Discussion Papers

July 7, 2017

Climate Policy And Finance

pricing has been recognized not only as the most efficient economic policy
instruments to internalize the social cost of emissions, but also as a major
tool to generate public revenues that can be used to offset the potential
adverse distributional effects of climate policy. However, in many developing
countries, there is a widespread reluctance to commit to climate policy,
largely due to financial constraints, a lack of public support, and concern over
its regressive effects.This paper makes recommendations
towards the design of an effective carbon pricing
system that not only discourages air pollution but also encourages the gradual
uptake of climate-friendly technologies by the private sector in Nigerias oil
and gas sector, while supporting public investment in sustainable
infrastructures and projects that offset the distributional effect of the
climate policy.

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Nigeria Economic Update (Issue 12)

The naira/dollar exchange rate remained largely stable at the parallel market at ?320/$ during the period7, albeit slight fluctuations on February 29, 2016 (?325/$) and March 2, 2016 (?328/$). The decline in the hoarding of foreign currency as well as the substantial reduction in the speculative demand for dollars were the two key factors responsible for the ease of fluctuations in the forex market8. With the slight increase in the price of crude oil, Nigerias foreign reserve slightly grew by $56 million, from 27.81 billion to $27.84 billion9. With the continued increase in the price of crude oil, a modest build-up of foreign reserve to guard against unfavourable commodity price movements is expected in the near term.

Nigeria Economic Update (Issue 14)

Recently released report by the National Bureau of Statistics indicates decline in output and contribution to GDP in the Nigeria aviation sub-sector. In real terms, output in the sub-sector decreased annually by 4.9 percent between 2015 and 2016; and declined by 13.3 percent (Year-on-Year) in 2016Q4 the largest quarterly decline in 2016. The sectoral fall in output was supply-side driven: increased cost of operations prompted cut-back on services provided by the sector as well as termination of some aviation operations. Going forward, recent improvement in forex supply in the interbank and BDC channel would enhance forex access to airline operators and facilitate smooth running of the airline industry.

Nigeria Economic Update (Issue 26)

Power sector statistics indicates a huge decline in power generated in the week under review (June 23, 2017 to June 30, 2017). Power generated, attained a peak of 4,305 MW on June 23, 2017 but fell significantly by 33.1 percent to approximately average of 3,000 MW as at June 30, 2017. The huge decline is attributable to continued poor payment and inability of most GENCOs to pay for gas supply and a system collapse. Consequently, power sector lost huge prospective funds; and daily power supply reduced to 4.5 hours per day7. Going forward, improvement in energy supply is critical to domestic production, job creation, and diversification agenda of the government.

Infrastructure Financing In Nigeria:

Similar to most sub-Saharan African (SSA) countries, Nigeria has a huge infrastructure deficit which considerably limits efforts towards achieving inclusive growth, sustainable development, and poverty reduction. With infrastructure stock estimated at 20-25 per cent of Gross Domestic Product (GDP), Nigerias infrastructure stock is still significantly lower than the recommended international benchmark of 70 per cent of GDP. The 2014 National Integrated Infrastructure Master Plan (NIMP) estimates that a total of US$ 3 trillion of investments, or US$100 billion annually, is required over the next 30 years to bridge Nigerias infrastructure gap. In particular, the Plan estimates that Nigeria will have to spend an annual average of US$ 33 billion infrastructure investments for the period 2014 -2018. This means that Nigeria will have to more than double its spending on infrastructure from the current 2-3 per cent of GDP to around 7 per cent to make appreciable progress in infrastructure development over the next three decades.