Positioning Nigeria for Sustainable Growth: A Case for Innovative Use of Subsidy Savings

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In an ideal society, the primary focus of government will be to make plans and initiate actions that align with the overall wellbeing of its people. Accordingly, those who are fortunate enough to find themselves within the corridors of power must then be instruments for the shaping of this visionary future for the people and country. In doing this, it is always imperative to consult the opinion of experts, look at data and projections, and then make a decision which aligns with the drive for a better and sustainable future for the people. 

The Renewed Hope agenda of the President Bola Ahmed Tinubu administration nestles nicely into this ideal performative function of government hence all players in government have been challenged to be at their very best in the creation of a future for Nigeria which is anchored on the principles of sustainability and overall good of the people. As a Member of the House of Representatives, it behoves on myself and my colleagues to pursue policies, laws, and champion oversight actions that are people-centered. 

One of such policies is the need for aggressive climate action to, first of all curtail the devastating impacts of climate change in the country which has hugely affected not only livelihood means, but also continues to cost the country a lot in terms of losses and damages in human and economic terms; but also to leverage on this opportunity to position the country on the path to sustainable development. 

As has been generally acknowledged, a key factor in driving climate action is funding. Many have of course stressed the need for such funds to come from developed countries considering that the greenhouse gase emissions which created the climate crisis were predominantly emitted by them. Yet, we have not really seen commensurate action in this regard by developed countries with actions not matching commitments. Which then raises the question; what next?

The truth is that developing countries like Nigeria cannot afford to depend solely on funding from developed countries. These funds are either not coming or tied up by severe conditions. As a people, we must therefore begin to take initiative ourselves to commence aggressive climate action. One of such initiatives is the need to begin to channel serious amount of money to address specific aspects of climate action annually. Critically, the Climate Change Act 2021 already provides for the establishment of a Climate Change Fund in Section 15. As part of my Post-Legislative Scrutiny (PLS), I am therefore proposing for this fund to be fully funded by committing 20% of fuel subsidy savings to it annually. 

According to the Nigeria Extractive Industries Transparency Initiative (NEITI), Nigeria spent the sum of N13.697 trillion on subsidy payments between 2005 and 2021. This is an average of NGN856 billion per annum under this period. According to data sourced from Nigerian National Petroleum Corporation (NNPC) financial report, Nigeria was said to have spent NGN4.39 trillion on subsidy in 2022 – this figure is said to have been more than the budget for the health and education sector. The NEITI report further shows that whereas ₦13.7 trillion was spent on subsidy between 2005 and 2021, ₦8 trillion was spent between 2022 and the first half of 2023. 20% of this projected sum will make a massive impact in Nigeria’s efforts to address climate change in many ways. According to Professor Chukwumerije Okereke, in addition to being directly invested in say improved climate-smart agriculture for rural women, or renewable energy, “Some of the money can also be used as catalytic funding to leverage bigger investments in renewable energy investment from international public and private sector sources.” This is the progressive way to go. In addition to this 20% helping to address some of our climate change issues and positioning us for green and sustainable development, it can also serve as a catalyst that can huge investments and fundings from developed nations.

I am ultimately convinced that there are more ways that the removal of petroleum importation subsidy can help drive Nigeria’s climate action and position the country for sustainable growth in-line with global trajectories. One of such ways is the commitment of a certain percentage of the subsidy savings towards investments and projects on climate adaptation, renewables, and climate-smart innovations. 

We must never forget that the country is also losing billions of Naira annually to the impacts of climate change vulnerability. It is equally important to note that food insecurity and loss of livelihood means due to loss of arable land have become key menaces posing serious dangers to our future. Most importantly, we must not fail to remember that many countries in the world, especially the developed countries of Europe—most of which are the markets for our crude oil– are working hard to fully transit to a fossil fuel-free world. If the latter happens while we continue to build our future on fossil fuel, we may be left with huge stranded assets. 

We must therefore be proactive and innovatively as the custodians of the future of our beloved nation.