Nigeria’s Central Bank Czar, Mr Godwin Emefiele, disclosed in Abuja at the National Capacity Building and Sensitisation Workshop on Biofuels, organized by the Petroleum Products Pricing Regulatory Agency, PPPRA and the Ministry of Petroleum Resources, in collaboration with NNPC that $50 billion would be set aside to fund and stimulate investment in production of biofuels, under the Biofuels Equity Investment Fund, BIEF.
The BIEF would be jointly funded by parastatals of the Federal Government and development banks, including the Bank of Industry, Bank of Agriculture and Development Bank of Nigeria. The proposal stipulates that its investment shall be up to a minimum of five per cent and a maximum of 10 per cent in bio-fuel related projects.
Part of the incentives include grant of pioneer status, tax holidays to private sector entities involved in any activity related to the production of crops for biofuels production, exemptions from other taxes, such as withholding and capital gains tax, exemptions from payment of import duties for the first five years, subject to review; exemptions from import duties, taxes, all other taxes and charges relating to plants, machinery, growers, chemicals, fertilizers, pesticides and materials for use in biofuels production.
This initiative is designed to leverage on the country’s immense agricultural potentials, in order to create a synergy with the petroleum sector, by developing a biomass-based fuel economy for Nigeria. Biofuels can enable the country develop a low carbon economy and gradually reduce environmental pollution associated with fossil fuels.
This is just a proposal at this stage. It’s not uncommon for regulatory agencies to make pronuncements that never get implemented. However if this proposal is eventually implemented, the immense socio-economic benefits derivable from domestic production of biofuels, ranging from the expected increase in agricultural activities, would translate to enormous job creation, thereby, contributing to the growth of the country’s GDP.
Biofuels would also help create a commercially viable and sustainable agro-industrial cluster across the country and provide the enabling environment for biomass co-generation of electric power.
The biofuels industry has huge investment potentials likely to create opportunity for large, medium and small scale investors which Nigeria would need to leverage to compete with the industrialized nations.