Unemployment lies at the heart of Nigeria’s economic crisis, BFA Foundation’s founder and CEO Olu Verheijen has said, and developing the country’s gas resources will be a valuable step in industrialising.
Verheijen’s foundation is focused on offering opportunities to those who are disadvantaged and lack access to employment. “Gas utilisation, rather than export, is the quickest path to economic transformation and the surest way to job creation,” she said.
The Nigerian Bureau of Statistics (NBS) put unemployment at 23.1% in the third quarter of 2018. This is the last period for which it published official numbers. A government plan, published in June, warned this may rise to 33.6% – or 39.4 million people – by the end of 2020.
“The foundation focused first on women with STEM qualifications, who have graduated, but don’t have the right skills to secure a job,” Verheijen said. After interviewing 200 graduates, the list was whittled down to five. These five were then placed in training for solar design installation.
The challenge is to find jobs for the graduates that does not require a new degree. This first round was a trial effort intended to test the model. Hopes to scale it up have been delayed by coronavirus restrictions.
“One thing I would change the next time around is to hold workshops for those going through the application process. We can help people understand soft skills around professionalism,” Verheijen said. “Those systems are not in place and as a result we probably missed some really good candidates.”
Career mentoring is another area where more work could be done, she said. In particular, this would look at the benefit of focusing on longer-term gains, rather than just short-term wins.
“The last point would be the return on investment (ROI). The foundation is self-funded for now but to scale up it will need to shift to repayable grants. This would involve those who benefit from placements being able to pay back that investment over the first year of their employment.”
Verheijen went on to say that the foundation planned to put workers in industries that were stable and resilient – a characterisation that may sit at odds with oil, given recent price swings.
Other parts of the energy sector may offer better odds, though. The number of jobs involved in oil production is limited. Gas and solar have more scope to grow in Nigeria in pursuit of the domestic market.
“Gas is essential for broad-based economic growth. Industries need more power and the best way to do that is through gas. Spending more time unlocking that opportunity will have an impact on the wider economy and there will be a multiplier effect,” Verheijen said.
The executive, who spent a substantial amount of time working on Nigeria’s Natural Gas Master Plan, said the challenge for the country was more transmission and distribution, rather than generation.
“The government needs to focus on creating incentives to attract private capital to the sector. It needs to reframe around an enabling perspective, rather than interventionist,” she noted.
Verheijen called on work to unlock the opportunity offered by the country and move beyond domestic diesel generators. Improving gas infrastructure would be a good first step.
The Nigerian government is planning to boost household solar generation as part of its response to the current economic malaise.
Improving household access to power is a social good, Verheijen said. But it will not provide the economic transformation the country needs. “Solar will play a role in the future but it’s not big enough scale to power the industrial growth we’re talking about. For the most part, that is gas.”
Environmentalists have been increasingly critical of new fossil fuel power plans. Verheijen acknowledged that in some cases the world should be transitioning away from such consumption.
“In Africa, that’s not the right approach and it may be unjust to insist that’s the case. African consumption is not part of the problem, the economies with the biggest contributions need to do the most.”
Increasing gas use would also emit less than some other fuel sources, such as diesel. Nigerian consumers are “paying more for power from diesel than if they paid market prices for access to a reliable grid”.
Nigeria has recently launched construction on the Ajaokuta-Kaduna-Kano (AKK) pipeline, a welcome step in increasing gas access. Progress is still slow, though, suggesting no quick fixes for the country’s employment challenges.