Can the Nigerian biofuel policy and incentives (2007) transform Nigeria into a biofuel economy?

Nigeria's economy is largely dependent on petroleum, yet the country is suffering from fuel supply shortages. In response to the transportation fuel supply difficulties in Nigeria, the country released the Nigerian Biofuel Policy and Incentives in 2007 to create favorable investment climate for the entrance of Nigeria into the biofuel sector. The paper assessed the progress made thus far by Nigeria, 4 years after the Nigerian biofuel was released in an attempt to answer the question whether the policy is adequate to transform Nigeria into a biofuel economy. The study found that little progress has been made, which includes commencement of the construction of 20 bioethanol factories, installation of biofuel handling facilities at two depots (Mosimi and Atlas Cove), and selection of retail outlets for biofuel/conventional fuel mix. The site construction of the announced biofuel projects is now slow and other progress is marginal. We therefore conclude that the Nigerian biofuel policy is unlikely to transform Nigeria into a biofuel economy unless the Government revert and refocus on biofuel and include additional financial incentives such as grants and subsidy to complement the tax waivers (income, import duty, VAT), loans, and insurance cover contained in the policy.