Political and Bureaucratic Support for Nigeria’s Energy Transition
Abel B.S. Gaiya
The transition from high carbon-emitting fossil fuels to low carbon energy requires action to be taken by a wide range of actors. Consumers, investors, entrepreneurs and governments all have a role to play. The government, often the largest single institution and employer in many countries, play a major role. However, whenever the role of the government comes up in discussions on energy transition, it is almost always for its function in providing an enabling environment and regulations for the private sector to thrive.
Yet the ‘government’ is not a homogenous entity. Governance involves officials at the central, subnational and local levels, each staffed with bureaucratic elites running day-to-day operations across a swathe of ministries, agencies and commissions. For Nigeria, Africa’s most populated and largest economy and having one of the most ambitious Energy Transition Plans on the continent, there are many ways that public sector actors and elites can support the country’s energy transition.
The most common measures taken (and advocated for) by government actors and institutions in supporting Nigeria’s energy transition have been:
● Creation and implementation of laws, regulations and policies (such as the Rural Electrification Strategy and Implementation Plan and Nigerian Electricity Regulatory Commission’s Mini-Grid Regulations 2016);
● Channelling finance into support programmes (as the Rural Electrification Agency has done with the World Bank- and Africa Development Bank-funded Nigeria Electrification Project promoting solar mini-grids, solar home systems and productive use of energy equipment; the Central Bank of Nigeria’s Solar Intervention Fund and the Bank of Industry’s Solar Energy Fund);
● Public procurement of renewable energy systems (as Federal and State ministries of transportation have done with solar street lights and solar systems for government buildings; ministries of agriculture have done with solar boreholes; or as the Lagos Metropolitan Area Transport Authority is currently doing with the procurement of electric buses to test their commercial viability as a boon to the state’s mass transit system);
● Funding and supporting renewable energy research (as the Energy Commission of Nigeria has done through six research centres across the country)
● Outright production of renewable energy equipment (as the National Agency for Science and Engineering Infrastructure is doing with solar equipment manufacturing in Nasarawa through NASENI Solar Energy Limited); and
● Local elites such as community heads who allocate land for renewable energy projects, signing tripartite agreements on behalf of their communities, and mobilising community members in maintaining installations.
While popular, these are not the only ways through which political and bureaucratic elites have been, and can be, involved in Nigeria’s energy transition. Clean Technology Hub is has implemented various energy transition governance projects, including the Internationale Klimaschutzinitiative (IKI)-funded “Communities of Practice as Driver of a Bottom-up Energy Transition in Nigeria” (undertaken in collaboration with Reiner Lemoine Institute and the greenwerk.), the Heinrich Böll Stiftung-funded “Driving Renewable Energy at State Level,” and a ClimateWorks Foundation-funded electric mobility research and database-building project between 2021 and 2023. Over the course of executing these projects, additional ways that government actors and elites have supported, and can support, the renewable energy sector, not only formally but also informally/personally, have been unravelled.
The Financial Capabilities of Political and Bureaucratic Elites
Nigeria’s lawmakers are among the highest paid in the world, earning annual salaries between $150,000 and $190,000 per annum. Federal public sector wages are higher, on average, than wages in the private sector. Additionally, an estimated $582 billion has been stolen from the Nigerian government since independence in 1960, meaning that there is also a large illicit transfer of money from the government to government officials and other elites. The result of all these is that, according to the World Bank, nearly half of all employment in the public sector accounts for the richest 20% of the Nigerian population. Even among the middle class, the highest percentage (26%) of those in the higher bracket (earning labour and non-labour incomes of ₦400,000+ monthly) are public sector workers.
In addition to their high income levels and access to rents, working for the largest single employer of labour in Nigeria, these elites are not numerically insignificant. The Nigerian government bureaucracy comprises 774 local government councils and bureaucracies, 72 state governors and deputy governors, 1,444 National Assembly and State House of Assembly members, 95 ambassadors and hundreds of armed forces generals and colonels. Ministers, commissioners, director-generals, managing directors and permanent secretaries exist across 943 federal ministries, departments and agencies (MDAs), 541 federal state-owned enterprises and hundreds of state MDAs — Lagos and Rivers States alone had about 107 and 120 MDAs respectively as of 2013 (for all Nigerian states it is likely more than 3,600 state MDAs in total).
There is also a large number of aides, including 289 special advisers, senior special assistants, special assistants and personal assistants to the office of the presidency, as well as hundreds of aides to the vice president, governors and deputy governors. There are therefore at least 8,000 top leadership positions in the Nigerian public system — taking into account deputy and assistant leaders, this can easily extend up to 24,000 top leadership positions at the local, state and federal levels (not including local, state and federal judiciaries).
Figure 1: Federal, state and local government elites in Nigeria
One large study from South Africa estimates that 25% and 43% of the middle- and high-income residents respectively are interested in paying for electricity based on green sources. Generally, higher income households have higher rates of solar energy adoption.
However, there is currently no data on solar systems ownership in Nigeria disaggregated by income level or occupation. Notwithstanding, it may be inferred that certain interventions occurring in the sector target certain income groups more than others. The Nigerian middle class (which, depending on the data source and the definition of “middle class”, makes up about 2–23% of the population) remains the major market for both the mainly gas-driven Nigerian Electricity Supply Industry (NESI) and petrol/diesel-powered generator sets imported from abroad. Innovative payment solutions are being developed to make solar home systems more appealing and instalmentally affordable to Nigerian middle class households who are usually dissuaded by the high upfront costs of these technologies.
Government and donor grant funding is supporting a small proportion of low-income and lower middle-income households, businesses and local communities who otherwise are unable to afford solar technologies. The Nigeria Electrification Project (NEP) and the Solar Naija programme are two major examples of such measures.
Upper-middle income and high-income households, on the other hand, are likely the groups presently providing the bulk of household demand without government or donor grant support. Since political and bureaucratic elites make up a significant share of these groups, it is important to explore ways in which they could contribute more to the growth of the solar energy sector.
Constituency Projects
Laws are not the only way for members of the National Assembly to make an impact on the renewable energy sector. These political elites also have the privilege of budgeting Zonal Intervention Projects (ZIP), otherwise called constituency projects, which are executed by the Federal ministries, departments and agencies (MDAs).
The projects are nominated by the 469 Members of the National Assembly from the 36 states and the Federal Capital Territory. These projects could range from the construction of health facilities, donation of tractors to farmers, facilitating employment training programmes, and other social or development projects. They could then be implemented by a federal ministry or agency on behalf of the lawmaker. These projects are not inconsequential. A project can range from ₦5 million to 250 million (over $10,000 to $500,000). In 2021, ₦100 billion ($200 million) was budgeted to execute 1,884 federal constituency projects.
According to Dataphyte, about ₦10.8 billion ($21.6 million) in 2021 constituency projects promoted access to electricity, 76% of which were “hard projects” involving works and construction.
Figure 2: Electricity allocation by project category (billion).
However, the common constituency projects in this category have been the installation of solar-powered street lights in various communities, installing transformers, and constructing hybrid street lights. There are also donations of diesel generator sets, street lights, electric poles and wires, or even replacement of electricity transformers. In other words, besides the mini-grid projects implemented by the Rural Electrification Agency (REA), most of the renewable energy projects tend to be solar boreholes, solar street lights and training of youths on solar installation.
Lawmakers should additionally seek to deploy solar mini-grids in their senatorial districts. Estimates made in 2018 suggest that mini-grids could cost between N30–N100 million (US$90,000–$300,000), with a median of N50 million (US$140,000), although these costs are likely substantially higher today due to the depreciation of the Nigerian naira. An example is the Akpabom Community Mini-grid in Akwa Ibom state, which began when a political representative in the Akwa Ibom House of Assembly, whose constituency includes the Akpabom community, initiated discussions with the project developer.
There are indications that some lawmakers may be interested in patronising the renewable energy sector. An official of one of the six sustainability research centres, focused on low carbon energy, under the Energy Commission of Nigeria (ECN), has stated that lawmakers had made propositions in the past for deploying renewable energy and energy efficiency constituency projects. More lawmakers need to be made aware of the opportunities they have to support their constituencies through renewable energy projects, which calls for governance-focused NGOs to more actively bring these to lawmakers’ attention.
Therefore, lawmakers do not have to limit their support for the energy sector to only passing enabling legislation. Such an approach typically means that they have to wait until a sector has achieved traction among private sector actors and investors before they are able to initiate and successfully pass legislation to support that sector. Examples are the clean cooking sector which has had no governing policy for years and the Senate rejection of the Electric Car Bill 2018, in both cases due to the weakness of the private sector in lobbying for laws.
Personal Interests and Alignments
The assessment of the roles of ministers, commissioners, director generals, managing directors, permanent secretaries and directors of ministries, agencies, departments and parastatals has typically been limited to those MDAs directly or immediately indirectly concerned with renewable energy. Institutions like the Federal Ministry of Power, the Energy Commission of Nigeria and the Rural Electrification Agency are typically classified as immediate actors which drive policymaking and programmes for renewable energy deployment. Others like the Central Bank of Nigeria, Federal Ministry of Agriculture and Bank of Industry help provide funding and a collaborative environment.
In addition, these institutions and figures typically only pay attention to renewable energy technologies when the private sector is strong enough to advocate for policies in support of the sector. Therefore, the clean cooking sector has had to wait a long time for the Ministry of Environment to inaugurate the National Clean Cooking Committee in 2022 to draft a national clean cooking policy. Likewise, the weakness of the e-mobility private sector partly accounts for the rejection of the Electric Car Bill 2018 and the fact that it was five years later, in 2023 that e-mobility featured prominently in a government policy document (the National Automotive Industrial Development Plan, 2023).
On the other hand, interest in the renewable energy sector is left to the influence of particular elites with more personal interest. Governor Emmanuel Uduaghan of Delta State, for example, was personally passionate about environmental sustainability and became the first Nigerian governor to institute a Climate Change Policy in 2013, a policy which included a section on renewable energy. After his administration ended, according to a director in the Delta State Ministry of Environment, things went stale on this issue as subsequent governors did not exhibit such passion.
In essence, there is a need to enable elites to develop interest in Nigeria’s energy transition beyond official institutional mandates (which leave a few MDAs to deal with the sustainability sector in silos), private sector strength (which leaves fledgling sub-sectors helpless and struggling until they become strong enough for advocacy), and the idiosyncratic emergence of ‘champions’ with passion for the sector (an infrequent occurrence).
If the interests of elites align with the renewable energy sector, it could help garner greater support among them for its advancement. In Delta State, for example, under the Heinrich Böll Stiftung-funded project implemented by Clean Technology Hub, it was observable that the state government officials who had more interest in the attempt to develop a renewable energy policy roadmap for the state were those who had solar PV systems powering their homes.
In one state, the Permanent Secretary of the state Ministry of Environment clearly stated that developing policies alone on renewable energy would be inadequate since state elites merely shelve these and do not press for their implementation. Rather, any efforts exerted towards instituting a renewable energy policy should be accompanied by tangible projects that align with the interests of political elites in delivering tangible gains for their political constituencies in order to generate broader and intensive interest in policy making and implementation in the sector.
Similarly, in an interview with a popular electric mobility company in Nigeria, it was revealed that certain branches of government institutions, including the Central Bank of Nigeria (CBN), the Federal Inland Revenue Services (FIRS), the Energy Commission of Nigeria (ECN) and NNPC Ltd had expressed interest in installing electric vehicle charging stations in their premises. The commonality among these institutions is that they are either top revenue-generating and quasi-independent agencies — CBN, FIRS and NNPC — or at the forefront of the energy transition and climate action — ECN.
In this particular case, the installation of charging stations was pushed by high level bureaucratic elites who could own their own electric cars. Many elites with electric cars often have private charging stations at their homes, which, as one EV charging station vendor stipulated, cost from as low as ₦300,000 ($600) to over ₦700,000 ($1,400) as of early 2023, depending on the charging capacity. Having a charging station at their offices, funded from institutional budgets, provides an additional avenue to charge their vehicles outside of their home charging stations.
In the solar mini-grid sector, it was an official from the Transmission Company of Nigeria (TCN), who owned farms near Dakiti community in Gombe State, and who had a positive rapport with the residents, that initiated the process for the development of the Dakiti Community mini-grid project which was completed in 2020. It was this official who advocated for the community’s electrification when the Rural Electrification Fund (REF) call for mini-grid projects was announced.
The importance of political elites in the sector is implicitly recognized in the proposed National Action Plan for the Development of Electric Vehicles in Nigeria developed by the National Automotive Design and Development Council (NADDC) in 2023. The proposed Action Plan includes a section on market development and awareness activities recommending that high networth individuals and groups be targeted including serving and retired ministers, National Assembly members, heads of MDAs, governors, deputies and commissioners, members of state assemblies, and justices of Supreme, Appeal and Higher Courts.
There is a third angle. There are concerns that key aspects of the energy transition compete with incumbent sub-sectors such as diesel and gasoline filling stations where many political elites may have sizable personal business interests. Several propositions have therefore been made to align policy ambitions with elites’ personal interests in several ways. One of such propositions was made by members of the EV policy committee set up by the National Automotive Design and Development Council (NADDC). The proposition is that the installation of EV Charging stations in petrol and diesel filling stations should be promoted in order to include owners of these filling stations in the EV transition. This is meant to enable the owners of such filling stations to benefit from the EV sector and therefore to increase their support for enabling policies and laws in favour of EVs. It also gives a response to some of the concerns around rejection of the Electric Car Bill 2018, including its undermining of the demand for Nigeria’s petroleum products.
A similar situation was faced during the initial drive to create the Renewable Energy Association of Nigeria (REAN) in 2017–2028. According to one of the key players in the formation of the association, the generator marketers lobby saw solar technology suppliers as key competitors and did not want this emergent bloc to be strengthened. This is significant, as Nigeria is the largest importer of petrol and diesel generator sets in Africa. Since the solar market was still substantially untapped, a resolution was to allow generator set providers as REAN members in order to transition them into seeing the renewable energy space as a market segment into which they could invest and profit from. In doing so, these traders would also make use of the import-export and distribution capabilities built over time in the generator set trade.
Disadvantaged Local Elites
Elites at the community level, such as traditional rulers, may lack the financial capacity that higher-level elites possess. Without having tens or hundreds of millions of naira to approach a mini-grid developer, for instance, to install a mini-grid in a community, the local elite is forced to wait for grant funding or government intervention to be available for these developers to reach their community. Considering the thousands of unelectrified and underserved communities in the country vying for attention from developers, this is a long wait. It is estimated that 27% of the over 22,696 population clusters in Nigeria would be best served by mini-grids — suggesting at least 6,128 mini-grids are needed, compared to only over 200 currently installed across the country. If it is assumed that the average mini-grid developer has 20 mini-grids in their pipeline, and if the 49 mini-grid companies listed on the Nigeria Electrification Project (NEP) website are taken to be the most credible, only 980 communities of the communities are on track to be electrified in the next few years.
Community financial capabilities differ nonetheless. Even among those awaiting external funding, there is variation in the ability to secure counterpart funding. A large community with a wide diaspora network, prominent indigenes or politically active representatives would be better able to secure the necessary counterpart funding (or full funding in some cases) than a community with limited networks and weak or inactive political representation.
This is a major problem in Nigeria since the country’s centralised federalism concentrates fiscal resources at the federal and state level, and most local governments and communities depend on state transfers for their administrative expenses. Local government officials do not enjoy the privilege of having constituency projects, while the budgets of local governments are largely controlled by state governments and are often predominated by recurrent expenditure.
Interviews with community leaders in several Nigerian communities indeed reveal that these actors are often open to initiatives for electrification, but complain about the lack of finance and the poor attitudes of electricity distribution companies (DisCos). Developers face limited availability of capital to undertake such investments on a large scale by themselves.
The local elite might also not have as much clout to influence outcomes if they are within the purview of a DisCo expressing reluctance to sign a tripartite agreement with the community and an interested mini-grid developer for an interconnected mini-grid. Local elites are therefore the category of political elites that requires the greatest external assistance in supporting renewable energy deployment in their zones of influence.
Conclusion and Recommendations
Politicians and bureaucrats may have more to contribute to Nigeria’s energy transition than has been suggested by most practitioners. Constituency projects, procurement of electricity systems for government offices, personal household solar system demand, and alignment with private businesses are some of the avenues through which these elites have, and can, make such contributions.
Given the fact that the Nigerian government is the largest single employer in the country, the large size of constituency project budgets annually (about ₦100 billion), the large number and financial capabilities of Nigeria’s political and bureaucratic elites, and the systematic interface between elites’ public/institutional interests and their private/personal interests, these contributions should not be regarded as trivial.
That these elites are key actors in both formal governance of (in their roles as policymakers, regulators and programme implementers) and informal support for (or opposition to) the energy transition should push donors, civil society and energy practitioners to engage them in this dual capacity. Lawmakers and heads of MDAs need greater sensitization on the opportunities present within the renewable energy sector, both for their institutional mandates but also for their personal interests. This could help speed up Nigeria’s energy transition.
There is also a need to measure and track progress in this area. Constituency projects in the renewable energy sector are not systematically tracked or investigated. A ranking of legislators by the extent to which they promote renewable energy in their Zonal Intervention Projects, and various MDAs by the extent to which renewable energy is adopted in their annual budgeting could help create a more overt and perhaps competitive spirit to promote elites’ involvement in Nigeria’s energy transition.
Disaggregated data on renewable energy supply by income level is also required to support further research, advocacy and sensitization among market segments most able to afford renewable energy systems. An intensive study of the high income segment could help identify strategies to boost demand within this segment. This would contribute to the improvement of renewable energy systems sales. The resulting increase in capital accumulation by renewable energy companies would increase the capital available for developers to satisfy demand by more lower income customers.
Abel B.S. Gaiya* is the Deputy Director of Programmes at Clean Technology Hub.
