Despite Passing of PIA, NAEE Says Harnessing Country’s Energy Potential Remains Elusive

Emmanuel Addeh in Abuja

Despite the landmark passage of the Petroleum Industry Act (PIA) 2021, the Nigerian Association for Energy Economics (NAEE) yesterday argued that the country had not realised its full potential in the oil and gas sector.

NAEE President, Dr Hassan Mahmud, said this while speaking in Abuja at the 17th Annual International Conference of the NAEE, in collaboration with the International Association for Energy Economics (IAEE), USA.

Mahmud argued that there was evidence that weak institutions and poor governance had led to the inability of countries  to transform their  abundant human  capital and natural resources endowment  to positive economic and social outcome.

The NAEE is the Nigerian affiliate of the IAEE which has presence in over 120 countries around the world. It’s a non-profit organisation of corporate, private and public institutions, academics, policy analysts and policy makers, professionals, researchers and students.

These areas  include: theory, technology, engineering, legal framework, regulation, risks, geo-politics, energy mix and transition, environment and climate issues, as well as the governance of the energy solution ecosystem.

This year’s conference is, themed: “The Energy, Economy, and Environment Nexus: Imperative for Good Governance and Sustainable Development,” centering on exploring the effective linkage through three key corridors.

Mahmud argued that particularly for developing and emerging economies,  a key that determines the ability to transform abundant energy potential, both fossil fuel and economic growth and development, and improved standard of living citizens, is governance structure and institutional arrangements.

“Abundant evidences in the literature have established that weak institutions and poor governance have led to the inability of some countries  to transform their  abundant human  capital and natural resources endowment, to positive economic and social outcomes, including industrialization and political stability – the Resource- Curse Syndrome.

“In the of the direction of evolving good governance in energy development and uses in Nigeria, a major achievement was recorded in the establishment  of a robust and country- specific  legal instrument to facilitate the  transition and transformation.  

“The PIA  marks a significant milestone in addressing some major structural, institutional  and bureaucratic deficiencies in the energy sector. It prioritised the reforms to Nigeria’s energy sector, streamlining the regulatory framework, encouraging investment, and improving transparency.

“These reforms come at a critical time, as Nigeria seeks to diversify its energy mix, moving away from the heavy reliance on oil and gas to incorporate renewables energy sources, including solar, wind, and hydroelectric.

“ The PIA is meant to foster a more competitive and dynamic energy market, positioning Nigeria as a regional leader in energy development with particular emphasis on creating more local content and boosting indigenous capacity within the energy sector.

“Recognising the need to harness the capabilities of indigenous  professionals and firms towards ensuring that our energy sector remains globally competitive while fostering economic emancipation  and poverty-reducing growth.

“However, regardless of the innovative and comprehensive pillars of the PIA, evolving  a matching institutional and political arrangement  to facilitate the implementation of the legal instrument to fast-track the transition from Nigeria energy sector potential to inclusive and sustainable economic growth and development has remained, rather elusive,” the NAEE president stated.

At the two-day conference, he said the discussants would delve into some of these teething governance issues and institutional structures, as well as other relevant and related technical issues on the energy, economy and environment nexus.

 In his keynote speech, Chairman/CEO, Green Energy International Limited Prof. Anthony Adegbulugbe, said that many countries, especially in Africa and Asia, struggle to grow their economies, provide hope for their people, and break energy and economic poverty limitations.
Nevertheless, all around them, he said, the consequences of the advanced economies’ choices in energy use continue to be evident in global warming and the effects of climate change that have defied geographical locations.

He argued that the interconnectedness between energy systems, economic growth, and environmental sustainability had become increasingly evident.

According to him, Nigeria, Africa, and indeed the world face a critical juncture, where energy systems are evolving remarkably, shifting from fossil fuel dominance to renewable sources.

Stressing that this transition fundamentally reshapes economies and the environment, he explained that in this transformation, the question be how to  harness the energy-economy-environment nexus to foster good governance and achieve sustainable development?

“Environmental preservation is essential to long-term economic stability but requires carefully planned energy policies. This balancing act necessitates robust governance frameworks that ensure transparency, accountability, and effective resource management.

“ Energy is the backbone of economic development. In Africa, energy access is critical to unlocking the potential for industrialisation, innovation, and improved livelihoods. However, many across the continent, including Nigeria, remain energy-poor.

“ According to the 2022 Energy Access Report from the World Bank, Nigeria has one of the most significant energy deficits in the world. Also, as of 2021, 85 million individuals more than four out of 10 Nigerians, do not have access to power from the national grid,” he stated.

He said that Africa accounts for only 3 to 4 per cent of the world’s total gas emissions despite being home to 17 per cent of the world’s population.

By leveraging the continent’s abundant natural resources, African nations, he said, can bolster their economies, lift millions out of poverty, and create the necessary infrastructure to facilitate the adoption of renewable energy technologies in the future.