Oil-producing states in Nigeria have been urged to take urgent steps to reduce their debt burden and diversify into non-oil revenue sources as a strategy for fiscal resilience given the energy transition.
The call was made by participants at a two-day regional dialogue focused on strengthening subnational fiscal resilience in the Niger Delta which concluded on Friday 22nd November in Uyo, Akwa Ibom State.
The event, hosted by Policy Alert, in partnership with the Natural Resource Governance Institute (NRGI) and BudgIT Foundation, brought together government officials, civil society organisations, community leaders, and young people to discuss the challenges and opportunities presented by the global energy transition.
In a statement released after the event, the organisation noted that the event highlighted the fiscal vulnerability of states in the Niger Delta and also explored strategies for diversifying state economies, reducing public debt, strengthening fiscal transparency and accountability, and empowering civil society and youth to participate in decision-making processes to build resilience.
“Considering the shrinking fiscal wiggle room that the energy transition may initiate, states of the Niger Delta region must be cautious about piling on more debt,” said Edidiong Dickson, Lead, Energy Extractives and Climate Justice Programme at Policy Alert.
According to Tengi George-Ikoli, the Senior Program Officer, Natural Resource Governance Institute (NRGI), oil-producing states in the Niger Delta should respond to the global shift from fossil fuels and implement various initiatives targeted at stimulating economic growth and social development to build fiscal resilience.
The event featured two panel sessions with the themes, “The Energy Transition – Strengthening Government Response to the Global Energy Paradigm” and “Balancing Fiscal Resilience and Community Needs”. During the panel, government representatives from various states threw more light on state-level responses to the energy transition and plans in place to boost non-oil revenue.
Community representatives provided insights on the impact of fiscal risks of the transition on marginalised groups and fence-line communities. Insights from Akwa Ibom State, which served as the pilot for research on fiscal resilience, were also shared.
An audience discussion identified increased youth unemployment, illiteracy, poverty, poor health care, and youth exclusion in decision-making as fallouts of the transition particularly affecting young people in the Niger Delta region, noting that fiscal strategies
The dialogue also featured the launch of a handbook, “Strengthening Fiscal Resilience to Minimise the Impact of the Energy Transition,” and the formulation and adoption of recommendations for Niger Delta states to build fiscal resilience in the face of a changing energy landscape.