Macroeconomic, Sectoral and Distributional Impact of Gas MonetizationPolicy in Nigeria: A CGE Application

摘要

The Nigerian gas market experienced growth in recent years due to the gas development policies of thegovernment such as the Nigerian gas master plan. Nevertheless, the gas supply and utilization per capita hasbarely changed while policy objectives are largely unfulfilled. A new national gas policy 2017 recognizeda full-blown energy crises in Nigeria in spite of its abundant gas resources. It thereby aims to increasegas utilization with more contribution to GDP, grow key sectors of the economy and reduce gas flaringto 2 percent. A policy of the magnitude of gas monetization policy a posteriori would have significantpositive or negative impacts on macroeconomic, sectoral and distributional indicators. Is gas monetizationpolicy good for all all? Employing the comparative static CGE model, this study carries out evaluationof increased gas supply on the Nigeria economy from 80 percent flare gas reduction and 30 percentreduction in direct tax rate on production. Results show that increased gas supply from flareout have positiveinfluences on economic growth but slowed down with application of production tax incentives. The GDP,real investments, government revenues and sectors experienced growths except agriculture and transportsectors. The drop in average consumer prices encouraged household consumption as well as increasedwelfare. The study established causal relationship between increased gas utilization and economic growth.Efforts in driving the gas flaredown of monetization policy should be facilitated. The government shallexercise caution to ensure protection of the economy to guarantee proportionate health of the sectors thatwere negatively impacted such as agriculture and transport.