THE IMPACT OF ELECTRIC VEHICLES ON THE NIGERIAN ECONOMY By Prof. Abubakar S. Sambo

Protocols

I am very grateful to the organizers of this unique occasion to mark the 30th Anniversary of the ascension of the Uromi-born Emmanuel Andrew Chukwuedu Nwanze to the highly coveted position of Professor of Biochemistry in 1987 at the University of Benin where he has been an academic staff since 1976 for inviting me serve as the Guest Speaker at the occasion. To have worked in an institution for 41years, 30 of which were at the professorate grade, surely calls for a celebration.

This is not only regarding his excellent high quality academic attainments but also on the numerous high level manpower he has produced especially at the masters and doctorate degree levels and who are positively contributing their quota in the development of Nigeria and in many other countries.

I have chosen to speak on “The Impact of Electric Vehicles on the Nigerian Economy” in order to highlight the imminent reduction in the demand for the nation’s crude oil along with the associated reduction of foreign exchange and what should be done in Nigeria in view of the hitherto undue dependence on oil and gas as the revenue earner for our country.

As defined in wikipedia.org, “An Electric Vehicle is one that is propelled by the use of one or more electric motors that are activated using electrical energy stored in rechargeable batteries.” This means that electric vehicles use the energy stored in their rechargeable batteries which are in turn charged by electricity, the frequency of charging depending on the capacity of the batteries and the distances over which the vehicles are used. This means that premium motor spirit (petrol) which is the fuel for small vehicles, automotive gas oil (diesel) which is the fuel of large vehicles and aviation kerosene, which is the fuel used in aeroplanes, are replaced by electricity from batteries. This in turn means that the normal combustion of fuels in vehicles and the associated carburetor and injector systems are all replaced by electric motors that activate the driving shafts. Electric vehicles have shown to lead to sizeable reduction of energy consumption in kWh as a 2013 study conducted in the USA which showed the energy consumption reduction to be of the order 31%.

Researchers in advanced nations are working very hard to produce rechargeable deep cycle batteries that will enable electric vehicles to travel up to hundreds of kilometres on a single charge of the batteries. Some countries are even aiming at producing rechargeable batteries that will travel more than 1,500 kilometres on a single charge. Developments have also reached advanced stages for significantly improved electric motors and drives.Many countries have since announced the dates by which they will ban the production and import of petrol and diesel operated vehicles. For example:
i. Holland it is 2030
ii. India it is 2030
iii. Norway it is 2025
iiii. France it is 2040
v. Britain it is 2040
vi. Scotland it is 2032
vii. China it is 2040.

Of all the major international automobile manufacturers, Tesla seems to be leading in terms of producing vehicles, in terms of cost and distance per charge.

The major world-wide impact of electric vehicles is the significant reduction of the demand of oil and gas which is estimated to be about 70% demand by 2040. This is because the transport sectors of all national economies are the highest consumers of oil and gas. It should be noted that world-wide, energy planners conveniently classify national economies as consisting of industrial, transport, services and households. By 2040 it is envisaged that about 75% of all transport vehicles will be of the electric type. By then, there will be a sharp drop in the international demand for Nigerian crude oil. In addition the recent use of hydraulic fracturing,commonly referred to as fracking, which was used by American companies to drill into the ground to extract oil and gas from the shale rock that lays thousands of metres underground has also led to America to stop buying our oil. The discovery of oil in a number of countries, including neighbouring African countries, is also a contributing factor to the reduction of the demand for our crude oil. The sum total of all these, of course spearheaded by the advent of electric vehicles, is the significant reduction of foreign exchange earnings which reduction will be increasing from now to 2040 when the nation will only get about 30% of the foreign exchange earnings it is now getting.

On the other hand the nation will from now up to 2040 will have more oil and gas to be used internally not only for providing more transport fuels (petrol, diesel and jet fuel) but also we will have more crude oil for the following important utilisations:
1. Electricity Generation
2. Fertilizer Production
3. Pharmaceuticals
4. Plastic Production
5. Coal tar for road construction.

There is the urgent need for the nation to produce a detailed guide on how the nation’s foreign exchange earnings can be significantly expanded, especially through the Public Private Partnerships (PPP) for:

1. Development of large-scale agricultural farms including agro-allied plants to enable the export of some crops in their raw forms but much more in their processed forms. This will include grains, groundnuts, cocoa as well as hides and skins pre-oil reminiscent of the pre-oil era, but in a much larger-scale. The Kebbi-Lagos States LAKE Rice is a case in point. A report recently received and broadcast by Channels Television Station said that two large rice millers in Thailand have closed down, causing large-scale unemployment because Nigeria that has over the years been their major importer has stopped importing their rice. Apart from rice, numerous agro-allied industries to process other agricultural products like maize, cassava, yams, millet, potatoes, amongst others. This obviously implies that Nigerian businessmen have to be enticed to go into large scale agricultural productions. Farms for large-scale production of biofuels feedstocks like Jatropha and their mills, to produce biodiesel and such other important by-products like glycerin, should be strongly promoted. It should be stressed that the expected agricultural boost will not happen unless provisions for small-holder farmers to significantly improve on their yields, are provided. The small holder farmers will not only make more money by selling their products, under government’s control, but the off-taker will have more products to process.

2. Development of a large number of open-cast and underground mines across the country to tap on the large number of solid minerals like gold, iron ore, tin, columbite, niobium tantalite, talc, gypsum as well as coal and uranium in addition to bitumen. Apart from the mines, mineral processing plants should also be established in order to add significant export value to the mined ores and to subsequently increase their export values and of course more foreign exchange earnings for Nigeria.
3. With more electricity generation from the reduced sale of our oil, manufacturing industries, in line with the National Industrialization Policy and the recent National Economic and Growth Plan, are expected to come on stream so that Nigeria will be the manufacturing hub not only for West Africa but for much of Africa. For this to happen, there is need for road networks to be greatly improved within the country and to all major border towns. There should also be railway tracks to link all the State Capitals in Nigeria. The mega refinery being constructed by Dangote in Lagos that is expected to come on stream in 2019 and which will be refining 650,000 barrels per day and which is more than the combined installed capacities of 445,000 barrels per day of the four government refineries that are mostly operating very much below their installed capacities, will not only stop the importation of processed petroleum products to Nigeria but will also export the refinery products to other African nations. The Government should use the example of Dangote Refinery to entice potential industrialists to go into the development of large-scale manufacturing industries.

4. Significant improvement of the major tourism sites of Nigeria such as Yankari National Park, Gashaka Gumti National Park, Lake Chad, Ngwo Pine Forest, Port Harcourt Tourist Beach, Tinapa Export Free Zone and Resort, Osun Oshogbo Grove, amongst many others, should be provided with a range of accommodations from 3-5 star, and with round the clock electricity and internet service. A major requirement to boost income from tourism is the strengthening of security in the country in general and around the tourism sites in particular. This, if done, is a sure way of getting foreigners to be visiting and spending their money in Nigeria.

The issue of round the clock electricity supply can only happen when the energy mix for electricity is increased from the current two sources of gas and hydro to also include crude oil, coal, nuclear, solar, wind and biomass/biofuels, in addition to the gas and hydro. The sales agreements through which the government owned electricity entities were sold to private sector including six generation and eleven distribution should be strengthened in order to get the new private owners to invest in their new companies in line with the objectives of selling the companies to them. The nation’s transmission network should be regionalized and sold to the private sector. This will enable the new owners of the transmission companies to strengthen the systems in their regions in line with their respective capabilities.

Last year’s National Council of Power came up with the 30-30-30 policy for power which says that by year 2030, 30,000 MW of electricity, 30% of which is to come from renewable energy other than large hydro, will be produced. The Federal Executive Council has since adopted the policy. Although this is a very good development, the round the clock electricity to significantly improve electricity supply for the paradigm shift away from oil as the nation’s cash cow to a variety of other sources will not materialize unless effort is made to implement Goal number 7 of the Sustainable Development Goals (SDGs) which Nigeria has since signed and ratified. The SDGs were first approved by the United Nations General Assembly in September 2015 and were subsequently adopted by the Paris Climate Change Talks in December 2015.

Goal 7 requests all nations to by 2030:
1. Ensure universal access to affordable, reliable and modern energy services,
2. Substantially increase the share of renewable energy in the global energy mix,
3. Double the rate of improvement in energy efficiency.

Integrating vision 30-30-30 with Goal 7 of the SDGs will ensure a situation more close to round the clock electricity supply in Nigeria by 2030 especially if embedded power plants are used to bridge the demand-supply gap near heavy load centres and if off-grid power plants are deployed to communities far away from the transmission grid.

In closing my speech, Mr Chairman, I wish to emphasize that while electric vehicles will surely lead to a major slump in Nigeria’s foreign exchange earnings from oil and gas however if the nation produces a roadmap on the way out and starts implementing it as quickly as possible, the nation will surely generate even more revenue than it is now making. For this to happen there should be regular and reliable electricity supply by using more of our oil and by integrating the Vision 30-30-30 for Power with Goal number 7 of the SDGs. Use of more oil in the country can also lead to more fertilizer production and significantly improved road networks from coal tar production. These will in turn encourage significant improvements in such activities like agriculture, mining, manufacturing and tourism so that they can bring much more revenue for the nation. In other words, if planning can be started right away, our nation should have no fears about the advent of electric vehicles.

By Prof. Abubakar S. Sambo, OON, NPOM, B. Eng. (ABU); DPhil (Sussex); Regd. Engr (COREN), FAS; FAEng; FNSE; FSESN; FNIMechE; FNAEE; FRAESON; FNIM; FEI(UK), Faculty of Engineering, Usmanu Danfodiyo University, Sokoto

LEAVE A REPLY

Please enter your comment!
Please enter your name here