Nigeria’s oil dependent future faces more uncertainty

Nigeria’s economy though said to be considerably diversified in terms of GDP composition, still has about 80 percent of foreign exchange earnings coming through oil receipts. The future of oil is now increasingly uncertain, not only on account of general growing interests in renewable energy, but as more governments and automobile companies express readiness to put an end to the era of petrol/diesel powered vehicles.

Last week in what appeared to be a game changer, China, the world’s most populous nation expressed readiness to eventually ban the sale of all fossil fuel-powered cars in the country, within a timeline to be determined.

Xin Guobin, the Chinese vice minister of industry and information technology, was quoted expressing the view that the government is working with other regulators on a timetable to end production and sales. The move will have a profound impact on the environment and growth of China’s auto industry.

China’s vehicle sales numbers have led the world recently, and are increasing at an impressive clip annually, and with the recent announcement, it becomes logical for automakers to start reconfiguring their long-term strategy to focus on Electric vehicles; also making it imperative to wonder what happens next with Nigeria’s oil, just like many other countries which seem unprepared for a future beyond oil.

Similarly, India, the largest destination of Nigerian oil, according to the National Bureau of Statistics (NBS), is also planning for a greener and more environmental friendly future with projected bans on the use of petrol cars.  India plans to replace all petrol- and diesel-fuelled cars with EVs by 2030, although getting the supporting infrastructure may prove to be a herculean task.

The United Kingdom has also disclosed plans to impose a ban on petrol and diesel cars by 2040, just as Sweden, France, and Norway have expressed similar intentions.

These plans to phase out petrol and diesel cars are riding on the back of the desire to tackle air pollution problems and limit global warming in the face of climate change.

In order to limit global warming to below 2 degrees Celsius (3.6 degrees Fahrenheit), the target set by the landmark Paris Agreement on climate change, the world will need 600 million electric vehicles by 2040, according to Paris-based International Energy Agency (IEA).

Electric cars are considered a better and greener alternative to fuel-driven cars because, irrespective of the source of their power – solar, hydro, wind, biofuel, or even nuclear – they produce zero carbon in operation.

As more countries seem willing to embrace a future where oil has a lesser role to play, Nigeria’s plans for the future are yet to be known.