How consistent are Tinubu’s economic policies with ‘just energy transition’?

As the stakeholders across the globe intensify actions, geared towards reversing environmental degradation that has culminated in global warming, President Bola Tinubu’s administration has, no doubt, articulated a vision. This vision has seen economic development intertwined with climate action, aiming to position Nigeria as a leader in the global “green economy”. This approach reflects a recognition of the dual challenges and opportunities presented by climate change.

These policies are supposed to be consistent with the principle of “just energy transition” (JET) which is aimed at ensuring that the interest of every (global) stakeholder is catered for. This is as the world shifts from energies derived from fossil fuels to cleaner energies, to reduce greenhouse emission. It is to ensure that nobody would be made to be at the receiving end of any climate action geared towards climate gain or energy transition. That is, nobody should be made to pay for climate gain with his livelihood.

In pursuit of a sustainable economic future, President Tinubu has set an ambitious target for Nigeria to achieve net-zero emissions by 2060. This aligns the nation with global climate objectives and underscores a commitment to environmental stewardship.

To actualize this vision, the administration has taken some concrete steps, including the appointment of Dr. Nkiruka Maduekwe as the interim Director-General/Chief Executive Officer of the National Council on Climate Change (NCCC). This move aims to bolster Nigeria’s green industrial agenda and enhance investor confidence in sustainable initiatives.

Additionally, the establishment of the Office of the Special Presidential Envoy on Climate Action, led by an ex-media aide to the President, Chief Ajuri Ngelale, signifies a strategic effort to integrate climate considerations into national policies. This office is tasked with leading negotiations on climate-related matters and carbon market initiatives, reporting directly to the President.

Economic Strategies and Energy Transition

Recognizing the economic implications of climate action, President Tinubu has emphasized the need to transform the climate crisis into an economic opportunity. This includes plans to reduce carbon emissions, transition to renewable energy sources, and promote environmental sustainability as integral components of Nigeria’s development strategy.

A notable initiative is the Presidential Compressed Natural Gas Initiative (PCNGI), launched in August 2023. This program aims to convert petrol-and diesel-powered vehicles to run on CNG, leveraging Nigeria’s substantial natural gas reserves. The government targets converting 150,000 vehicles by the end of 2024 and one million by 2027, offering a cleaner and more cost-effective alternative to petrol.

Balancing Oil Production and Renewable Energy

While the administration acknowledges the necessity of reducing reliance on the oil and gas sector, it also supports increased oil and gas production for domestic use and export. This dual approach aims to balance immediate economic needs with long-term sustainability goals.

International Collaboration and Future Outlook

Nigeria has also engaged in international partnerships to advance its climate agenda. In September 2024, the country signed an agreement with China to enhance collaboration in areas such as the Belt and Road Initiative, human resources development, and nuclear energy. This partnership is expected to drive regional development and stability, contributing to Nigeria’s green economy objectives.

The above-mentioned policy initiatives are no doubt strategic, audacious, look good on paper, and is music to the ears of climate action advocates. But some other policies initiated and being implemented by the administration of President Tinubu do not seem to be consistent with the underlying philosophy of Jet. When the impacts of what they do or failed to do, are juxtaposed with the concomitant effects of the policies’ implementation on the people’s livelihood, it is like throwing a spanner in one’s own wheel of progress. Let’s take a look at it more critically:

Failure to regulate LPG price, and make domestic market a priority.

Beyond the rhetorical sound, there is nothing just, about the reality of some of those other policies of the government on an average Nigerian. For instance, there has been this campaign for Nigerians to embrace the use of Liquified Petroleum Gas (LPG) for domestic cooking, and the Compressed Natural Gas (CNG) for powering automobiles. When the campaign started about three years ago, the former (LPG) was being sold at the rate of about ₦500 per Kg. No sooner had Nigerians started embracing the use, than the price almost tripled. It’s now, on average, being sold at the rate of ₦1400. This is because there is no regulatory framework like we have it in the telecom and power sectors, where the Nigerian Communication Commission (NCC), and the National Electricity Regulatory Commission (NERC), respectively, regulate pricing. Another factor irrigating the arbitrary price increase is the failure of the government to make it mandatory for the company to supply the local market first, before exporting, as a matter of national security. This leads to artificial scarcity that triggers price increase. If one adds this to the spiralling prices of other essential commodities in the country, one would be faced with question of affordability to an average Nigerian who live on, less than $1 per day. It is imperative to note that, the minimum wage of ₦30,000 was still being implemented piecemeal by State Governors while all those economic tsunami happened. Now that the new minimum wage, put at ₦70,000 is also suffering the same fate, as the same characters who foot-dragged on ₦30,000 are still the same who would have to implement the new one, the hardship continues. This inadvertently leaves poor Nigerians with no other option than to resort to using charcoal stoves — a choice that would necessitate cutting down trees, which is deforestation, doing massive violence to the natural environment. The same goes for those using other cooking devices powered by fossil fuels. Meanwhile, that is what you’d get, when the Federal Government fails to regulate the price, for it to remain within the range of affordability to the people. Before you say, “what is this one saying?” remember, the Federal Government is a major shareholder in the Nigeria LNG Limited, Bonny Island in Rivers State — a major producer of liquefied natural gas.

Removal of subsidy on electricity tariff.

Another of such counter-policies is the decision to remove subsidy on Petroleum and electricity. Electricity, especially hydro and gas-peered ones is the cleanest most affordable sources of power, available for industrial and domestic uses. In such a case, the people would have to fall back on fossil fuels like petrol, diesel, among others, which contribute immensely, to “Global Warming”, through greenhouse emissions, to power their homes and businesses. That represents many steps backward, in terms of climate gains. What about the campaign for people to switch to electric vehicle? The conversion of petrol and diesel-powered vehicles into CNG ones is not being subsidised either.

Lack of clear-cut action plan on how to leverage abundant lithium deposit in the country.

By now, it is expected that, the government should have come up with a road map that would involve how we can maximise the opportunity of a massive availability of high-grade lithium deposits that abound in the country. And in the interim, one would expect the importation of electric vehicles to be duty-free, or at least, be at a reduced import duty, until such a time when local contents would be increased up to about 80 or 90%. But none of that is happening at the moment. The same thing goes for importation of solar materials.

No national action plan for human resourcing:

Now let’s talk about occupational displacement, or potential job losses for those whose jobs would be impacted by the energy transition. What sort of new skills’ acquisition, or human resourcing scheme is the federal government planning for them? I am talking about people who work in industries that are about to be phased out. What plan, has the government, to guarantee their jobs’ security? Your guess is as good as mine — none. Nothing on ground. All the Tinubu-led government seems to be interested in is how to introduce more and more tax handles without minding their incidence on people’s livelihood. The minders of the economy, under the leadership of the Finance Minister who is the coordinating-minister of the economy, don’t seem to bother, if those policies would negatively impact their mantra of “Renewed Hope Agenda”. People lose their jobs daily, and the only thing that interests the government is, how it would tax the few who are still very lucky to have theirs, out of existence.

In conclusion, while some of the President’s economic policies, on paper, demonstrate climate-sensitivity, integrating environmental considerations into the nation’s economic framework, the reality is to the contrary, due to contradiction and lack of policies coordination. But it is the belief of this writer that, through strategic initiatives, wider consultation, and international collaborations, the administration can navigate the complexities of the just energy transition scheme, while aiming for sustainable economic growth and climate resilience. With that, the outcome will be a win-win for all stakeholders – government and others.

Abubakar writes from Ilorin, Kwara state. He can be reached via 08051388285 or [email protected]