Mainstreaming Climate Action into Nigeria’s Budget
- Victor Omefe & Victor I. Fagorite, PhD
Introduction
Climate change is increasingly becoming a serious challenge to Nigeria’s socio economic development. In recent years, Nigeria has recorded several cases of environmental disasters which can be attributed to exploratory activities of production and consumption. Increase in fossil fuel combustion and unsustainable land practices contributes to the release of greenhouse gases into the atmosphere, posing significant challenges for environmental sustainability and human welfare. Climate change, driven by these factors, has wide-ranging effects on ecosystems, livelihoods, human security, and the socioeconomic progress of societies.
These phenomena are shaping the trajectory of human development and welfare, with consequences such as increased extreme weather events, food scarcity, and environmental degradation. The degradation of an element of the environmental system will have negative feedback effects on the others. For example, human induced increased injection of carbon (iv)oxide (CO2) into the atmosphere has resulted in global warming with its consequent large variability in climate in the form of extreme weather events that are generating floods (e.g., the 2023 major flood disasters witnessed in more than half of the States of Nigeria) and massive erosion of land. The implications of these challenges range from hunger and ill-health to migration.
Source: Emission Database for Global Atmospheric Research
To effectively address these challenges, policymakers and government agencies in Nigeria must urgently prioritise the mainstreaming of climate action into the country’s planning and development frameworks. This proactive approach will act as a cushion against the adverse effects of climate change. By focusing on initiatives that promote renewable energy, sustainable agriculture, and efficient water resource management, Nigeria can not only enhance its resilience to climate change but also lay a foundation for long-term sustainable development.
Environmental Sustainability and Economic Resilience
The Nigerian economy remains heavily reliant on the export of oil and gas, with little progress made in diversification. The oil and gas industry is a major driver of Nigeria’s economy, accounting for approximately 65% of government revenue and more than 85% of total exports. In contrast, the country’s mining sector is significantly underdeveloped, contributing less than 1% to the GDP. However, the extraction of oil and gas has been associated with profound societal inequalities and catastrophes.
In addition, the country grapples with one of the highest rates of energy poverty, compounded by persistent power outages and escalating temperatures that disproportionately affect the large population without access to cooling systems or electricity. Alterations in precipitation patterns also pose a significant threat to Nigeria’s predominantly rain-fed agriculture. Addressing this issue has become a central theme for political aspirants, yet tangible actions have been lacking. Recent studies on Nigeria’s energy potential suggest that the country could potentially fulfil 59% of its energy demands through renewables by 2050, particularly solar power.
Budgets as Instruments of National Development
Economic prosperity is directly tied to how well a country can withstand environmental challenges. When a nation’s natural resources are depleted or the environment is lackadaisical, it can lead to economic decline, social unrest, and political instability. The environment is a complex system comprising the atmosphere, land, water bodies, and living organisms, all of which interact with each other. As production and consumption activities persist, negative externalities that are detrimental to sustainability will co-exist. Thus, the environment must be managed in a coherent and integrated manner that ensures sustainability.
A budget represents more than just a figure; it is a comprehensive tool that outlines a Nation’s economic actions for a specified period, typically a year. Fiscal strategy encompasses a range of economic policies that utilise public expenditures, revenues, budget surpluses or deficits, public debt, and its management to support national objectives such as economic stability, growth, poverty reduction, achieving the MDGs, and shaping the nature of growth. Crafting a fiscal strategy and formulating a national budget are inherently political processes that determine resource allocation and government priorities. To achieve optimal outcomes, it is essential to integrate policy, planning, and budgeting.
Nigeria’s macroeconomic transformation policy includes a thorough review of the budget process. Mainstreaming climate change into the budget involves the continual integration of adaptation considerations into policy formulation, budget allocation, implementation, and monitoring at national, sectoral, and subnational levels. This process, which spans multiple years and involves various stakeholders, is rooted in the belief that adaptation to climate change contributes to human well-being, promotes economic growth that benefits the poor, and helps achieve the Sustainable Development Goals (SDGs- 13).
During the 2024 budget interactive session with stakeholders at the Senate last year, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, highlighted Nigeria’s exploration of options from a pool of funds from climate financing to address deficits in the 2024 budget. He emphasised that Nigeria’s fiscal space had been depleted per the International Monetary Fund’s (IMF) stance. Edun proposed a strategic shift towards concessional funding, including climate financing, as a viable solution, stating, “Nigeria’s fiscal space is exhausted”. The solution is that we have to focus on concessional funding, cheaper funding, even free funding, and climate financing is the way.
Climate change can exacerbate issues such as poverty and hunger, highlighting the critical need to incorporate climate change considerations into budgetary decisions. Thus, collaboration with diverse governmental, non-governmental, and development actors is imperative. This approach ensures that annual capital budget allocations align with medium- and long-term development plans.
Importance of Mainstreaming Climate Action into Economic Planning of Nigeria
- Enhanced Economic Resilience: Mainstreaming climate action into Nigeria’s economic planning can bolster the nation’s resilience against climate change impacts. This approach would reduce vulnerability to extreme weather events, safeguard critical economic sectors such as agriculture, energy, and infrastructure, and ensure a more sustainable trajectory for economic growth.
2. Facilitation of Sustainable Development: To advance SDG 13, integrating climate action into economic planning is crucial for fostering sustainable development in Nigeria. This integration would ensure that economic growth is environmentally sustainable, reducing carbon emissions and promoting the adoption of green technologies and practices, which are vital for long-term sustainable development.
3. Improvement in Public Health: Mainstreaming climate action can significantly improve public health outcomes in Nigeria. By reducing air pollution, promoting the use of cleaner energy sources, and enhancing access to clean water and sanitation, this approach would contribute to a healthier population and overall improved well-being.
4. Stimulus for Job Creation: Climate action presents a unique opportunity for job creation in Nigeria. By fostering the growth of green industries such as renewable energy and sustainable agriculture, mainstreaming climate action can stimulate the creation of green jobs, thereby contributing to economic growth and social development.
5. Enhancement of Food Security: The integration of climate action into economic planning can play a crucial role in enhancing food security in Nigeria. By promoting climate-resilient agricultural practices and mitigating the impact of climate change on crop yields, this approach would help ensure a stable food supply for Nigerians.
6. Global Leadership and Reputation: Mainstreaming climate action would not only demonstrate Nigeria’s commitment to addressing climate change but also position the country as a global leader in climate action. By aligning its economic planning with climate goals, Nigeria can enhance its reputation as a responsible and forward-thinking global citizen, contributing to global efforts to mitigate climate change.
Conclusion
Global climate change is humanity’s greatest challenge, impacting the earth’s natural security and the long-term growth of human society. Nigeria cannot afford to take it lightly. Mainstreaming climate action into Nigeria’s budget and economic planning is crucial for ensuring sustainable development and enhancing resilience to climate change. By prioritising initiatives that promote renewable energy, sustainable agriculture, and efficient water resource management, Nigeria can mitigate climate change’s adverse effects and pave the way for a more sustainable future. Integrating climate action into economic planning will not only benefit the environment but also improve public health, stimulate job creation, enhance food security, and position Nigeria as a global leader in climate action. Policymakers and government agencies in Nigeria need to act decisively and incorporate climate considerations into budgetary decisions.
Victor I. Fagorite PhD is Senior Manager, Research at Clean Technology Hub.
Victor Omefe is Research Assistant at Clean Technology Hub.
