Despite Difficult Times, Fund is Made Available for Energy Transition, Says Bagudu

By: Michael Mike

The Minister of Budget and Economic Planning, Senator Abubakar Bagudu has said despite the difficult economic times, the federal government has ensured that fund is made available for the nation’s energy transition programme.

Speaking at a conversation: “Unlocking Climate Finance: Actionable Pathways for Nigeria’s Low Net Emissions Growth,” organised by the Africa Policy Research Institute (APRI) and Enzi Ijayo Africa Initiative, in Abuja on Monday, the Minister who was represented by Special Assistant,
Bolaji Onalaja, said: “There is no understatement of the importance of Climate action for all governments. It is particularly important for Nigeria given that the country has significantly suffered from the effects of climate change, from desertification in the Lake Chad Basin, which has led to migration of herders southwards and has contributed to banditry and clashes with farmers; to the degradation of mangrove forests; and to the frequent floods that have had a devastating impact on livelihoods across the country.”

He noted that “there is a need to raise financing to fund the energy transition, but at the same time as we face a challenging fiscal environment and other short term priorities (including ramping up oil and gas production, and taming inflation, it can sometimes be difficult to prioritize the mainstreaming of climate action but this administration led by President Bola Ahmed Tinubu has been consistent and has even included in the 2024 budget the inclusion of an energy transition fund and the implementation of the Presidential CNG initiative.”

In his opening remarks, the Executive Director, APRI, Olumide Abimbola said: “We know that climate change is already inflicting immense damage on lives and livelihoods, often to the people who have the least capacity to adapt to its effects such as in Africa. In the six years between 2012 and 2018, extreme weather events in the form of floods and droughts cost Nigeria over 31 billion dollars.”

Abimbola said: “We also know that over the past years, the position of African countries has largely been shaped by the Global North. There is an increasing need for Africans to shape and chart the continent’s climate transition pathways in line with local climate and socio-economic realities, as well as development priorities. Here, African countries such as Nigeria have a leading role to play.

“Nigeria is the most populous African country, the country with the youngest African population, the largest petroleum production, and one of the largest economies on the continent. What Nigeria does, can do, or plans to do, especially around financing, is of immense consequence for the continent.

“The global realities of climate change mean that the landscape for finance and global geopolitics is changing significantly. As climate and ESG considerations become increasingly important in accessing finance from the Global North, plans that do not have climate action in view are finding it more difficult to attract financing.

“This is leading to a significant decline in new investment in fossil fuels, for example, with investments into energy financing of any kind increasingly being based on climate considerations. For Nigeria, navigating between weaning itself off fossil fuel dependence and accelerating renewable energy investments is of extreme importance.”

He noted that: “In the last year, Nigeria received about two billion dollars in climate financing, a small fraction of the need, even in the energy sector alone,” adding that “increasing flows will not come from simply articulating our vision for climate action or making bold statements of intent. They will only come when we begin to internally reflect and shape what climate transition, especially a just transition, means to us – and when we begin to implement reform initiatives directed at clearly demonstrating that our plans are fact-based and rooted in the realities of our political economy.”

He said: “For us to do this, we need to reflect internally and evaluate actionable pathways for Nigeria’s Low Net Emissions Growth. Pathways that do not compromise on our development priorities, and that also incorporate resilience in the realities of foreseeable climate impacts.”

He said: “We need to ask ourselves critical questions such as: Is Nigeria doing the right thing in the right way or are we just dangling the prospect of billions of dollars of climate finance in the offing? Should Nigeria be looking to design more flexible short-, medium- and long-term strategies that will be fit for purpose? How should Nigeria be maintaining a balance between adaptation and mitigation? Should the focus be more on consumer-led promotion of technology products, rather than top-down, policy-driven prescriptions?”

Despite Difficult Times, Fund is Made Available for Energy Transition, Says Bagudu