Analysis of the inherent energy-food dilemma of the Nigerian biofuels policy using partial equilibrium model: The Nigerian Energy-Food Model (NEFM)

Abstract

The Nigerian government plans to produce bioethanol from its staple food crops to increase transport fuel supply, reduce imported motors fuels, create jobs and diversify its oil-dependent economy. However, the conflicts between the benefits of biofuels and the potential impacts on food security requires analysis to quantify fuel, food, economy and employment metrics to inform policy decision making.Drawing upon a bespoke partial equilibrium model, the Nigerian Energy-Food Model (NEFM), regionalised into the existing six geo-political zones of Nigeria: North-West, North-East, North-Central, South-West, South-South and South-East to ensure conformity with the existing administrative and economic units of Nigeria and facilitate quicker adoption and implementation of achieved results, was developed, populated using secondary data from different data sources and personal research visits to the Nigerian government agencies, and implemented via General Algebraic Modelling System (GAMS).Ethanol production analysis result from the model indicates that cassava is the economically ‘optimal’ feedstock, followed by sugarcane, in all six geo-political zones of Nigeria. The results demonstrate that Nigeria has the potential to produce sufficient feedstock and food crops to meet the current domestic ethanol, crop export and crop consumption demands, without affecting domestic food security in the short-run, due to availability of vast fertile uncultivated arable land and unemployed labour, providing positive energy, economic and employment benefits in the short term. Nevertheless, future expansion of the bioethanol programme to double current national ethanol and food consumption demands, would result in significant impacts on national land-use change, negatively impacting on domestic food production and increasing food prices.It is recommended that Nigeria's future biofuels' policy requires a carefully-articulated land-use policy to ensure that land allocation to bioethanol feedstock production is tempered by the need to allocate arable land to food production, in order to avoid consequential adverse impacts on its food security.