Scholz expresses readiness to make investments in Nigeria's gas and mineral resources

31 Oct, 2023

Scholz expresses readiness to make investments in Nigeria's gas and mineral resources

During his two-nation visit to sub-Saharan Africa, German Chancellor Olaf Scholz expressed Germany's willingness to invest in Nigerian gas and critical minerals. Nigeria, still Africa's largest oil producer, is the focal point of this initiative.

Scholz's primary goal is to diversify and secure Germany's energy supply by importing natural gas from Nigeria. Following a meeting with President Bola Tinubu in Nigeria's capital, Abuja, Scholz stated, "This will have an impact on the global gas price." He contended that if more countries offered their natural gas and increased its supply on the global market, global prices would decrease.

President Tinubu emphasized Nigeria's abundant resources and expressed readiness to encourage investments in a gas pipeline. He encouraged German businesses to invest in pipelines within Nigeria.

Germany has encountered challenges in securing gas supplies for the upcoming winter. The nation has been seeking to diversify away from Russian gas since the onset of the war in Ukraine. Additionally, France's nuclear shutdowns in 2022 had a significant impact on energy supplies. In response, the German government decided to extend the operation of coal-fired power plants in 2022, a policy that was further extended in 2023.

The import of gas from Nigeria will contribute to ensuring an alternative energy source for Germany.While Germany currently imports crude oil from the West African nation, it has not been importing gas.

Nigeria is also actively seeking to attract investors to its mining sector, which currently contributes less than 1% of GDP in Africa's largest economy. According to research company Oxford Business Group, Nigeria possesses numerous unexploited mineral resources, including gold, iron ore, and recently discovered lithium.