By love-89.com Emmanuel Addeh in Abuja
In a recent conversation at the 17th Annual International Conference of the Nigerian Association for Energy Economics (NAEE), held in collaboration with the International Association for Energy Economics (IAEE) from the United States, NAEE President Dr. Hassan Mahmud expressed concerns that Nigeria has yet to fully capitalize on its potential in the oil and gas sector despite the landmark passage of the Petroleum Industry Act (PIA) in 2021.
Dr. Mahmud highlighted that insufficient institutions and poor governance have hampered the transformation of Nigeria’s abundant human capital and natural resources into favorable economic and social outcomes. He emphasized that this is particularly critical for developing and emerging economies, where governance structures play a pivotal role in converting energy potential into economic growth and enhanced living standards.
“There’s ample evidence in the literature that weak institutions and ineffective governance have led to missed opportunities in some countries, preventing them from turning their vast human resources and natural wealth into positive economic and social results, such as industrialization and political stability—this is often referred to as the Resource Curse Syndrome,” Mahmud stated.
Reflecting on recent progress, he noted the significant achievement of establishing a robust and country-specific legal framework through the PIA. “The PIA represents a major step forward in addressing key structural, institutional, and bureaucratic deficiencies within the energy sector. It aims to streamline regulations, promote investment, and enhance transparency, all of which are crucial as Nigeria looks to diversify its energy mix away from a heavy reliance on oil and gas to include renewable sources like solar, wind, and hydroelectric power.”
He stressed the necessity for Nigeria to foster a competitive and dynamic energy market, positioning the country as a regional leader in energy development, with a focus on enhancing local content and boosting indigenous capacity within the sector. “We recognize the importance of leveraging the capabilities of our local professionals and firms to maintain global competitiveness, drive economic growth, and reduce poverty.”
However, Dr. Mahmud cautioned that despite the PIA’s innovative framework, achieving the needed institutional and political arrangements for effective implementation has remained elusive. During the two-day conference, discussions were expected to tackle these governance challenges and other pertinent technical issues related to the intersection of energy, economy, and environment.
In his keynote address, Prof. Anthony Adegbulugbe, Chairman and CEO of Green Energy International Limited, added layers to the dialogue by pointing out that many countries, especially in Africa and Asia, are grappling with economic growth, energy access, and the constraints of energy poverty. He remarked on the visible impacts of energy decisions made by developed countries, contributing to global warming and climate change, underscoring the pressing need for interconnected energy systems that support economic growth and environmental sustainability.
Prof. Adegbulugbe asserted that Nigeria and the broader African continent are at a critical turning point as energy systems transition from fossil fuel dominance to renewable energy sources. “In navigating this transformation, we must consider how to effectively leverage the energy-economy-environment nexus to promote good governance and achieve sustainable development,” he said.
He also stressed the importance of environmental preservation for long-term economic stability, which requires carefully crafted energy policies. “Energy is the backbone of economic development. In Africa, access to energy is vital for unlocking the potential for industrialization, innovation, and improved quality of life. Yet, many people across the continent, including Nigeria, continue to face significant energy poverty.”
According to the 2022 Energy Access Report by the World Bank, Nigeria has one of the largest energy deficits globally, with over 40% of its population—approximately 85 million individuals—lacking access to the national power grid. Despite being home to 17% of the global population, Africa accounts for only 3 to 4% of total global gas emissions.
Prof. Adegbulugbe concluded by urging African nations to leverage their abundant natural resources to strengthen their economies, alleviate poverty, and develop the infrastructure needed to support the adoption of renewable energy technologies moving forward.