T his short article aims at addressing the economic woes that have bedeviled our great country since the global price of oil began to plummet. Just when the Nigerian naira have buckled under the face of this economic quagmire and the populace have entirely lost hope in the federal government’s prospects of reviving the economy, there comes the petrochemical industry to bail the country out of this situation.

1. 1 The frail Nigerian economy and the shortfalls of the petrochemical industries | Aniagbaoso Ikenna Kingsley,
Polymer Engineer
his short article aims at addressing
the economic woes that have
bedeviled our great country since
the global price of oil began to plummet.
Just when the Nigerian naira have buckled
under the face of this economic quagmire
and the populace have entirely lost hope in
the federal government’s prospects of
reviving the economy, there comes the
petrochemical industry to bail the country
out of this situation.
It will interest you to know how many
products of our everyday life are made
from oil and gas industry and very few
people from the general public are actually
aware of it. It is in fact a fairly recent
industry that has made it possible to
produce all these goods: this is the
petrochemical industry.
The petrochemical industry is actually a
major sector of the large-scale petroleum
industry which occupies a key place in the
world economy as it produces the crucial
raw materials from petroleum, including
kerosene, liquefied natural gas (LPG),
diesel, ethane, plastic, rubber, yarn and
T

2. 2 The frail Nigerian economy and the shortfalls of the petrochemical industries | Aniagbaoso Ikenna Kingsley,
Polymer Engineer
other intermediary goods consumed across
the world. Oil refineries and natural gas
processing units produce streams that can
be upgraded into the petrochemical plants
to make higher-end products. These
products are first chemical intermediates,
also called base chemicals. They are at the
origin of a very important international
trading activity.
It is chagrin to the nation and much to our
detriment that the country’s refineries and
petrochemical plants have been neglected
for a long time and their productivities and
conditions have been below par. Now the
Nigeria currency is unavoidably losing
value in the international market and to
exacerbate the situation, foreign and even
indigenous investors are finding their way
out of the Nigerian business climate. This
spells sheer doom for the country if
nothing is done to reverse the trend and
stall the abysmal deterioration of the
refineries and petrochemical industries.
Let’s reason constructively on this issue of
national importance, the daily crude
consumption is over 445,000 barrels per
day besides there are over 1,800 plastic
manufacturing factories in Nigeria which
would require polymer pellets derived
from processing base oils as their basic raw
materials. The country looks to foreign
nations to satisfy this demand via
importation of petroleum products thereby
making the country to lose over $29.7
billion annually in revenue.
It is good enough to know that Nigeria is
blessed with oil as one of its abundant and
attractive natural resources but the idea of
selling off these unrefined resources to
other nations because of non-availability of
large-scale state-of-the-art petrochemical
refineries takes the similitude of selling off
a cow and going back to the buyer to buy
cow milk and meat.
The challenge here I believe has not been
the lack of investment but negligence on
the side of the federal government to
review extant policies and initiate new
investment-friendly policies that will

3. 3 The frail Nigerian economy and the shortfalls of the petrochemical industries | Aniagbaoso Ikenna Kingsley,
Polymer Engineer
favour the investors to troop into this
sector. Firms like Indorama Eleme
Petrochemical Limited (IEPL) located in
Port Harcourt, Rivers State have remained
lone range in Nigeria’s petrochemical
industry. As at 2013, the firm had an
annual installed capacity of 300,000 metric
tonnes of olefins, 250,000 metric tonnes of
polyethylene and 80,000 metric tonnes of
polypropylene, which are high value raw
materials that could earn the country so
much in reserve if exported. Even the
Kaduna and Warri refineries that ought to
provide the much-needed leap for the
country’s petrochemicals industry appear
to have failed to produce products that will
meet the yearning of their stakeholders.
Take for instance, at inception; the two
refineries were designed to produce
Carbon Black and Linear Alkyl Benzene
(LAB) used in the manufacture of deter-
gents. But this capacity has also been
affected by the low crude oil refining
capacity in both firms. Petrochemical
products, like olefins (ethylene, propylene,
butadiene) and aromatics (benzene,
toluene, xylene) are used in end-user
markets such as paints, plastics, explosives
and fertilizers sub-sectors. It is estimated
that Nigeria utilizes less than 40 per cent of
the refinery products, which results in
lower petrochemicals yields, thereby
creating a need to augment with imported
raw materials.
It has been learnt that Nigeria’s inability to
develop its petrochemical domain is
principally the reason manufacturing
companies are depending on imports for
over 80 per cent of their raw materials
worth over $10 billion (about N2 trillion at
the rate of N200 to a dollar) yearly. It is
also the reason quite a good number of
manufacturers are going out of business
since the Central Bank of Nigeria’s (CBN)
forex restriction on more than 41 firms is
faltering efforts to get its raw material.
In Nigeria and across the world, foam,
plastic, paint and textile manufacturing
companies depend on derivatives of petro-

4. 4 The frail Nigerian economy and the shortfalls of the petrochemical industries | Aniagbaoso Ikenna Kingsley,
Polymer Engineer
chemicals most of which are imported
because the indigenous industry has not
received due attention.
Prof. Abiola Kehinde of the University of
Lagos, in a research document entitled,
“Strategy for the Development of the
Petrochemicals Industry in Nigeria,”
disclosed that the Nigerian petrochemicals
market (excluding export of crude oil) is
worth $14.03 billion in 2008 with forecasts
projecting it could hit $29.7 billion by the
end of 2015.
Nigerian refineries need restructuring of
the operation to allow for greater private
sector participation, which is undoubtedly
going to increase the capacity utilization of
these refineries. This will pave way for the
establishment of more subsidiary
industries that will absorb the
petrochemical intermediates for due
conversion to finished products.
Consequently, more jobs will be created to
engage the teaming unemployed youths.
By projection, I see Nigeria rising out of this
economic predicament to become a
technological hub in Africa where most if
not all manufacturing industries will be
launched into their apex by the sole and
colossal productivity of the indigenous
petrochemical industries, that is if we get
things right.