Nigeria loses $30bn yearly over neglect of its petrochemical industry

The inability of the Nigerian government to utilise its refineries to full capacity has led to the abysmal deterioration of the petrochemicals industry, making the country to lose over $29.7 billion annually in revenue. The significance of a vibrant petrochemical industry to an economy with daily crude consumption of about 445,000 barrels still largely dependent on product imports cannot be over emphasised.

For Nigeria, the petrochemicals industry, a sub-sector of the petroleum industry, occupies a key place in the world economy as it produces the crucial raw materials from petroleum, including kerosene, liquefied petroleum gas (LPG), diesel, methane, plastic, rubber, yarn and other intermediary goods consumed across the world.

It is little wonder therefore that the country’s failure to harness these resources has left many companies that ordinarily should depend on raw materials from domestic petrochemicals in a comatose state, while those struggling to survive are doing so at a huge cost in the face of the nation’s dwindling foreign exchange inflow.

Demand for petrochemicals products drives activities in the end-user segments, which include a well-developed manufacturing sector, that provides a ready market for end-products of the industry. It was learnt that Nigeria’s failure to develop its petrochemical plants is largely the reason manufacturing companies are dependent on imports for over 80 per cent of their raw materials worth over $10 billion (about N2 trillion ) yearly.

It is also the reason many manufacturers had gone out of business, especially during the Central Bank of Nigeria’s (CBN) forex restriction on 41 firms. 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.

Source: The Sun

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