossil fuels, contributing to a reduction in greenhouse gas emissions. This aligns with global environmental goals and can help Nigeria meet its climate commitments. Natural gas supply especially non-associated is reliable and can be harnessed from the billions of cubic feet of gas flared annually, if we plan and put our mind and heart to it. Gas vehicles are also more reliable, they require less maintenance and overall benefit the user economically.

Former SGF Lawal mentions the need for a comprehensive implementation strategy, which is essential. The government has outlined a phased and systematic approach, starting with major urban centers and gradually expanding to rural areas as indicated in its roadmap. The professionalism of the Presidential CNG Initiative’s team must be noted; the energy the Dr Zacch Adedeji team has brought to the task has been astounding propelled by a young and savvy management team.

Countries like India and Pakistan have successfully integrated CNG into their transportation systems. These countries did not have a built out infrastructure when the drive and push for adoption of CNG began. Yet we can review the numbers of ‘having dreams that exceed our current capacity to achieve them’

India: India has one of the largest CNG vehicle markets globally. The government has implemented policies promoting CNG use, resulting in over 3 million CNG vehicles. Major cities like Delhi and Mumbai have extensive CNG refueling infrastructure. The success in India is driven by the need to reduce pollution and lower fuel costs. And the infrastructure followed the policies.

Pakistan: Pakistan has also embraced CNG, with over 3.5 million CNG vehicles and around 3,000 refueling stations. The shift to CNG was motivated by the need to cut fuel import bills and reduce environmental impact. The government provided subsidies and incentives to encourage the transition which is what the Nigerian government is doing.

Iran: Iran has the world’s largest fleet of CNG vehicles, with more than 4 million vehicles. The country leveraged its vast natural gas reserves to reduce gasoline consumption. Government initiatives, including subsidies for CNG conversions have been crucial to this success. The case of utilizing Nigeria’s gas similarly is crucial.

Brazil: Brazil has a substantial number of CNG vehicles, particularly in major cities like Rio de Janeiro and São Paulo. The adoption of CNG is part of Brazil’s broader strategy to diversify its energy sources and reduce dependency on oil. I personally witnessed this as far back as 2014 in Rio de Janeiro.

Thailand: Thailand has embraced CNG as part of its alternative energy strategy. The government supports the development of CNG infrastructure and offers incentives for vehicle conversions. This has led to a growing number of CNG vehicles and refueling stations across the country. The key here is support which the Nigerian government is providing.

The successful adoption of CNG vehicles in these countries highlights several critical factors: We cannot be fearful of a future of CNG that other nations have demonstrated capacity and capabilities. Nigeria is developing a comprehensive strategy to successfully integrate CNG vehicles into its transportation system and its in its early days. Our dreams of CNG must exceed our current capacity to achieve, for this is the only way to move our Nation forward.

CNG of course won’t stand alone. There is limited CNG infrastructure to the North, but that is already being solved by the incredible investment by NNPCL in Ajaokuta-Kaduna-Kano Gas Pipeline that will move pipe gas up North, and several planned Mini-LNG and C-LNG projects that form part of a planned virtual pipeline network by the Presidential CNG Initiative with Kwara, Nasarawa, FCT, Lokoja and Kaduna already planned for activation in few weeks. The PCNGI also engaged stakeholders and disclosed that it will extend EV Buses and Infra to far out locations through captive locations like university campuses. This is good for Nigeria.

While Babachir Lawal raises important points, dismissing the potential of CNG vehicles without considering long-term strategies and benefits is shortsighted. With careful planning, infrastructure development, and public-private collaboration, CNG can significantly benefit Nigeria’s economy and environment. The government must commit to this transition, ensuring sustainable and inclusive growth for the nation.

Dami Agboola writes from Austin, Texas

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Opinion

OPINION: The Legacy Man And His Baby Steps, By Bayo Onanuga

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One year after being in the saddle, President Bola Ahmed Tinubu will be first person to admit that the ride has been bumpy. He is also the first to say he is unfazed by the turbulence as he remains focused on the marathon of the next three years. The past year has been months of baby steps, months of laying the foundations for the next three years of canter.

As Nigeria’s 16th President, Tinubu during his campaign for the office said he would make difficult decisions and that running the country would not be business as usual.

From day one, he sought to fulfil his promise, beginning from his earthshaking ‘subsidy is gone’ announcement at the Eagle Square, on the day he was sworn in. The announcement reverberated round the country and beyond. He was not just actualising a promise he made, he was also effecting the consensus of all the major candidates in the 2023 election that the several decades old, wasteful subsidy must end.

His administration followed this up with the decision to harmonise the foreign exchange rates. The multiple exchange rates executed under his predecessor had given room to various abuses, among which was arbitrage, where people close to the power loop made humongous money, getting forex at the official rate and offloading it at the so-called parallel market for almost 100 percent profit. Both the IMF and the World Bank advised the Nigerian government to end the policy, to no avail, as forex obligations piled up, FDI’s dried up and investors shunned Nigeria. Tinubu knew that to reset the economy and build renewed confidence locally and internationally, there must be a policy somersault. He took the measure, just as he promised during the campaign, with the government announcing that it wanted to harmonise the rates in ‘weeks’. The financial world took notice that Nigeria is at the cusp of great change.

Although it has taken months to achieve the harmony, with the Naira in the interregnum, taking a a massive bashing from the dollar. The heavily hurt currency at a stage fell to about N1,900 to the dollar, with the naysayers and the opposition predicting a total destruction of the currency. Their wish did not come to pass, as the currency rebounded to earn global acclaim as the world’s best performing currency. After weeks of amassing muscle against the US dollar, the Nigerian currency weakened again. Now the monetary authorities are working hard to ensure the currency did not fall into the abyss like it did in February, before the rebound.

Together with the abrogation of the subsidy regime, the forex harmonisation policy triggered an inflationary rage, with food inflation, hitting unprecedented levels. Cost of living rose countrywide. Some analysts, however, blamed the inflation on other factors such as insecurity that prevented farmers from going to farm and the poor state of roads, that escalated transportation costs, pushing up the costs of virtually everything.

The administration responded on many fronts with a raft of ameliorative policies, called palliatives. Last December, it offered subsidised bus transport and free train service to Nigerians going home for Christmas and New Year. The subsidy was also offered for the return journeys. Over 200,000 Nigerians benefited from the bus service.

In agriculture, government declared a food emergency, launched a massive dry season farming in important crops such as wheat and maize, along with assisting farmers with N100 billion worth of fertilisers. Government released 43,000 metric tonnes of grains in the reserves and bought another 60,000 metric tonnes of rice from local millers for distribution to the people. States, rich individuals, National Assembly members joined in distributing food and cash to the vulnerable millions in the country. For months, food inflation resisted all the measures, hitting 33 percent in April. Government also rejected the panicky measure of importing food, reposing confidence in the Nigerian farmers, that from their yields, Nigeria will overcome its food crisis. In recent weeks, the news from the markets has been that some food prices are going down.

As part of the ameliorative measures, the Tinubu administration announced wage awards of N35,000 to Federal workers to enable them cope with food inflation and transport costs, as it works out a new minimum wage, that it calls living wage. It announced in July last year the Presidential CNG Initiative. Under the programme, that will herald a new industry and new jobs, hundreds of buses and tricycles, which will be powered by Compressed Natural Gas(CNG) will be locally assembled for countrywide rollout. Some of the vehicles will be electric, for use in some Nigerian states, where CNG is not readily available. A panel to drive the vision was inaugurated in October 2023. However, bureaucratic delays slowed its procurement work. A large number of the buses and tricycles will be available as part of the ceremonies to mark the first anniversary of the Tinubu administration.

Businesses were not left out of government’s mitigation measures. The Bank of Industry, in conjunction with Federal Ministry of Industry,Trade and Investment, is implementing Presidential Conditional Grant Programme for nano businesses. Disbursement of N50,000 each to the applicants that registered began in April. Beneficiaries included retail marketers, corner shop owners, petty traders, market men and women, food and vegetable vendors, vulcanisers, shoemakers. Over 1,000,000 nano businesses are targeted. To help big businesses, Government announced an aid package of N1billion each to 75 of them.

The Tinubu government also released $617 million for up-skilling Nigerian youths, providing startup funding, catalytic infrastructure, and policy advocacy. Youths with digital skills are now registering to benefit from the fund, being administered by the Bank of Industry.

In a country with 200 million people and tax to GDP ratio less than 10 percent, President Tinubu knew from day one, that it will be difficult to make any great, historic impact, if he fails to tinker with the tax structure and bring more money into the national purse. He announced his plan by setting up the Oyedele Committee on Tax, which is winding up its work and has recommended far reaching reforms in the tax regime. President Tinubu also changed the leadership of the Federal Inland Revenue Service(FIRS) to plug revenue holes and introduce creative ways to increase revenue without necessarily overburdening the people. The result has been astonishing. Government now takes 50 percent of the revenue of the MDAs, with record N840 billion recorded in the first quarter. The NNPC was ordered to remit its dollar earnings into CBN. Revenue inflow generally is increasing. And FIRS is working towards increasing the percentage of tax to GDP to about 20 percent.

The inflow of money is making the Tinubu administration dream big and plan big. With Renewed Hope Infrastructure Fund due for launch, the government is already embarking on legacy projects, such as the 700 kilometre Lagos-Calabar Coastal Superhighway, which began in March. Government also plans to reactivate the Sokoto Illela-Badagry Superhighway, which was abandoned in 1976. Many roads and bridges in state of disrepair are to be refurbished. There are plans for rail. Funding for the Ibadan-Abuja-Kaduna rail is being arranged. Port Harcourt-Maiduguri rail will be resuscitated while the Kano-Maradi rail line, started by the Buhari administration will be completed with $2billion dollar loan already secured.

Government has not been short about rolling out several policy initiatives, from the issuance of travelling passports, which has been made quicker, to the planned implementation of some aspects of the Oronsaye report, to cut the costs of governance. Notably, President Tinubu issued an executive order to enhance investment in the oil and gas sector. The quick fruits of the policy was the opening of three big gas plants in the Niger Delta by the President in recent weeks. Mega investments running into over $15 billion are expected in weeks.

The Tinubu administration has also fulfilled some of the campaign promises with the Students Loans and Credit Corp ready for take off. To President Tinubu, no Nigerian child should be denied education because the parents could not afford it. He also hopes that the Credit Corp will enhance the purchasing power of workers and boost national commerce.

President Tinubu at various occasions has acknowledged the pains that some of his reforms are causing the generality of our people. But he says they are pains we must bear to make progress as a nation. An ever caring leader, he is always evolving measures to help reduce the pains. Best of all, he listens to the voice of the people and make necessary adjustments.

In one of the most profound analysis of our situation and an endorsement of the reforms being executed by the Tinubu administration, Planning and Budget Minister, Atiku Bagudu said in a recent interview: “We want to be like Asian countries, we want to grow like Brazil but Brazil and those Asian countries that we want, (that) we are competing with, have taken measures that we needed to have taken decades ago.

“The president is even bold to acknowledge that. Let’s do it now. Some of these measures have consequences which we acknowledge. And that’s why again, a number of measures are introduced in order to ameliorate the situation.

“These measures are helpful to Nigeria, irrespective of North or South because they are to restore macroeconomic stability, to restore security in the country and make it better so that investors will feel confident”.

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Business

Revisiting Ajaokuta: Unveiling the Complexities Behind Nigeria’s Steel Industry

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Standing amidst the vast expanse of the Ajaokuta Steel Company (ASC), one cannot help but feel a sense of despair. Over $8 billion worth of investments lies dormant under the scorching African sun, a painful reminder of unrealized potential and systemic failures. As I traversed the grounds of ASC, witnessing its grandeur reduced to ruins, I couldn’t hold back my tears. What went wrong? In this comprehensive post, I delve into the intricacies of Ajaokuta’s plight, shedding light on the multifaceted challenges plaguing Nigeria’s steel industry.

Ajaokuta Steel Company is no ordinary venture; it boasts a sprawling infrastructure, including a 68km road network, 24 housing estates, a seaport, and a 110mw power generation plant. With 43 separate plants within its confines, Ajaokuta holds the promise of generating over 500,000 jobs once operational.

At the heart of the issue lies the fundamental importance of steel in industrial development. Every industrialized nation relies on a robust steel sector, and Nigeria is no exception. Currently, Nigeria imports approximately 25 metric tonnes of steel and aluminium products annually, amounting to $4.5 billion. Ajaokuta, envisioned as an integrated steel company, was designed to harness Nigeria’s abundant resources and become self-sufficient in steel production. However, its strength lies in its Achilles’ heel – Ajaokuta can only thrive with access to all necessary inputs.

To comprehend the intricacies of steel production, one must understand its elemental components. Steel, an alloy of iron and carbon, requires iron ore, coke from coal, and limestone as its primary ingredients. These components are fused in a blast furnace to yield liquid steel, which serves as the raw material for various steel products.

Nigeria boasts ample reservoirs of iron ore, coal, and limestone, yet translating these resources into viable steel production poses formidable challenges. The iron ore extracted from Nigeria’s Itakpe region, while abundant, suffers from low iron concentration, necessitating beneficiation to meet steel production standards. Similarly, Nigeria’s coal deposits, predominantly non-coking, are ill-suited for steel production, further complicating the equation.

Policy failures have compounded Ajaokuta’s woes, with the project plagued by mismanagement and neglect. The contractual arrangement between the Nigerian government and the Soviet state-owned company, Tiajpromexport (TPE), epitomizes the project’s flawed trajectory. Ajaokuta’s rolling mills were inexplicably constructed before the completion of the steel plant, rendering them operational but devoid of raw materials.

The National Iron Ore Mining Company (NIOMCO) in Itakpe, designated to supply Ajaokuta with iron ore, remains defunct, undermining the project’s viability. Additionally, the Itakpe to Ajaokuta railway line, essential for transporting raw materials, languishes in a state of disrepair, further exacerbating Ajaokuta’s operational challenges.

The blast furnace, Ajaokuta’s beating heart, lies dormant, symbolizing the project’s unrealized potential. Without the requisite infrastructure and policy reforms, Ajaokuta remains a monument to inefficiency and bureaucratic inertia.

Amidst the gloom, glimmers of hope emerge. Recent efforts to revitalize Ajaokuta, spearheaded by former Minister Kayode Fayemi, offer a ray of optimism. However, piecemeal interventions cannot salvage a project mired in systemic dysfunction.

In conclusion, Ajaokuta’s saga epitomizes Nigeria’s struggle to harness its vast potential. Rather than persist in futile endeavors, the government must relinquish control and entrust Ajaokuta’s fate to private sector expertise. The sale of Ajaokuta presents an opportunity to channel resources towards more viable ventures, paving the way for a renaissance in Nigeria’s steel industry.

As a patriot, I refuse to remain silent amidst the squandering of scarce resources. It is time to confront the harsh realities and embrace pragmatic solutions. Ajaokuta’s legacy may be one of failure, but its lessons must guide Nigeria towards a brighter, more prosperous future.

Source: Kalu Aja

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News

Shehu Sani urges FG to pull down Chinese Supermarket denying Nigerians entrance

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A former federal lawmaker, Shehu Sani has called for the demolition of a Chinese supermarket located in the Federal Capital Territory, FCT, for allegedly barring Nigerians from shopping in the facility.

Reports had earlier emerged alleging that the management of the supermarket situated at the China General Chamber of Commerce, along Umaru Musa Yar’Adua Road in Abuja, directed security officers in the facility not to allow Nigerians in.

The development has triggered reactions from concerned Nigerians who demanded that the Nigerian government should force the supermarket to admit citizens

In a post on his official X handle on Monday, Shehu Sani wondered why a supermarket in Nigeria would not be accessible to the citizens, urging the federal government to pulled down the facility in accordance with the laws of the Country.

In a swift reaction to the ugly development, Sani said, “Any Supermarket in our Country that is not accessible to the Citizens of Our Country but to foreigners, should be forcibly opened or be pulled down in accordance with the laws of our Country”.

 

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