Banjo: Economic impact of unreliable power supply in Nigeria estimated at $28bn
By Dele Ogbodo
The Minister of Innovation, Science and Technology, Chief Uche Nnaji, on Wednesday expressed Federal Government’s preparedness to partner the United Nations Industrial Development Organisation (UNIDO) through combined counterpart funding of $2.8 million to bankroll the implementation of Nigeria’s national Clean Technology, Innovation Entrepreneurship Ecosystem (CIEE).
Speaking at the launch of the programme in Abuja, the Minister admitted that Nigeria has begun a journey of transformative change, driven by the collective efforts of the Global Cleantech Innovation Programme towards sustainable industrialization.
According to him, the UNIDO-led initiative, which is sponsored by the Global Environment Facility (GEF), aims to bridge the gap between Cleantech Entrepreneurs and the market, often referred to as the “valley of death” by providing competitive, business acceleration services for innovative Cleantech Startups and SMEs.
The project, the Minister added seeks to foster an enabling environment for innovation and entrepreneurship.
He said: “We are proud that Nigeria is among the fifteen (15) countries implementing this impactful program.
“The launch of the CIIEE is a testament to our commitment to supporting emerging Small and Medium Enterprises (SMEs) offering innovative Cleantech solutions.”
He said government recognizes the critical role that startups and SMEs play economic development, enhancing renewable energy access, and contributing to broader climate change actions.
However, he added that these enterprises often face significant challenges in commercializing and scaling their solutions due to insufficient policy and regulatory support, limited financing opportunities, and a generally weak innovation ecosystem.
“The GCIP framework is structured around three pillars: transforming early-stage innovative cleantech solutions into scalable enterprises; strengthening and connecting the cleantech innovation and entrepreneurship ecosystem; and ensuring effective project coordination and coherence.
“Under the already completed Component 1, requiring the successful provision of technical assistance, adapting the GCIP guidebooks for Nigeria, and conducting three cycles of the GCIP Nigeria Accelerator, entrepreneurship experts were trained, certified, linked to enterprises and some financing opportunities provided.”
According to him, the focus on Component 2, led by his Ministry has received valuable support from UNIDO, adding, that the component aims to build, strengthen, and interconnect the institutional capacity of CIEE actors, including the National Board for Technology Incubation (NBTI).
“It involves developing policies, regulations, and recommendations, promoting linkages and collaborations across global CIEEs, and ensuring gender and youth mainstreaming.
“We have outlined several key activities for implementation under Component 2, including the inception and launch of the second component, Train-the-Trainer and Awareness Workshops within the Ministry, for ongoing Policy Localization efforts.
“We are also expanding the call for applications through the Ministry’s website to engage a broader range of Agencies and Inventors.
“The expected outcomes of our collective efforts include enhanced knowledge creation and exchange, capacity building, development of an innovation strategy framework aligned with Nigeria’s climate action, decarbonization pathways, and the establishment of a cleantech delivery framework. We also aim to foster a national forum to enhance networking and the exchange of lessons learned.” The Minister, said.
Continuing, he added: “I am particularly proud to share that, in 2023, under the second cycle of the GCIP Component 1, the Rural Electrification Agency (REA) and Co-Creation Hub (CcHub) implemented two cycles of Call for Applications, trained over 40 Startups, and supported the emergence of Seven (7) overall winners from the Accelerators Project.
“In June 2024, the top four National Awardees (of both genders), represented Nigeria at the global competition in Vienna, Austria, and secured two prestigious global awards: the Gender-Inclusive Business Award and the Climate Mitigation Potential Award.
“These achievements underscore the potentials and talents within our country and motivate us to continue supporting our Innovators, Inventors and Entrepreneurs.”
The Minister acknowledged the support of the President Bola Tinubu in the actualization of the programme.
In his remark, The National Programme Coordinator – Environment and Energy, UNIDO Regional Office in Nigeria, Mr. Oluyomi Banjo, acknowledged that Nigeria is a lower-middle-income country with a GDP of $472.64 billion and GDP per capita of $2,162 (World Bank, 2022).
According to him, Nigeria’s economy is heavily reliant on fossil fuels and petroleum represents a huge percentage of its total exports’ revenue, adding that despite the importance of energy to the country’s economy, low access to modern energy services remains one of the principal constraints to Nigeria’s economic development.
He said: “It is also important to note that Nigeria has one of the highest energy poverty rates in the world: about 47% of its population does not have access to grid electricity and those who do have access, face regular power cuts.
“The economic impact of unreliable grid operations is estimated to be around $28 billion. Lack of reliable access to electricity is also one of the major constraints to the private sector according to the 2020 Doing Business Report of World Bank.
“Therefore, improving power sector performance, particularly in the non-oil sector, will be crucial to foster economic growth.” Banjo, said.
According to him, Nigeria is particularly vulnerable to climate change, explaining that Nigeria is classified as one of the ten most vulnerable countries in the world, according to the 2017 Climate Change Vulnerability Index.
He added: “Nigeria’s contribution to global climate change is relatively small, though non-negligible. In 2018, an estimated 104.3 MtCO2 was emitted from fossil fuel combustion.
“However, on a per capita basis, Nigeria’s emissions are relatively low: about 0.5 tCO2/person/year (against an average EU of 6.1 tCO2/person/year). This low figure can be explained by the country’s over-reliance on traditional biomass and waste as the primary energy source:
“Nigeria is a member state of the United Nations Framework Convention on Climate Change (UNFCCC) and is under obligation to the global convention but more importantly to the safe and well-being of its people and its environment Nigeria with a population of over 200 million people is in dire need of innovations that are sustainable and environmentally friendly.
Over 50% of the country’s population are youths which confers demographic dividend for discovering new, modern and clean innovations across various sectors.
“There is a dire need for clean technologies in and from Nigeria. This does not just help Nigeria with its climate change and Paris Agreement obligations but also cements Nigeria’s status as an emerging economic and technological giant. Nigeria’s youthful population can be used as an advantage for driving a clean technology development and application in the country.”
According to the UNIDO Coordinator, the platform of GCIP will aggregate and enhance efforts to strengthen and connect the ecosystems of partner countries of Nigeria, Cambodia, Indonesia, Kazakhstan, Moldova, Morocco, South Africa, Turkey, Ukraine and Uruguay, and at the same time connect them to a truly global innovation ecosystem.
Over the long-term, he said the Cleantech programme seeks to build robust innovation ecosystems that can identify and systematically support high-impact cleantech technology innovations as well as attract large-scale investments. This mechanism is expected to deliver significant global impact on limiting global temperature rise to well below 2 degrees centigrade as well as generating local environmental benefits.
The GCIP, he added works directly with entrepreneurs by providing business training and facilitating connection with finance. It also looks at the overall cleantech innovation and entrepreneurship ecosystem (CIEE), contributing to create an environment in which cleantech enterprises can thrive. Presently, through Co-creation Hub, we have delivered two sets of accelerated cohorts SMEs which have gone ahead to win global awards at the global level at Vienna, Austria for two consecutive years. This shows that Nigeria has the capacity but needs a effective cleantech innovation ecosystem.
According to him, the Ministry has recognized that a resilient and effective innovative system which caters for all the diversities in the country requires the right conditions for innovation and entrepreneurship development where people have the motivation, resources, creativity and timing to absorb, generate and apply new ideas that have value.
Banjo, used this opportunity to thank the Ministry and the Ministry for committing the $2.8 million to further improving clean technology in Nigeria.
This is very commendable and shows that Nigeria is taking sustainable development seriously.
“I will like to use this opportunity to congratulate the Honourable Minister, Federal Ministry of Innovation, Science and Technology.
I wish to reaffirm UNIDO’s commitment to working with the Nigerian government and the Nigerian private sector towards achieving an Inclusive and Sustainable Industrial Development without compromising the quality of the environment.” He added.
