The Nigeria Extractive Industries Transparency Initiative (NEITI) has warned that Nigeria’s economy faces substantial threats due to the potential for a permanent decline in global demand for crude oil.
During a board retreat/meeting in Lagos on Monday, Ogbonnaya Orji, NEITI’s executive director, emphasized that the global shift from fossil fuels to renewable energy sources poses significant risks to countries like Nigeria, which heavily depend on hydrocarbon-based natural resource revenues.
Orji highlighted Nigeria’s heavy reliance on oil revenues, stating, “At current dependency levels, Nigeria already faces significant threats to its economy from the prospect of a permanent decline in global demand for crude oil. Given the fiscal problems Nigeria has experienced from short-term disruptions in crude oil and gas output, the much longer-term and permanent decline in demand would have far-reaching impacts on the country’s economy.”
He noted that while the transition from carbon-based fuels will significantly impact Nigeria’s revenue and exports in the long term, it will also have other economic consequences. One direct consequence would be the loss of fossil fuel as an energy source. In 2021, crude oil and gas accounted for 46 percent of energy use and 78 percent of electricity generation in Nigeria.
“The transition would therefore require significant financial investment for the country to generate renewable energy to replace energy previously generated from carbon fuels,” Orji said.
He added that this financing and technological burden comes in addition to the substantial amount of money needed to close the current energy supply gap in Nigeria.
