As the impacts of climate change become more prevalent, clean energy sources have grabbed attention while more countries begin ambitious implementation of plans to achieve the 2050 net zero emission target. In this report, JUSTICE NWAFOR and NCHETACHI CHUKWUAJAH analysed allocated and released budget data of the Nigeria Atomic Energy Commission and Energy Commission of Nigeria and report how duplication of duties and inadequate funding duck Nigeria’s renewable energy drive.
NIGERIA is considered the 12th largest crude oil producer in the world and has the highest gas reserves in Africa. Despite the enormous deposits, the country still suffers from inadequate power generation and distribution.
Its major power sources are fossil fuels, hydro and gas which are considered harmful, given the amount of carbon dioxide emission generated through their usage. This is not without the recognition that more countries are moving away from fossil-based energy and investing in renewable energy and Nigeria can’t just stand and watch. Hence, the need to diversify Nigeria’s energy base to include a mix of cleaner, greener and renewable energy sources such as wind, solar, hydro-electric and nuclear with a view to eventually facing out fossil fuel sources.
Prior to the passage of the Petroleum Industry Bill and the eventual signing into law by President Muhammadu Buhari on August 16, 2021, there had been efforts by the Nigerian government to key into and transition to cleaner energy. Research institutions, agencies and commissions charged with the responsibilities of researching alternative energy sources had been set up. But sadly, they have not come up with clear outputs on alternative energy sources, according to an Oxford published report on the issue.
One of the reasons that can be attributed to the inefficiency is the duplication of energy-focused agencies with similar or overlapping functions and responsibilities. One such agency is the Nigeria Atomic Energy Commission (NAEC), established in 1976 with a mandate to develop and promote nuclear technology.
The government also went ahead to establish another agency in 1979, the Energy Commission of Nigeria (ECN) which has the mandate of coming up with alternative sources of energy. The ECN has fossil fuels, nuclear energy, solar energy and other departments under it. The nuclear energy department of the ECN is to perform the same function as the NAEC. This means the government has to split funds between these two and others, thereby weakening their productivity.
Since their establishment, both the NAEC and ECN have come up with policies, plans and strategies aimed at improving Nigeria’s energy situation. For instance, the NAEC founded two research centres, which are the Centre for Energy Research and Development (CERD) at Obafemi Awolowo University, Ile-Ife and the Centre for Energy Research and Training (CERT) at Ahmadu Bello University, Zaria, to achieve its mandate. A third research centre, the Nuclear Technology Centre (NTC), was inaugurated in 1988 at the Sheda Science and Technology Complex, Abuja. These centres are charged with the mandate of conducting research and building indigenous nuclear expertise.
From 2004, the NAEC, with support from the International Atomic Energy Agency, also developed a roadmap to ensure Nigeria achieves 1,000 megawatts of nuclear power by 2017 and 4,000 megawatts by 2027 through its National Programme for the Deployment of Nuclear Power for Generation of Electricity.
Annual budget and released amount for Energy Commission of Nigeria (2012-2018)
Source: Office of Accountant General of the Federation • Created by Justice Nwafor
In 2015, NAEC began plans with Russia’s Rosatom to design, construct and operate four nuclear power plants by 2035, with the first to begin operation by 2015. The commission also selected sites in Geragu, Kogi State and Itu in Akwa Ibom State for generating 2,400MW of power. The project was estimated to cost $20 billion.
Currently, these projections by the NAEC have not been actualised. A 2010 research paper written on the issue said that though the commission (NAEC) has made progress such as the ratification of international treaties, development of regulatory infrastructure and signing of bilateral technical cooperation agreements, some of the problems clogging the realisation of NAEC’s nuclear energy projection are “a substandard grid, underdeveloped electricity market, lack of technical capacity, widespread corruption and a dubious history of success in large, government-managed projects…”
In 2005, the ECN developed a Renewable Energy Master Plan (REMP), which contained formulated policies and suggested technologies to be deployed to achieve renewable energy goals in the country. The master plan had postulated reaching the energy demands of 90 per cent of Nigeria’s population, with 30 per cent of it being from renewable energy.
Also, through a partnership with USAID, private donors, government agencies, financial institutions and others, Nigeria, in 2018, completed the Renewable Energy Efficiency Partnership project to supply about 261,938 out of her over 200 million citizens with clean renewable energy. The project aims at reducing 4.5 million metric tonnes of carbon dioxide emission by generating 2.5 MW of power through off and on-grid sources.
Despite these postulations, projections and plans, Nigeria has yet to fully reach, harness or maximise its renewable energy goals. It seems to follow that the duplication of the functions of agencies or commissions charged with developing a blueprint for Nigeria’s renewable/nuclear energy transition, may have limited their efficiency and budgetary allocation, amidst poor releases of budgeted sums.
Budget data obtained and analysed by the Nigerian Tribune from the Office of Accountant General of the Federation show that from 2012 to 2018, the Federal Government budgeted N30.49 billion for the ECN but just a little above half (N16.27 billion) was released to the commission. On the other hand, N12.52 billion was budgeted to NAEC within the period but just N6.54 billion was released to the commission.
This has layers of implications. First, the commissions would be performing sub-optimally. This, in itself, has implications: human resources would be poorly utilised and laziness among the staff would be silently encouraged. Also, most plans of the commissions would not be implemented. Secondly, the world is embracing clean energy and funds are gradually moving towards that direction. Soon — even though fossil fuel advocates say not so soon — dirty energy would be edged out and Nigeria would start playing the catch-up game like it is currently playing in various sectors.
Interestingly, Nigeria has always supported the calls for climate change mitigation and net-zero emission targets. But its actions — like budgeting funds for important commissions such as the NAEC and ECN and not releasing a large part of the funds consistently, alongside many other unreported issues — betray its words.
Perhaps the poor funding is a symptom of a bigger problem — dwindling revenue and its attendant cash crunch. Actually, it is, says Prof. Adeola Adenikiju, professor of Energy Economics and Head, Department of Economics, University of Ibadan.
“The country has fiscal challenges’’, he says. “We are borrowing to even meet basic recurrent expenditure, we are struggling to meet our revenue goals that we may need to start servicing our debts. Over 40 per cent of the budget for this year will be borrowed.”
Further analyses show that the poor release of budgeted funds for the two commissions is chronic. For the NAEC, N2 billion (N2,000,000,000) was budgeted in 2012 but only N1.45 billion (N1,455,556,992) was released. The next year, N1.62 billion (N1,628,750,000) was budgeted but N902 million (N902,634,513) was released. In 2014, only N605 million (N605,247,262) was released out of the budgeted N1 billion (N1,090,826,820).
The year 2015 was the worst as N346 million (N346,481,047) was allocated but a little below half, N173 million (N173,240,524) was released to the commission. The next year, it improved a little to N350 million (N350,783,000) while the released amount improved to N225 million (N225,508,000).
The budgeted sum spiked to N3.45 billion (N3,452,707,889) in 2017 and the released sum to N1.72 billion (N1,726,353,945). The improvement continued in 2018 as the budget sum increased to N3.65 billion (N3,652,707,889) while the released sum decreased, compared to the previous year’s, to N1.5 billion (N1,461,083,156).
The analysis shows that in seven years (2012-2018), Nigeria’s government budgeted N12.52 billion (N12,522,256,645) to NAEC. But just a little above half, N6.54 billion (N6,549,624,392), was released to the commission.
In the case of the ECN, the same trend of poor releases was observed. In 2012, N14.6 billion (N14,564,302,376) was budgeted but N8.96 billion (N8,963,263,921) was released to the commission. The following year the budgeted sum fell dramatically to N4.48 billion (N4,487,327,394) and the released sum also was not impressive as less than half, N1.74 billion (1,745,790,507), was released. In 2014, the sad trend continued as just a little above half of the previous year’s sum, N2.74 billion (N2,744,435,333) was budgeted while less than half of the amount (N1,066,945,475) was released. The year 2015 was the worst too for the ECN as N155 million (N155,000,000) was budgeted but just N77 million (N77,500,000) was released.
The negative trend halted in 2016 as N2.90 billion (N2,901,386,102) was budgeted and N1.5 billion (N1,561,717,764) was released. The following year, the budgeted sum was reduced to N2.50 billion (N2,508,623,001) while the released amount was less than half at N1.32 billion (N1,322,311,501). In 2018, the sum budgeted for the commission was N3.13 billion (N3,130,750,616) while the released sum was N1.53 billion (N1,532,828,246).
This shows that for seven years (2012-2018) N30.49 billion (N30,491,824,822) was budgeted for the ECN but just a little above half, N16.27 billion (N16,270,357,414), was released to the commission. This is quite telling, a disturbing show of the poor commitment of the federal government to energy transition.
To reverse the urgly trend, Prof Adenikiju says the government must show sincerity and commitment to energy transition.
“The question is, do we appropriate sufficient resources to these agencies? If we don’t, then it means that they are not able to implement the policies on time, there will be delays and that will affect when Nigeria will be able to harness the benefits of nuclear energy…If we are not funding them well (energy agencies), why do we need to keep them and continue to spend resources on them?
“Nigeria must determine whether really they want to support nuclear energy, whether it is something we want to have in our energy mix and if the answer is yes, then the government should find a way of providing sufficient resources to make them meet the timelines that have been set”, Prof. Adenikiju says.
To meet Nigeria’s energy demands, energy mix is the way out, explains Prof. Adenikiju: “Studies have shown that the best way to meet our energy demand as a country is to utilise the various arrays of energy resources that are available to have an optimum energy mix and in that mix, we are going to have fossil fuel, we are going to have renewable energy, we are going to have nuclear energy and other types of energy.”