Nigeria Bets on Natural Gas

Abstract

The commodity export is the main source of revenue to the state budget for the majority of countries of the African continent, which have rich hydrocarbons reserves. Also, this fact allows the state to attract foreign investment for the overall economy development and solving social problems. However, such fossil reserves, as history shows, can also lead to economic stagnation and corruption. This scenario of a country’s economic development is called “the resource curse”. Some African countries, such as Libya, Angola, Nigeria and others, have different degrees of the identified problems. The combination of resource abundance and mismanagement can be extremely dangerous for a country that is on the path to the oil and gas sector reforms. Since the 2000s, Nigeria has been reorganizing the oil and gas sector and making more efficient use of natural gas. This country has made significant progress in reducing gas flaring and has also taken a leading position in the global LNG market. Nevertheless, it has many difficulties in promoting relevant legislative initiatives and specific ideas. Shortages on the domestic gas market, administrated pricing mechanism and insufficient infrastructure are not the full range of problems for Nigeria. Against the backdrop of optimistic natural gas production forecasts, solving these issues is important for the development of Nigeria and Africa as a whole. Therefore, the particular interest is to study the gas industry in specific countries in order to identify factors that directly affect its development. This article examines some aspects of the gas industry in Nigeria in relation to the problems and growth prospects of this industry in the country.