Fifteen days ago the Federal Government announced that it had signed an agreement with a US renewable energy company operating in Africa, Sun Africa LLC, for the construction of 5,000 megawatts of solar generation for the country’s rural population. It said at least 376 communities had been designated to benefit from the project, which also includes 2,500 MWh of battery energy storage power plants.
Remembering that the president, Major General Muhammadu Buhari (ret.), bragged about the growth of the renewable energy industry as one of the achievements of his regime, one is tempted to wonder if this rural green energy project is not it will come too late. on day. He is about to step down, and the next government will most likely decide to throw the deal away.
Secondly, the agreement signed with the US company may end up stifling the growth of the renewable energy market in the country instead of boosting it. So until we see the details of how this project, which is projected to be implemented in phases across all six geopolitical zones, will empower local industry players, it could be assumed that it will be one of those import-driven bazaars in the that the government gives foreign businessmen a free hand to take advantage of our resources in the hope of obtaining handouts and donations.
Yet another way of looking at it is that this government is hastily trying to respond to the damaging multidimensional poverty on earth before bidding farewell to the nation in a couple of months. It will be recalled that late last year, the National Bureau of Statistics released the Multidimensional Poverty Index which showed that 63 percent of Nigerians are afflicted with multidimensional poverty. This represents 133 million Nigerians, who are plagued by poverty caused by lack of access to health, education and standard of living, along with unemployment and shocks. Undoubtedly, at the heart of all this is energy, because it is essential for health, education, standard of living, employment and social resilience in general.
The reality is that Nigeria has the largest energy access deficit in the world, based on 2021 global measurements. Then, according to 2020 research by Waheed Ashagitigbi, Bashirat Babatunde, Adebayo Ogunniyi, Kehinde Olagunju, and Abiodun Omotayo, titled ” Estimation and determinants of multidimensional energy poverty among households in Nigeria”, the results show that the national average multidimensional energy poverty index was 0.38. This suggests that most households are energy poor. Interestingly, according to the study, it has been found that energy poverty is higher in rural areas than in urban areas. The study concludes that, among other energy poverty reduction interventions, income smoothing should be prioritised, especially among rural households, to help them break out of the energy poverty trap.
Unfortunately, the problem of energy poverty in Nigeria has put many Nigerians, especially in rural areas, at high risk of relying on dangerous and polluting sources of lighting and cooking, such as kerosene lamps, candles and wood cooking. The situation has also exacerbated economic difficulties and the health crisis, thus perpetuating the cycle of poverty. In 2020, the Rural Electrification Agency estimated that almost 90 million Nigerians do not have access to the electricity grid and that millions of those connected to the grid have less than 12 hours of electricity a day.
It is important to understand the nexus between electricity and poverty, and then to locate this government’s renewable energy dream for rural Nigeria. If the foreign company dumps solar panels on the rural population, without incorporating micro-enterprises and appropriate local content components into the project, it will at best become a white elephant. Certainly, before the year is out, you can go back to rural sites and see corpses of non-green solar power components lying on the ground.
As for the renewable energy industry in general in Nigeria, the government has failed to provide the right environment and incentives to grow the industry and transform the enthusiasm of local green entrepreneurs for national benefit. The industry is reeling. There are many factors that militate against the green energy industry in Nigeria, but the main ones are government induced. Nigeria is Africa’s largest proven market for decentralized renewable energy, yet the market is struggling to find its footing mainly due to the various import duties and associated levies imposed on solar PV systems.
Remember that the regime had initially stated that it was removing tariffs on solar panels to catalyze the growth of the green energy industry. So initially solar panels were exempt from import duties and other levies, but the Buhari regime came in through the back door with the tariffs. They were applied separately to the other components that came with the panels, such as batteries, inverters, charge controllers, and associated DC appliances. To make matters worse, starting in 2018, solar panels, which were exempt from customs duties, joined the list, with an import duty of five percent and VAT of five percent. Now that the government has increased VAT to 7.5 percent, it will also reflect accordingly.
Regulators are having a field day fleecing local green entrepreneurs. For example, the Nigerian Customs Service has indiscriminately decided to use a classification code, 85013300, which is actually intended for DC generators with moving parts that are imported into the country, to impose very high import duties on solar components. . Instead of the normal classification code 85414000 for solar panels, which does not generate tariffs, customs chose to use the other one, thus imposing import duties of up to 10 percent on solar components.
While writing this article, I had a conversation with the immediate past president of the Nigerian Renewable Energy Association, Segun Adaju. He confirmed my fears about the 5,000 MW projects and their potential to impact the local green energy industry. It could become an import bazaar. But he also said that it would become a win for Nigeria if the foreign company establishes the solar panel manufacturing plant, in addition to the battery value chain, in the country; thus creating jobs for local people while transferring technology and knowledge to Nigerian industry players and green start-ups.
My opinion is that the government should go to the archives and look for models of rural renewable energy that include the empowerment of the rural population. This is the true paradigm for the eradication of energy poverty. One of them is the one I personally witnessed in Jigawa state in 2014 under the administration of Sule Lamido, in which closed premises for solar companies were installed and rented to local businessmen who used them as business centers while paying a monthly token to the government. for infrastructure maintenance. There were hairdressers, tailors, chemists (effectively serving as a village dispensary) and battery charging station operators, and other rural artisans occupying the shops and aggressively using green energy to transform the environmental socio-economic space, while creating a nightlife where none existed before.
In fact, in hindsight, anything can happen to the Federal Government’s 5000 MW green power project, the way the “Light Up Nigeria Initiative (Vision: Make Solar Power Available and Affordable to All Nigerians)” Goodluck’s Jonathan began to unravel immediately another political party swept him out of Aso Rock Villa. So what Buhari should be doing now is aggressive marketing to all presidential candidates to buy into his idea so whoever wins will stick with his newfound plans of empowering rural Nigeria with energy. green.