The Global Energy Transition and Nigeria’s Strategic Imperative
Nigeria, a nation rich in oil and gas resources, faces a critical juncture in its energy future. If the country fails to strategically monetise its energy reserves, it risks being left behind in the ongoing global energy transition. This concern was raised by Prof. Adeola Adenikinju, former President of the Nigerian Economic Society, during his keynote address at the 18th NAEE/International Association for Energy Economics (IAEE) Annual International Conference held in Abuja.
Adenikinju highlighted the complexity and volatility of the global energy landscape, shaped by factors such as wars, artificial intelligence, and shifting geopolitical alliances. He emphasized that the energy market today is influenced by multiple interlinked factors, including rising geopolitical tensions, the exponential growth of data centers supporting AI, and the slow pace of energy efficiency improvements.
The IAEE/NAEE conference, now in its 18th edition, brings together top policymakers, academics, and energy executives to discuss emerging issues in the global and African energy landscape. This year’s theme, “Emerging Geopolitics of Energy: Navigating Global Shifts and Impact on Emerging Countries,” focused on the intersection of global politics, climate policies, and the future of developing economies.
Nigeria’s Energy Paradox
Adenikinju painted a stark picture of Nigeria, an oil-rich nation grappling with energy poverty. Despite being among the top producers of oil and gas globally, over 87 million Nigerians lack access to electricity. Additionally, Nigeria, the largest exporter of crude oil in Africa, is also the biggest importer of refined petroleum products—a paradox he described as unacceptable.
He warned that as the world transitions to a low-carbon economy, Nigeria’s hydrocarbons could become stranded assets if the country does not act decisively. Adenikinju urged Nigeria to aggressively exploit its oil and natural gas reserves while simultaneously scaling up investments in renewable energy sources such as solar, hydro, and wind power.
Geopolitical Shifts and Energy Volatility
The war in Ukraine and the “weaponisation of energy” have disrupted decades of energy interdependence between Europe and Russia, leading to record prices for liquefied natural gas and crude oil. Before 2022, the EU relied on Russia for about 40% of its natural gas imports. However, this has drastically changed as countries scramble for alternative supplies.
Adenikinju noted that these shifts have revived the age-old question of energy security. While the transition to cleaner energy is necessary, it has introduced new forms of volatility. Policies like the EU Green Deal and the U.S. Inflation Reduction Act are reshaping global supply chains for critical minerals such as lithium, cobalt, and copper.
Strategic Competition and Energy Security
The strategic competition between the United States and China over technological dominance in renewable energy and battery storage has emerged as a new front in the geopolitics of energy. China currently controls over 80% of global solar panel manufacturing and critical mineral processing, forcing countries, especially developing ones, to make tough choices about who to align with.
Citing the latest International Energy Agency data, Adenikinju pointed out that global economic uncertainty has become a key driver of energy instability, influencing oil prices, financing costs, and investment flows. The IMF’s July 2025 World Economic Outlook described the global outlook as one of “tenuous resilience amid persistent uncertainty.” This uncertainty fuels volatility in oil and gas markets, deterring long-term investments, especially in developing countries.
Africa’s Role in the Energy Transition
Adenikinju urged African countries to move beyond exporting raw materials for clean energy technologies. He emphasized the need for Africa to develop its own value chains, attract green capital, and participate in technology development. Countries like Kenya, Vietnam, and India serve as models of how emerging economies can attract clean energy investment through regulatory reforms and targeted incentives.
He highlighted the Petroleum Industry Act, increased rig activity, and rising private sector participation as promising indicators. However, he urged policymakers to move faster to strengthen infrastructure, financing frameworks, and investor confidence.
Regional Cooperation and Policy Reforms
Energy security is back on the national agenda, and the challenge for Nigeria is to balance profitability with sustainability while positioning itself as a credible player in the new global energy order. Adenikinju called for regional cooperation through the African Union, emphasizing the need for the continent to protect its critical minerals and build shared capacity to compete in a carbon-neutral world.
He also stressed the importance of identifying vulnerable groups and ensuring their protection, as the market will not do that on its own.
Recommendations for Sustainable Growth
Offering recommendations, Adenikinju called on the government to ensure that all Nigerians have access to affordable electricity through solar energy deployment. He also urged the removal of barriers to domestic gas access to enhance the distribution and use of Liquefied Petroleum Gas.
Professor Edmund Lewis, President of the International Association for Energy Economics, praised Nigeria for its leading role in advancing energy scholarship and policy dialogue in Africa. He urged developing nations to adopt a pragmatic approach to energy transition that aligns with their growth realities.
Speaking on behalf of the global body, Prof. Wunmi Iledare emphasized that Africa’s energy future must not imitate Europe’s historical pathway but evolve through a model of “pragmatic prosperity” driven by data, inclusiveness, and policy dialogue.
Balancing Fossil Fuels and Renewables
Meanwhile, the Secretary General of the African Petroleum Producers Association, Omar Faruk, noted that the International Energy Agency has admitted that fossil fuels cannot be easily phased out. This acknowledgment reinforces APPO’s long-held position that, while energy transition is important, Africa’s unique realities require a balanced approach that does not undermine the role of fossil fuels in the continent’s development.
Faruk added that Africa must understand the economic implications of the global energy transition. He emphasized the need to master existing technologies before moving towards a new system.
