In recent weeks, President Bola Tinubu’s federal government has signed a couple of investment deals involving Nigeria’s key resources. These deals were announced with aplomb, optimism, and reassurance that they would herald economic prosperity for the country. Beyond the promise of an imminent era of immense growth and development, there are pertinent questions regarding the circumstances surrounding the nature of these deals and whether they are truly in the interests of Nigeria and its people.
On Friday, reports emerged that the Nigerian Midstream and Downstream Petroleum Regulatory Authority plans to end domestic gas price regulation by September 2028, transitioning to a “willing-buyer, willing-seller” market. The NMDPRA decision followed the French corporation, TotalEnergies, takeover of the largest internal gas project in an $800m Ima Gas Project deal. That deal gives it access to sole control of 1/3 of the entire gas project in Bonny Island, estimated to produce 20-30 million tons annually.
While the government described the Final Investment Decision as another major milestone in its efforts to turn Nigeria’s huge gas resources into productive assets capable of supporting industrialisation, job creation and economic growth, the announcement of the NMDPRA already gives an inkling of what this gas deal means for Nigerians. What the NMDPRA announcement means, in essence, is that whatever fiscal cushion Nigerians enjoy from gas will be removed, and Nigerians will now have to pay more for gas, which, at the current price of 1400/kg, is already quite expensive for the average Nigerian
The imminent deregulation of the gas sector by the government is akin to the removal of subsidy from petrol by the same government in 2023, which created an unprecedented level of inflation and cost of living crisis. So how does handing over key natural resources that are crucial to our existence as a nation and important to our economic growth to a private foreign company that is only interested in profits, margins, and the bottom line serve the national interest if this means we have surrendered our ability to make and dictate policies that are critical to our energy security, which is needed for industrialisation?
The Ima Gas energy deal came after the announcement of the mining investment agreement signed with the United States, which hands over Nigeria’s mineral resources, valued at about $700 billion, to the US. Like the gas deal with TotalEnergies, the government framed the mining deal as an important step in strengthening Nigeria-US cooperation on our mineral resources, which will create quality jobs, stronger skills and greater opportunities for Nigerian businesses.
Coming at a time when there is a reopening of President Tinubu’s inglorious past, particularly his alleged involvement in drug trafficking in the US, events and circumstances surrounding the deal have spurred doubt and misgivings over what the real objectives of the federal government are. Many see the deal as nothing more than part of a compromise reached to stop the USA from releasing the president’s file on his involvement in drug trafficking and to gain support for his second-term bid. It will be remiss not to also mention this deal came at a time Nigerians can get into the US at the moment because of visa ban and also the fact that of the conditions given by the US government to remove Nigeria from the country of particular concern list, to which it was added over claims of Christian genocide, which is for the Nigerian government to grant unrestrained access to the US for the mineral resources on its land, it is hard to argue against the position of those who opine that these deals are not in the national interest of Nigeria and amount to the relinquishing of the nation’s sovereignty.
It is also worth mentioning that these deals alone, on their own, may not have elicited the level of trepidation and suspicion they have engendered if the government of the day did not have a history of implementing excruciating neoliberal policies that are designed to achieve the opposite of what Nigeria needs as a nation: industrialisation and socioeconomic growth. Since coming to power, Tinubu has implemented neoliberal policies of the International Monetary Fund, which include the implementation of economic and fiscal policies like aggressive devaluation of the naira, privatisation of state-owned enterprises and brutal cutting of government subsidies for essential goods and services that Nigerians need for survival. These policies have seen the government halt subsidies for petrol, education, electricity and now gas. This has plunged Nigerians into unprecedented poverty.
In 2016, when former president, late Muhammadu Buhari, during an interview with Al Jazeera was asked why he ignored the IMF recommendation asking Nigeria to devalue the Nigeria, he said he could not do that because Nigeria was and still is not a productive economy, and the country imports virtually everything it needs to survive; hence, it does not have the luxury available to productive countries who have a vibrant and thriving export-driven economy. He had the evenness of mind and good sense to reject the IMF neoliberal policies again in 2016, just as he did in 1985 when he was the head of state, because he knew they were not designed to advance growth and development but to kill any chance of these two happening.
From worryingly one-sided investment deals that technically hand over critical natural and mineral resources that should be nationalised and used for the development of Nigeria to foreign entities to whom the president is beholden, to implementing brutal neoliberal economic policies and devastating latter-day structural adjustment programmes that tank the economy, shrink the purchasing power of the people, decimate their disposable income and erode their savings, immiserating them in the process, it is hard to see how these deals are in the interests of the Nigerian state.
