Here’s what you need to know about Nigeria in 2021

(I will be updating this page with additional info in the days and weeks ahead)

Let’s start with COVID-19.

I recently tweeted this:

“From a Covid-19 POV, it looks like H1 2021 will be a lot like 2020 — restrictions, lockdowns, desperate attempts at curve-flattening. That’s probably the second most daring roguish feat 2020 has pulled off — this act of deluding us all into regarding it as an aberration.”

“Maybe we should fight back by postponing 2021 until further notice. Until 2020 fully and irreversibly convinces us it’s run out of impish energy.”

From a Coronavirus point-of-view, 2021 is the new 2020. Then again, maybe not — there are all the vaccines that have been approved by various governments and health authorities. Fingers crossed regarding actual levels of efficacy, as well as efficiency of rollout. (Nigeria is part of the Covax Facility, “a global risk-sharing mechanism for pooled procurement and equitable distribution of eventual COVID-19 vaccines.”)

On the last day of 2020, Nigeria again crossed the ‘1,000’ mark in Covid-19 infections, a milestone that was never reached in the first Wave earlier in 2020. As far as I know there is no appetite for similar scales of ‘lockdown’ (Airport closures, Inter-State Travel Restrictions etc) as seen in Q2 and Q3 2020; 2021 will instead see very creative attempts to slow down the virus without shutting down the economy, or slowing it down too much.

AFCFTA:

The African Continental Free Trade Area (AfCFTA) takes off today, January 1, 2021, with 54 of 55 eligible countries having signed on (Twenty of the 54 have yet to ratify the agreement, the final step before full national participation).

For now, it’s all potential — a lot of it, actually; the 3-trillion-dollar trading bloc has been described as the largest free trade area in the world (by country membership) since the emergence of the WTO — it remains to be seen how quickly and efficiently that potential will be translated into reality. There’s still a great deal of paperwork and negotiations — and hard and soft infrastructure (business environment reforms, ports, highways, etc) — ahead!

Nigeria is Africa’s largest economy and its most populous country (therefore largest market), so it’ll be interesting to see how the AfCFTA implementation plays out here, especially considering, one, that Nigeria was one of the last countries to sign the Agreement, and, two, Abuja’s irritation with the border-shenanigans of its neighbours — a sentiment which played a key role in the decision to close the land borders for an unprecedented 16 months (I hope to do a stand-alone border closure post very soon, and shed more light on this).

PS. There’s a very useful Explainer page on the AfCFTA here, by the Trade Law Center (TRALAC), South Africa, here

FISCAL REFORMS

In January, the 2021 Budget and the Finance Bill 2020, both assented to by President Buhari, will go into effect, as will the revised import tariffs on vehicles.

One of the Buhari Administration’s ambitions has been to restore the Nigerian Budget Cycle to a predictable January to December calendar. For many years the budget was not passed until well into the new year, making nonsense of implementation. For the 2020 budget, the restorative goal was achieved, and the budget signed into law on December 22, 2019, to take effect from January 1, 2020. The 2021 budget has heart-warmingly seen a similar adherence, with the President signing it into law on the last day of 2020.

The new Finance Act which should go into effect this month introduces a number of tax relief provisions for the benefit of individuals and small businesses. (Details later). It also reforms several existing Acts of Parliament — no fewer than a dozen pieces of legislation have been amended by it, reforming laws covering Taxes, Customs Duties, Public Procurement, and other areas.

The Finance Act is another important goal accomplished, the Buhari Administration has established a new tradition of accompanying the annual Federal Budget with a supporting/enabling Finance Act. The Finance Act 2019, to support the 2020 Budget, was the first, it has now been followed by the Finance Act 2020, for the 2021 Budget.

PETROLEUM INDUSTRY BILL (PIB):

Nigeria’s long overdue Petroleum Industry Bill should get passed by the middle of the year, according to the National Assembly. It’s been many years in the making, and should be transformational for the industry when eventually passed.

It will join several other landmark Bills passed and assented to under the Buhari Administration (Police Act, Correctional Services Act, Nigeria Center for Disease Control Act, Company and Allied Matters Act, Suppression of Piracy and Other Maritime Offences Act, Deep Offshore & Inland Basin PSC (Amendment) Act, Mutual Assistance in Criminal Matters Act, Federal Competition and Consumer Protection Act, Banks and Other Financial Institutions Act, and others

RAIL:

The Lagos-Ibadan Rail Line will go into full commercial operations, as the first double-track Standard-Gauge Rail Line in West Africa. The 156km line connects the commercial hub of Lagos to the city of Ibadan, and is the second segment of the Lagos-Kano Line that constitutes what is by far Nigeria’s busiest cargo route, and a historical commercial corridor that extends well beyond the country’s borders.

Construction is expected to start on the outstanding sections of the Lagos-Kano Standard Gauge Rail (SGR) Line in 2021, i.e. Ibadan to Abuja via Ilorin and Minna, and Kaduna to Kano. (I’m not sure if work will start simultaneously on all the sections, or the Kaduna-Kano segment will be take priority consideration).

In Lagos State, 2021 will hopefully see the long-overdue completion of the first line (‘Blue Line’) of the Lagos Light Rail project: a 24km line from Okokomaiko to the Lagos Marina; as well as the groundbreaking (financial close achieved in 2020) for the 24km Red Line from Agbado to Oyingbo in Phase 1 and on to the Marina in Phase 2.

Both lines are expected to reduce travel time from about two hours to 45 minutes; the Red Line will carry an estimated 22.5 million people monthly, while the Blue Line will move an estimated 12 million passengers monthly.

REFINERIES:

2021 is the expected year of delivery of the grand Nigerian industrial ambition that is the Dangote Refinery. (Completion timelines have shifted in the last two years: early 2020 at first, then late 2020, and now 2021). When completed, the Refinery (650,000 barrels per day capacity) will be the largest crude oil refinery in Africa, and the largest single-train refinery in the world.

Joining the Dangote Group in the private large-scale refinery space is BUA, a conglomerate better known — like Dangote — for its ambitious play in cement, sugar and other commodities. Having announced, in 2020, the selection of Axens of France to build a 200,000 barrel per day (bpd) refinery and petrochemicals plant in Akwa Ibom, Nigeria, 2021 should show just how serious BUA is about this project.

MODULAR REFINERIES:

Expect news of the completion of more Modular Refineries in Nigeria. That space is currently in the middle of a boom, after years of inactivity. There was only one Modular Refinery in operation in Nigeria when President Buhari assumed office (Several licensed but unbuilt). Today, five and half years later, the field is crowded — each of the Niger Delta States has at least one Modular Refinery project either completed or under construction. President Buhari commissioned the first phase of the Waltersmith Refinery in Ibigwe, Imo State in November 2020. With a capacity of 5,000 bpd in the first phase (completed), it will produce 271 million litres of kerosene, diesel, naphtha and HFO annually. Future phases will take it to 50,000 bpd.

MARGINAL FIELDS:

2021 should see the conclusion of Nigeria’s first Marginal Fields Licensing Round in almost twenty years; on offer are 57 marginal oilfields. On the last day of 2020, the regulator, Department of Petroleum Resources (DPR) announced the shortlisting of 161 companies “to advance to the next and final stage of the bid round process.”

GAS:

The Federal Government declared 2020 the Year of Gas in Nigeria, and went right ahead to demonstrate this. Look out for updates on some of the biggest gas projects Nigeria has ever seen:

• The 614km Ajaokuta-Kaduna-Kano (AKK) Pipeline (President Buhari broke ground on this in 2020)
• The Obiafu-Obrikom-Oben Gas Pipeline (OB3), running from Rivers to Edo States,
• The Escravos to Lagos Pipeline System — 2 (ELPS-2), running from the Niger Delta to Western Nigeria.

The Autogas Project that seeks to convert 1,000,000 vehicles to autogas capability, in 2021. According to the sector regulator, “Nigerians should have a choice of energy they want to use. That is price freedom. We want motorists to switch to autogas (CNG, LPG, or LNG) because it is cheaper and cleaner than petrol.”

Also worth paying attention to in 2021, the progress of the NLNG Train 7: At the very end of 2019 — December 27, 2019 — the Train 7 project of the Nigeria Liquefied Natural Gas (NLNG) Company Limited, which will increase its production capacity by 35 percent, and cement Nigeria’s position as a leading gas exporter, reached financial close. In May 2020 — right in the middle of the first wave of the Coronavirus pandemic — two significant pieces of news emerged:

1. The award of the EPC contract (in excess of 4 billion USD) for the Train 7 project to Saipem, in a joint venture with Daewoo E&C Co. Ltd and Chiyoda Corporation (SCD JV)

2. Signing of a $3 billion corporate loan deal by the NLNG, to finance the project — involving 3 export credit agencies (ECAs), 2 developmental financial institutions (DFIs) and 26 International and Nigerian banks.

POWER:

Look out for updates on the Siemens Power Project, also known as the Presidential Power Initiative (PPI), and also the construction of the Zungeru Hydropower Project, a 700MW plant in Central Nigeria.

GOLD:

The Segilola Project in Osun State, Southwest Nigeria, is expected to strike first gold in Q2 2021.

Expect to see progress as well on the Paimasa Gold Project near Abuja:

There should also hopefully be progress update on the construction of Nigeria’s first licensed gold refinery, the Kian Smith Refinery, in Ogun State. Was originally scheduled for completion in 2018, but appears to be behind schedule. A second licensed company, Dukia Gold, is also building a Refinery in Abuja. Both are expected to refine Nigerian gold locally, to London Bullion Market Association (LBMA) standard.

ELECTORAL AMENDMENT BILL:

This is also in the works; the National Assembly says it’s committed to passing it in 2021. Another long-awaited reform Bill that should improve the quality of the electoral process. Civil Society Groups are actively involved in this process.

ELECTIONS:

At the end of the Year, Anambra State will elect a new Governor, to succeed Chief Willie Obiano, who is completing his second term. Anambra stands out because it is the only State in Nigeria that is not governed by any of the two main parties, the All Progressives Congress (APC) and the People’s Democratic Party (PDP). There are many who see the Anambra governorship election as a bellwether for 2023 outcomes.

SECURITY:

Military Upgrades: Nigeria has 18 new military aircraft in the delivery pipeline for 2021/2022. Definitely expected this year are 3 JF-17 fighter jets (from China/Pakistan), and the first batch (out of a total of twelve) of A29 Super Tucano aircraft (from the USA).

PS. 23 new military aircraft have already delivered since 2016 (including 13 helicopters: 5 x Mi-35M; 2 x Bell 412; 4 x Agusta 109; 2 x Mi-171E), as President Buhari pushes to rebuild an Air Force that had not seen any significant investment in decades.

In terms of Police Reforms, demands for which drove the biggest street protests in the country in a generation, I personally hope that 2021 is the year that we start to see the actual hard work of reform being done (which, let’s be honest, is not stuff that can be accomplished on the streets. The streets have their usefulness, of course, but the truth is that the lasting work of reform will happen away from them).

Find details of the foundational reforms being spearheaded by the National Human Rights Commission (NHRC) here.