Power to the People: Perspectives on Nigeria’s Energy Transition Plan

Nigeria’s economy is the largest in Sub-Saharan Africa, with vast natural resources including oil and the continent’s largest gas reserves. However, according to the International Energy Agency, over 140 million Nigerians—70 percent of the country’s population—lack access to energy. In response, the government of Nigeria aims to achieve universal energy access by 2030 and is implementing several policies and initiatives to increase access to clean and affordable energy for its citizens. But how can the government achieve this ambitious goal?

“Empowering communities with reliable and affordable energy is not just a necessity; it is a catalyst for socio-economic progress. It fuels education, healthcare, and economic activities, paving the way for sustainable development” says Enebi Opaluwa, a senior research and policy analyst at BudgIT Nigeria, and a participant in the 2023 edition of the advanced course “Natural Resource Governance and Energy Transition: Policies and Practice”, co-organized by NRGI and the NADEL Center for Development and Cooperation at ETH Zurich. (The 2024 edition starts next week.)

After the course took place, we spoke with Nigerian participants, most of whom chose to focus on maximizing community benefits and managing diversification during the course. By enrolling in this path, participants learned about policies to enhance citizen engagement and mitigate socioeconomic impacts and conflicts related to extraction. They also studied tools for managing revenue distribution at the national and subnational levels, and the implementation of local content policies and national and local development plans.

A financing gap and changing regulations

“In Nigeria, many of the current policies and efforts to increase energy access are directed toward ensuring increased access to electricity for clean cooking, clean sources of energy, and energy transport, but there are gaps and barriers that prevent these policies from achieving their goal, including affordability, cultural factors and financing,” says Opaluwa.

“Financing is a key issue,” agreed Agwu Ojowu, a senior consultant for Africa Practice. He points out that the Nigerian government faces financial constraints in investing in the necessary energy and infrastructure system for delivering energy from new sources to citizens. The challenge is exacerbated in highly regulated markets, where existing providers discourage private investment needed for cleaner energy sources. Excessive regulation and market capture dynamics make it difficult for new players to enter these markets, posing obstacles to the introduction of more sustainable energy solutions

In response to this challenge, the Nigerian government passed a constitutional reform bill that allows individual states within the country to supply electricity, breaking the monopoly of the federal government over power provision. State governments can now independently explore the electricity generation business and transmit and distribute electricity in areas covered by the national grid and in remote areas. “This dually regulated system is less convoluted and allows the government to,” says Ojowu. This new process and innovation must be managed appropriately, with strong frameworks to build the capacity of states to manage this new development, the participants agreed.

In alignment with the participant’s perspective on the recent bill empowering individual states to supply electricity, the potential for state governments to distribute electricity across the national grid and in remote areas is a notable opportunity. However, Chichi Nwosu, a principal consultant at CRowland, a Nigerian development consultancy, underscores a significant challenge. She points out that the lack of employment opportunities stands as a major barrier, hindering local communities from reaping the benefits of this opportunity. This obstacle is rooted in socioeconomic implications and the unaffordability of social security for these communities. Addressing this employment gap becomes crucial for ensuring that the positive outcomes of the new bill are more inclusive and impactful for local populations.

“Emphasizing community engagement from the outset is paramount for fostering investments and ensuring that policies resonate with and benefit the local population.” - Agwu Ojowu

“Having well-crafted policies and legislation is crucial, and effective implementation is essential. However, without active involvement from local communities during the development stage, the successful implementation and dissemination of these policies become challenging,” explains Ojowu. “Emphasizing community engagement from the outset is paramount for fostering investments and ensuring that policies resonate with and benefit the local population.” Many communities exhibit “cash upfront rent-seeking behavior” whereby they agree to receiving cash handouts at the start of projects taking place locally. He argues that this has prevented local communities from benefiting from extractive projects and playing an active role in the sustainable development of their local economy because it precludes more significant investments in infrastructure, health services that would likely be more beneficial to communities in the long run.

Communities need education on the energy transition

“There is a need to raise awareness and sensitize local communities on the energy transition,” says Kolawole Kolade, a program officer on climate change adaptation and energy accountability at the Paradigm Leadership Support Initiative. Kolade explains that it is essential for government officials and civil society organizations to involve local communities in the decision-making and policy-making processes, so that citizens can actively understand the impact the transition has on the socio-economic development of their communities.

Community and stakeholder awareness is particularly important in the context of Nigeria’s new Energy Transition Plan, explains Nwosu. The plan was developed with the ambitious goal to achieve net-zero emissions in terms of Nigeria’s energy consumption. “This is a bold plan,” says Ojowu. “There is a need to build a climate change awareness culture in Nigeria.” He believes that authorities should include climate change awareness in curricula across all levels of education. He says that citizens across the entire country should be aware of what the climate change adaptation and mitigation measures the government can take—and that they, the citizens, must ensure that these goals are met. Enebi adds that the government should propose and implement education courses and other initiatives (including public hearings and media campaigns) to educate the population on the energy transition and its impacts, both at the national and local level.

Giving communities a role and a voice

“Currently, there is a gap between central and national governments, particularly when it comes to the energy transition agenda,” adds Enebi. He says that the energy transition plan focuses on attracting investments, but it lacks specificity about the federal government’s responsibilities going forward, as well as ways in which local communities can participate in to ensure the plan moves in the right direction.

“Even at the subnational level, relevant actors do not thoroughly understand what their role is in the context of the energy transition and climate change.” - Kolawole Kolade

Enebi suggests that civil society organizations advocate for clearer milestones and ways to measure the plan’s progress. One way government authorities could achieve this could be by incorporating citizen participation in budgetary processes, whereby the government provides citizens with easily digested information around budgeting during the approval and audit stages, so that they can participate and play an active role at the approval stage during public hearings. “This process should be applied to the energy transition plan,” says Enebi.

“Even at the subnational level, relevant actors do not thoroughly understand what their role is in the context of the energy transition and climate change,” says Kolawole. “There is a need at the federal level to create a framework for subnational governments to look into their responsibilities and have a tool to track their progress.” Civil society organizations should drive engagement and bridge the gap between the government and local communities on knowledge gaps around the energy transition plan, he adds.

Environmental concerns

“Environmental injustice should also be an important pillar of the energy transition plan,” says Enebi. “The energy transition will happen, but at the cost of the environment.” The plan should focus on ensuring that this conversation is at the forefront of discussions among Nigeria’s key decision-makers, politicians and local communities. This is particularly important as international oil companies increasingly divest assets to national oil companies leaving extant environmental pollution unremediated, Enebi adds.

Ojowu suggests that while engaging with local communities, the government should prioritize environmental regulation that is inclusive and consultative, fostering economic activities and alternative livelihoods beyond the oil sector. This is key in ensuring that local communities rely to a greater extent on other sectors, such as fishing and other sources of livelihood, so that there is a sustainable future that does not depend on oil or encourage oil pollution.

A unique learning opportunity

Regarding the advanced course itself as a platform to reflect on Nigeria’s challenges and opportunities in the context of the energy transition, participants particularly valued engagement with other participants from all over the world. “The peer-to-peer learning has allowed me to understand the similar challenges that other countries are currently facing,” said Enebi. “This has been very helpful in identifying potential opportunities and solutions.”

Ojuwu particularly enjoyed learning more about the tax and budget aspects of natural resource governance. The technical knowledge provided during the path on local communities allowed Kolade to further explore Nigeria’s gaps when it comes to community engagement tools, and this is something he is excited to continue working on. And Nwosu highlighted the importance of meeting participants who are active in same space, and how this enables them to share knowledge and collectively drive change with the aim of pushing for a just and inclusive energy transition.