Last year was one of optimism for environmentalists and sustainability practitioners all over the world. The mass acceptance of the Paris Agreement and the Sustainable Development Goals (SDGs) by national governments, investors and corporations alike finally showed that global and diverse parties were ready to work together to reduce the threat of climate change and promote sustainable development. Undoubtedly, the acceptance of the Paris Agreement by the United States and China (two of the biggest economies), both of whom had historically expressed reluctance towards any global agreement on climate change, contributed significantly to this air of optimism.
Amid this, Africa, and Nigeria in particular has not been left behind. Since 2016, and even more glaringly this year, Nigeria, the most populated nation in Africa, has been poised to take a leadership position in climate action and sustainable development. Interestingly, people have been motivated to think differently in light of the significant economic slowdown in the economy (although improvements are now being experienced) and to take into consideration the lessons learned from the (failed) implementation of the Millennium Development Goals.
In particular, five key things have happened in the past 18 months that show Nigeria is well on its way to becoming a climate action leader in its region.
1. Nigeria has ratified the Paris Agreement
Nigeria signed the accord in September and then ratified it in March. With the ratification, Nigeria has joined the more than 140 countries to be held accountable for their climate goals. Nigeria’s Intended Nationally Determined Contributions (PDF) (INDCs) declaration commits to reducing GHGs by 20 percent unconditionally and by 45 percent conditionally by 2030.
Nigeria’s approach to achieving its commitments also aligns very well with its topical energy issues — gas flaring (it is responsible for 10 percent of gas flaring in the world), standards for electric generators (which are ubiquitous in the country) and climate smart agriculture (up to 70 percent of Nigerians are involved in agriculture in some way).
The carefulness with which the Nigerian government researched and planned before ratification demonstrates its newfound commitment to the use of data to inform decisions on its climate goals and commitments. Given that data-driven decision making is not historical or even cultural in Nigeria, this process is especially commendable and shows real commitment to the agreement.
2. Nigeria is set to release Africa’s first green bonds in 2017
According to the World Bank, implementing low-carbon solutions in Nigeria will cost about $142 billion, but will provide a benefit of about $304 billion. To help fund low-carbon projects, Nigeria is issuing sub-Saharan Africa’s first Sovereign Green Bonds in 2017. The green bonds will be used to raise additional capital to fund “low emission” energy projects and facilitate implementation of the INDCs.
The Ministry of Environment has championed the bonds in collaboration with the Nigerian Stock Exchange. They, and other parties including the World Bank, the Climate Bonds Initiative and other private and public sector stakeholders, have formed the Nigeria Advisory Council on Green Bonds to launch the instrument. A Green Bond Capital Markets and Investors Conference was held in March to officially announce the $63 million bonds, expected to be issued in April.
With strong government commitment, unprecedented private sector support, growing public awareness and increasing investments in renewable energy, Nigeria is an economy to watch.
3. Banking industry sustainability regulations are firmly in place
It has become clear that the industry leading sustainable business practices in Nigeria is banking. This is in large part due to early advocacies by a leading national bank, Access Bank, and the willingness of the apex banking regulator, the Central Bank of Nigeria (CBN), to promote sustainable development principles in the industry.
The CBN issued the Nigerian Sustainable Banking Principles (NSBP), which all commercial, merchant, and development banks in the country are subject to, and that mandate that banks incorporate environmental and social principles in their own operations and in their activities with other parties (such as a prerequisite for issuing loans).
The banks are expected to report their activities to the CBN on an annual basis using a preapproved template. This regulation has increased the mindfulness of banks as well as created new sustainability roles within their organizations. Each bank is at varying stages of progress in adhering to the NSBP, but their adherence continues to improve.
4. A renewable energy association has been established
Nigeria has seen exponential growth in the rise of many small and medium enterprises (SMEs) focused on solar energy in the last three years. But for the first time in 2017, this fragmented marketplace of SMEs (many of which are startups) has come together to form the Renewable Energy Association of Nigeria (REAN).
REAN intends to be a strong voice to advocate favorable conditions for the growth of renewable energy in Nigeria. The time seems ripe for this given the significant new investments coming into the sector, such as a $300 million loan to the federal government to implement solar projects generating up to 1.15 gigawatts (GW) of electricity (significant considering that Nigeria currently generates only 4.5GW in a mixture of fossil and hydro).
5. Reform of federal and state environmental legislations
The federal ministry of environment recently approved a revised National Policy on Environment. The policy was first established in 1991 and has only been revised once in 1999. The revised policy, undertaken with much engagement around the 36 states and the federal capital, captures language around several “new” environmental concerns, particularly climate change, insecurity, coastal erosion and sustainable use of resources. This revision (along with other actions) shows renewed commitment by the government to created relevant and enabling legislation that backs up the work that needs to be done towards reduced environmental pollution and emissions.
Other signs show Nigeria is shaping up to take the lead in sustainability on the continent, such as the establishment of a private sector coalition (its first) for the implementation of the SDGs, Nigeria’s being represented on the seat of the Deputy Secretary-General of the United Nations, and the move by Lagos State (a metropolis with 21 million people) to sign a Smart Cities memorandum of understanding with the city of Dubai.
With strong government commitment, unprecedented private sector support, growing public awareness about environmental and sustainable development issues and increasing investments in renewable energy, Nigeria is an economy to watch as it achieves great strides in climate action towards becoming a leading example for the rest of sub-Saharan Africa.