Changing the Financial Climate Catalysing the Green Economy for a Prosperous Nigeria

A pragmatic approach to the green economy is required to develop effective strategies for solving the most important problems facing Nigeria today. A greener economy will provide better income opportunities, as well as tackle the need for social and financial inclusion.

There is a conflict between Nigeria’s dependence on oil for its economic wellbeing, and the sustainable development the nation strives to achieve. Since the Paris Agreement was struck in 2015, appetite for crude oil has waned globally. Presently, the world is on a quest towards a resilient, post-COVID-19 future that addresses the complex and intricately linked challenges of pollution, climate change, clean energy and infectious diseases. The demands for innovative strategies to combat these multifaceted challenges underline the importance of a transition to a green economy. According to Oliver Greenfield, convenor of the Green Economy Coalition, the green wave is rising and will wash away the old fossil-driven economy.

Earlier this year, the federal government of Nigeria launched the Imagine Nigeria report jointly with the United Nations Development Programme (UNDP) under a larger development framework that explores alternative pathways to further Nigeria’s development. The report explores the challenges and opportunities, as well as alternative scenarios for the future. It also proposes a series of recommendations to shape a sustainable and prosperous future for all in the coming decades.

Reviewed by over 300 Nigerians, both within the country and in the diaspora, Imagine Nigeria recognizes numerous unexplored prospects that citizens can harness for national transformation. The report notes that going green is in Nigeria’s best interest and that it is a strategic choice which, if fully pursued, can allow Nigeria to take advantage of an emerging global push towards low-carbon economies. A flourishing Nigerian green economy is estimated at $250bn investment opportunities in critical sectors, including energy, transportation, infrastructure, manufacturing, agriculture and land use. It is imperative to develop investment prospectus containing business cases and business opportunities that a futuristic green Nigeria presents. By going green, Nigeria can build a more inclusive, resilient and prosperous nation, overcoming prevailing challenges, such as the unprecedented impact of COVID-19, diminishing oil revenue, climate change, social inequality, poverty, and insecurity. 

STIMULATING THE GREEN ECONOMY

According to the Vice President Yemi Osinbajo, Imagine Nigeria provides the license to imagine a Nigeria freed of its past and current challenges; a Nigeria able to engage the future with the best possible tools in human and material capital—a bold, unblinkered, exploration of the great possibilities of our nation. ‘Imagine Nigeria hopes to stimulate interest and attention around issues of innovation, green economy, trust, leadership and framing a more positive national narrative,’ Vice President Osinbajo said at the launch of the report. 

In his remarks at the launch of the report, UNDP Nigeria Resident Representative, Mohamed Yahya, also said Imagine Nigeria was about creating a shift for a new African agenda and development narrative. The UNDP official noted that Nigeria’s re-imagination remained critical, not only for the country, but also for the African continent and the world at large. ‘It is about building a new economy and forging new realities in which Nigeria is a global leader and the destination for investors working to solve African and global challenges,’ Yahya added. 

The green economy, as defined by United Nations Environment Programme, is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. An inclusive green economy is a thriving economy that delivers considerable economic, social and environmental benefits sought by the Sustainable Development Goals and the Paris Agreement. This development path should maintain, enhance and, where necessary, rebuild natural capital as a critical economic asset and source of public benefits, especially for underprivileged people whose livelihoods and security depend strongly on nature.  

STRATEGIES FOR IMPLEMENTING SUSTAINABLE PRACTICES 

Practically speaking, green economy initiatives include programmes such as feed-in tariffs in Kenya, organic agriculture in Uganda, the Tunisian solar programme, the Agulhas ecotourism in South Africa and the Brazilian biofuel policy. Such initiatives continue to impact people’s everyday lives, evident in reduction in greenhouse gas emissions, decrease in environmental emergencies, creation of economic opportunities, availability of more green jobs, improved human well-being, promotion of social inclusivity, and sustainable livelihoods. A pragmatic approach to the green economy is required to tailor strategies for solving the most important problems facing Nigeria today. A good starting point is to end the unsustainable subsidy regime and redirect a significant portion of the fund for up-front expenses required to catalyse the green economy.  

In addition to exacerbating poverty, inequality and environmental risks, climate change adversely impacts the growth of the Nigerian economy both in the long-run and short-run. A green economy will lead to decarbonization of the Nigerian economy and help the country achieve the net-zero target for 2050 to 2070 as enshrined in Climate Change Act 2021. A greener economy will provide better income opportunities needed for poverty reduction and social inclusion, especially in Nigeria where the World Bank has said that the number of poor Nigerians is projected to hit 95.1 million in 2022. Some 25,000 jobs stand to be created through green public transport initiatives, and 12 million jobs through a massive increase in renewable energy; these will help reduce the current 33.3 per cent unemployment rate in the country. Energy poverty and insecurity can also be tackled by leveraging Nigeria’s limitless solar energy potential, combined with our substantial biofuel prospects. This will assist to enhance energy supply security and reduce the country’s exposure to volatilities in the global fossil fuel market.

BRIDGING THE GREEN GAP: INFRASTRUCTURE AND LEGISLATURE 

Urban green infrastructure is critical for bridging the infrastructure gap in Nigeria towards sustainable citieswhich are the frontline in lowering global carbon emissions. Fortunately, through the Nigeria Sovereign Investment Authority, the federal government has agreed with the African Development Bank, the African Sovereign Investor Forum and Africa50 to mobilize part of the $1.5 trillion required to close the infrastructure gap in the country. Nigeria suffers from a debilitating housing deficit estimated at 28 million housing units. Environmentally friendly as well as socially and economically viable green-building practices will help provide accommodation for the teeming Nigerian populace while avoiding negative impacts arising from using massive natural resources and energy throughout the building life cycle.

Green economy requires radical transformation and profound systemic change as noted by Ángel Gurría, former secretary-general of the Organization for Economic Co-operation and Development. Nigeria’s capacity for a green economy is extremely weak and the scale of action required to catalyse a green economy in Nigeria cannot be underestimated. Structural reforms and interventions to unlock green growth include direct public investments in green economy policies and infrastructure, targeted long-term public investments towards building efficient innovation systems, improving the level of education, training, and skills of the population, and supporting market development to enhance competitiveness.  

Equally important to align public policy and private investments is a carrot and stick approach, comprising subsidies, tariffs and penalties, tax breaks and rebates, green taxes local content requirements, green macro-prudential tools, new environmental standards and certifications, modern competition laws, etc. These will improve and strengthen general governance, legal and regulatory frameworks, national institutions, and public infrastructure, and boost investors’ confidence, and stimulate demand for green goods, services and technologies. 

GREENLIGHTING SUSTAINABLE SOLUTIONS

The Imagine Nigeria report proffers a societal approach, with all sectors of society acting together to implement its recommendations and suggestions. We cannot have an inclusive, fair, and vibrant future as envisioned by the report without the contribution of every part of society. 

The transition to a green economy in Nigeria will be contested and shaped by dominant political paradigms, actors and agendas as Nigeria is expected to lose one-third of its oil and gas revenue. Commentators have highlightedthe role of both fossil fuel divestment campaignsand climate denial movements in the global quest for climate-friendly development pathways like a green economy. The whole-of-society or ‘WoS’ approach, interchangeably used with whole-of-government (or WoG) without rigid demarcation, is a means of bringing together different actors to address complex challenges and achieve interrelated goals essential in fostering a green economy in Nigeria. The WoS approach allows for more long-term strategic cooperation, moving beyond public authorities, to engage all relevant stakeholders. These include families and communities, local authorities, private sector and industry, civil society, the media, academia, voluntary associations and international organizations. 

While the Imagine Nigeria report recommends some practical solutions, these steps are not the end of the process, but the beginning of a national conversation on the desired future, and will form the basis for collaborative efforts towards an inclusive green economy in Nigeria.  

Partnership with international organizations is vital. Major players in the green economy sphere such as Partners for Inclusive Green Economy, Green Economy Coalition and the United Nations Partnership for Action on Green Economy, will play critical roles in transformative change around knowledge and capacity building, and flow of foreign investments into the green economy in Nigeria.  

The drive towards a green economy must also be encoded by the legislature in order to side-step the usual pitfall of political short-termism to achieve a flourishing green economy in Nigeria; drawing examples from the Italian Provisions of the Environment to Promote the Green Economy and to Restrict the Excessive Use of Natural Resources Law No. 221 of 2015, and the French Energy Transition for Green Growth Act of 2015. 

The direction is clear: greening the Nigerian economy offers an important opportunity to reduce Nigeria’s dependence on fossil fuels, helps combat climate change and safeguards planetary health towards achieving sustainable livelihoods for the population. Moving forward, it is pertinent that Nigerian leaders and policymakers design and implement collaborative reforms and policies to foster and institutionalize a much greener economy

This essay was produced in partnership with the Nigerian federal government and UNDP’s Imagine Nigeria report team. 

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