IW Urges Nigeria to Diversify Economy Amid Falling Fossil Fuel Demand
A new report by the Institut der deutschen Wirtschaft (IW) urges Nigeria to diversify its economy in response to falling global demand for fossil fuels. The study, 'Domestic Implications of Existing and Planned Oil and Gas Demand Reduction Strategies for Nigeria', authored by Dr Oluwasola Omoju, highlights the risks and opportunities for the nation.
Nigeria's heavy reliance on oil and gas revenues leaves it vulnerable to decarbonisation efforts worldwide. Declining fossil fuel demand threatens government budgets, foreign exchange earnings, and jobs in oil-dependent regions. However, the transition could also present an opportunity for a just and inclusive energy future.
The report suggests leveraging natural gas and critical minerals as transition strategies while rapidly deploying clean energy. Expanding non-oil exports, implementing tax reforms, investing in renewable energy, and reskilling oil workers are also recommended. Nigeria's natural gas and critical mineral deposits offer short- to medium-term pathways for sustainable prosperity.
The IW report underscores the necessity for Nigeria to shift investments from costly oil exploration into high-growth sectors such as agriculture, manufacturing, solid minerals, and services. By doing so, Nigeria can mitigate the risks associated with declining fossil fuel demand and seize the opportunities for a more diversified and resilient economy.
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