Nigeria Loses $30billion Annually To Neglect of Petrochemical Industry

The failure of the federal government to utilize its refiner­ies to full capacity has led to the deterioration of the petrochemicals industry, making the country to lose over $29.7 billion annually in revenue.

Petrochemical products, like olefins (ethylene, propylene, bu­tadiene) and aromatics (benzene, toluene, xylene) are used in end-user markets such as paints, plas­tics, explosives and fertilizers sub-sectors.

It was gathered that Nigeria’s failure to develop its petrochemi­cal plants is largely the reason manufacturing companies are depending on imports for over 80 per cent of their raw materi­als worth over $10 billion (about N2 trillion at the rate of N200 to a dollar) yearly.

It is also the reason many manufacturers are going out of business since the Central Bank of Nigeria’s (CBN) forex restriction on 41 firms is hurting efforts to get its raw material.

In Nigeria and across the world, foam, plastic, paint and textile manufacturing companies depend on derivatives of petro­chemicals most of which are im­ported because the local industry has not received due attention.

Commenting on the viability of the petrochemical industry and how it can boost the economy, an expert in the Chemical Engineer­ing Department, University of Lagos (UNILAG), Abiola Kehinde, in a research document entitled, “Strategy for the Devel­opment of the Petrochemicals Industry in Nigeria,” disclosed that the Nigerian petrochemicals markets (excluding export of crude oil) was worth $14.03 bil­lion in 2008 with forecasts pro­jecting it could hit $29.7 billion by the end of 2015.

Abiola maintained that a re­structuring of the operation of Nigerian refineries, with greater private sector participation, was likely to increase the capacity utilisation of the refineries.

‘‘Once this is instituted, the cost structure of the Nigeria’s petrochemicals market would improve as crude oil is the main feedstock for the production of olefins and aromatics in Nige­ria,” he wrote.