Nigeria spends $11bn yearly on importation of petrochemicals despite local opportunities

Nigeria reportedly spends $11billion yearly on the importation of petroleum related products better known as petrochemicals used for pharmaceuticals, transportation and personal care products, without properly exploring local avenues of production.

Analysts have raised concerns over this level of spending and underutilization of Nigeria’s resources, despite being an oil rich country.

Emmanuel Anyaeto, Managing Director, Integrated Gas and Energy Services, USA, while speaking at the 2018 Ghana Gas Forum, emphasized on the importance of petrochemicals, stressing that the increase in demand for crude oil is driven by an increased demand for petrochemical products.

“Petrochemicals are important because we use products made from them daily, including pharmaceuticals, drugs, medical consumables, personal care products (lotions, perfumes, cosmetics), agricultural products (fertilizers, herbicides, preservatives), transportation (vehicles and aircraft parts), home appliances, housing materials (adhesives, paints, coatings), industrial chemicals, manufacturing feedstock, etc.”

Speaking on the viability of the petrochemical market, Anyaeto stated that the market is projected to reach $825billion by the end of 2018, and is still expected to grow at an average comparative annual growth rate of 6.7 percent.

He also further explained that as Africa’s demand sits at 7.1 percent, global consumption grows at an annual rate of 5.4 percent, likely to reach 627.5 million metric tonnes in 2018 with the largest market for demand located in Asia.

Looking at these figures and the benefits of the industry, he went on to say; “You can understand why Dangote Industries is building one of the largest petrochemical complexes in world in Nigeria”.

Addressing some of the challenges the country faces in matching the production level of the United States, Middle East and Asia, Anyaeto brought the issue of lack of diversified feedstock needed for petrochemical production as the major hindrance.

He also touched on the critical issue of lack of manpower required to man and operate modern mega petrochemical plants with about 1,500 to 1,800 engineers required of which such qualified manpower are not readily available in Nigeria.

On the way forward, he called for partnerships between Nigeria and investors looking to back exploration of the industry through funding, market, technology etc. He also asked for the government to push for the enablement of a conducive business environment for such investors.

Citing the petrochemical hub in Africa being constructed by Indorama Petrochemicals in Eleme, which was one of the three defunct petrochemical plants built by the federal government in Kaduna and Warri. Anyaeto once again explained that private sector investment and partnership, is necessary for growth in the petrochemical industry.

HARRISON EDEH, ABUJA