While the government continues to promote renewable energy as part of its climate strategy, it is simultaneously encouraging investments in oil exploration, deep offshore production and gas infrastructure, creating what climate policy advocates describe as a contradiction at the heart of Nigeria’s energy transition.
For Executive Direcror, Policy Alert Nigeria, Tijah Bolton, who reviewed aspects of a new assessment of Nigeria’s Energy Transition Plan, the problem goes beyond the slow implementation of renewable energy projects.
It reflects a deeper reluctance by the Nigerian state to move away from an economic system built around fossil fuels.
Speaking at the launch of the report, Four Years On Examining Nigeria’s Just Transition Plan, produced by Corporate Accountability and Public Participation Africa (CAPPA), Akpan said the country appeared to be placing renewable energy ambitions on top of an economy still heavily dependent on oil and gas.
“The report is not saying that the transition is failing or has failed. Rather, what it is saying is that there is a clear layering of what appears to be a pretension to clean energy ambitions on top of a reluctance to exit dirty energy,” he said.
The observation captures one of the central contradictions identified in the assessment: Nigeria wants to benefit from the emerging global clean energy economy without sufficiently confronting the economic and political structures that sustain its dependence on fossil fuels.
The Economic Cost Of Holding On To Oil
Nigeria’s continued reliance on oil revenues exposes it to economic risks as the global energy market gradually changes.
Bolton recalled the experience during the COVID-19 pandemic, when falling oil prices and disruptions in global demand exposed the vulnerability of countries heavily dependent on crude exports.
He cited the reported stranding of Nigerian oil and liquefied natural gas cargoes during the period, noting that the country’s relatively high production costs meant that the collapse in international prices severely squeezed profit margins.
According to him, the experience offered an early warning of the economic consequences Nigeria could face if it fails to diversify before global demand for fossil fuels declines further.
He argued that the country should not wait until external market pressures make the transition unavoidable.
“The world is moving to a point where you are not going to need any push to exit the fossil fuel economy. So, better exit now than later,” he said.
However, rather than demonstrating a decisive shift, government policies continue to encourage further investment in oil production.
Bolton pointed to incentives granted to deep offshore oil operations, including developments around the Bonga field, as evidence of the government’s continued commitment to expanding the petroleum sector.
Although attracting investment is important for economic growth, he questioned whether the government adequately considers the long-term costs of the incentives offered to investors.
He argued that Nigeria needed to undertake comprehensive cost-benefit assessments to establish how much public revenue it sacrifices through tax incentives and other concessions and what those resources could achieve if invested in health, education, social protection and other development priorities.
The concern, he suggested, is that the government may be sacrificing resources needed for broader development to attract investments into an industry whose long-term economic prospects are increasingly uncertain.
The gas transition dilemma
Another concern raised in the assessment is Nigeria’s growing reliance on gas as a supposed bridge towards cleaner energy.
Although natural gas is frequently promoted as a transition fuel, Bolton warned that extensive investments in gas infrastructure could lock the country into another generation of fossil fuel dependence.
Unlike some renewable energy projects, gas infrastructure requires substantial upfront investment and often takes decades to generate returns.
Such long investment cycles, he explained, could discourage future governments from moving away from gas because of the financial pressure to recover the resources already committed.
He also highlighted the environmental and social consequences for communities affected by gas flaring, land appropriation and other activities associated with fossil fuel extraction.
The concern is particularly relevant as Nigeria continues to promote its gas development ambitions under the Decade of Gas initiative.
For Bolton, the country must carefully examine whether such investments genuinely support a just transition or simply extend its dependence on fossil fuels under a different label.
The CAPPA assessment similarly questions the assumption that expanding gas infrastructure automatically represents progress towards a cleaner energy system.
Who Pays For The Transition?
Beyond the economic contradictions, the report raises concerns about the people who could be left behind as Nigeria gradually changes its energy mix.
Nigeria’s Energy Transition Plan anticipates the loss of about 110,000 jobs in the oil sector. However, Bolton argued that the potential consequences extend beyond formally employed petroleum workers.
He noted that more than 90 per cent of Nigeria’s workforce operates in the informal economy, with many livelihoods directly or indirectly connected to activities within the oil and gas value chain.
These include workers and businesses whose economic activities depend on transportation, distribution, trading and other services associated with the petroleum industry.
According to him, focusing only on the number of formal oil-sector jobs that could disappear would overlook the wider employment implications of the transition.
Although Nigeria has developed just transition guidelines, he said the framework was yet to receive the necessary Federal Executive Council approval to strengthen its implementation.
He therefore called for the social dimension of the Energy Transition Plan to receive greater attention, particularly policies guaranteeing retraining, income security and alternative livelihoods for affected workers and communities.
The report also draws attention to the financial burden associated with Nigeria’s electricity sector.
Bolton cited nearly N6 trillion spent on electricity subsidies over the past decade, alongside mounting debts within the sector, questioning the sustainability of committing public resources to an electricity system that continues to struggle with structural inefficiencies.
For him, the central question is whether government spending and investment decisions are preparing the country for a new energy future or reinforcing existing weaknesses.
The Niger Delta’s Unresolved Burden
Perhaps the most significant social dimension of Nigeria’s energy transition is the fate of communities that have endured decades of environmental damage from oil exploration.
Bolton argued that the transition must not become another development programme in which communities bear the costs while governments and investors determine the benefits.
He called for climate reparations and loss-and-damage financing to reach communities that have suffered the consequences of fossil fuel extraction, particularly in the Niger Delta.
“The Niger Delta has paid a huge price for the current fossil fuel economy,” he said.
He warned that communities rich in minerals required for the global clean energy transition could become new sacrifice zones if governments fail to protect their land rights and livelihoods.
The concern raises an important question about the meaning of a just transition: whether the shift to cleaner energy will genuinely improve the lives of communities or simply replace one form of resource exploitation with another.
For Bolton, the findings of the report can be summarised in three words: “Delay is dangerous.”
As Nigeria reflects on four years of its Energy Transition Plan, the challenge is no longer simply to announce renewable energy ambitions but to confront the economic interests, institutional weaknesses and social inequalities standing in the way of implementation.
A transition that expands clean energy while protecting the structures responsible for fossil fuel dependence may achieve new investment targets without delivering meaningful change.
For the communities that have already paid the price of extraction, the consequences of getting that transition wrong could be another generation of environmental damage and economic exclusion.
Source: Voiceofnaija
