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Dr Orji made the observation in Abuja during the launch the study report on ‘Assessing the role of tax incentives in Nigeria’s Fossil Fuel Industry and its implications for Energy Transition, Policy, Direction and the Path to a Sustainable Future’, initiated by Civil Society Legislative Advocacy Center (CISLAC).
“This report is and will be useful.
Nigeria, like many resource-dependent economies, stands at a delicate crossroads — between the urgent imperative to decarbonize and the economic necessity of sustaining revenues from fossil fuels that still account for the bulk of public financing. At NEITI, our ongoing national study on “The Impact of Energy Transition on Nigeria’s Oil-Dependent Economy” underscores this tension vividly.
“The final draft report of this study which we are currently reviewing as we speak has already alerted the nation that without a well-managed fiscal transition, Nigeria risks facing a dual challenge- declining hydrocarbon revenues and insufficient investment in cleaner energy alternatives. The preliminary findings so far point to the possible reality that the path to a low-carbon future must be fiscally smart, socially just, and economically inclusive.
“This is where your report today adds critical value. Tax incentives have historically been used to attract investment and stimulate growth.
“However, as NEITI’s own Policy Brief on Path Ways of Implementing Nigeria’s New Tax and Revenue Framework reveals, lack of transparency and strong multi-stakeholders oversight in the administration of these incentives of if allowed to happen may lead to significant revenue losses estimated at nearly ₦6 trillion annually.
“Many of these incentives, particularly in the fossil fuel sector, that no longer serve national development priorities in their current form require urgent removal wherever they exists in the search for the one trillion economy that the present administration is targeting. They often entrench a carbon-intensive economy and delay the fiscal reallocation needed to support renewable energy, green technology, and transition-ready jobs.
“NEITI therefore welcomes CISLAC’s focus on this issue, because aligning tax incentives with Nigeria’s energy transition goals is not just a fiscal reform imperative, a national priority but a climate justice necessity.
“Permit me to share three quick policy reflections from NEITI’s work: From NEITI stand point, transparency must guide energy transition. The real cost of tax incentives, subsidies, and exemptions should be disclosed, debated, and justified within a public finance framework that serves long-term sustainability, not short-term sectoral comfort.
“Fiscal reforms must be coherent. The new Tax and Revenue Reforms Act provides a strong legal basis for rationalising incentives, improving collection efficiency, and ensuring that what we give away in incentives delivers measurable public benefit.
“Energy transition must be just and inclusive. Communities, workers, and women whose livelihoods depend on extractives must not be left behind. A just transition must provide alternatives, retraining, and new economic pathways — supported by well-targeted fiscal and social policies.
“As Nigeria works to implement the EITI Standard, strengthen beneficial ownership transparency, and modernise its fiscal framework, partnerships with credible civil society groups like CISLAC are indispensable. Together, we can ensure that fiscal reforms and energy transition do not remain elite policy debate, but become instruments of equity, accountability, and national renewal.”
While applauding CISLAC and its partners on the outcomes of the research and for keeping the energy transition and tax justice discourse alive, Dr. Orji pledged NEITI’s readiness to collaborate in implementing the report’s recommendations especially on fiscal transparency, climate accountability, and data-driven oversight.
In his remarks, Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Comrade Auwal Musa Ibrahim Rafisanjani acknowledged that “Nigeria has rightly joined the rest of the world in committing to taking steps to reverse the devasting impacts of climate change.
“Beyond the global and regional commitments, Nigeria has taken several local measures in compliance to its commitment to contribute to addressing climate change and its impacts on the people, communities and the economy.
“Within the last decade, Nigeria has, among other efforts, established the Nigerian Council for Climate Change, the Energy Transition Office under the Presidency, while also developing and adopting Nigeria’s Energy Transition Plan as the guiding document to ensure the country’s transition to renewable energy and green economy.
“A simple political economy analysis of Nigeria’s energy and natural resource sector, as well as the sources of government revenue and the economy of the country, would give a clearer understanding to Nigeria’s Energy Transition Plan.
“While the plan to transition through gas is understandable in this context, the continued expansion of investments in oil does not indicate an actual intention to shrink the fossil fuel industry while we continue to give tax and other forms of incentives to the fossil fuel operation space.
“While incentives are recognised traditionally as tools to attract foreign direct investments and boost economic development, incentivising the fossil fuel industry on the one hand and pursuing a net-zero emission target as envisioned in the Energy Transition Plan on the other hand appears to be a contradiction of government strategy.
“Government’s fiscal regimes remain an essential mechanism for shaping and fast-tracking the country’s goal of net-zero emissions by 2060. There is the risk of entrenching fossil dependence for homes and businesses if fiscal regimes continue to provide incentives for the expansion of fossil fuel investments in the country.
“Among other things, this report has attempted to examine the role of tax incentives in Nigeria’s fossil fuel industry and their implications for the country’s energy transition, policy alignment, and sustainable development goals. By setting the global and national context, it shows how countries worldwide are scaling back fossil fuel subsidies in favor of renewable energy investments.
“Employing a desk review of legislative frameworks, fiscal instruments, and international policy literature, the report provides a detailed overview of Nigeria’s fossil fuel sector—its historical evolution, current production and investment patterns, and the array of government support mechanisms that sustain it.
“The report advocates for a recalibration of fiscal policy as a tool for promoting a just and inclusive energy transition. It outlines pathways for phasing out fossil fuel incentives, enhancing domestic resource mobilization, and building stronger institutions for tax expenditure reporting and accountability.
“It also emphasizes the importance of international cooperation, particularly in mobilizing climate finance and technical assistance for fossil fuel-dependent economies. As an advocacy tool for reduction of carbon dependence, the report offers a comprehensive set of policy recommendations, including short- and long-term fiscal reforms, increased transparency in tax incentive administration, support for renewable energy investments, and alignment of fiscal tools with Nigeria’s broader development and climate goals.
“It is our hope that this report contributes to the body of knowledge on decarbonization, reduction of fossil dependence and the just energy transition landscape in Nigeria. We hope that the policy recommendations serve as useful reference points in drawing up fiscal regimes as tools for accelerating renewable energy in a manner that ensures energy inclusion for all Nigerians.”
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