Says renewable energy vital to Africa’s socio-economic development
From: Kazeem Biriowo, Abuja
Godwin Uyi, the Executive Director, Environmental Rights Action, Friend of the Earth Nigeria, (ERA/FoEN), Friday said access to clean energy services remain enormous challenge facing the African continent.
He disclosed this in Abuja at a briefing on Tax Reduction on Renewable Energy in Nigeria, adding that energy is fundamental for socio-economic development and poverty eradication.
“Although tax regime may help African Governments to rake in some revenue from import tariffs, it is clear that it is also contributing to the slow pace of renewable energy development and access for all,” says Uyi.
“Import tariffs increases tax burden in way that lead to high transaction cost that are often passed on to consumers seeking renewable energy transition”.
Uyi further expressed concern about the situation of the country’s energy supplies. He added that about 60 to 70% of Nigeria’s 200 million population lack access to electricity.
He said on a global scale, most countries derive national revenue from tax regimes on import and export of goods services but that is not the case in in Africa as tax burdens impose obstacles to the promotion of renewable energy for the people.
Uyi also noted that to avoid Nigeria being dumping ground due to zero tax, the federal government should encourage state and non-state actors to be involved in the production and supply of renewable energy technologies and products.
Citing examples from other climes, Uyi revealed that countries like Norway, India and Kenya have successfully used their friendly tax regime to encourage a transition to renewable energy
“In Norway, there’s an imposition of tax on CO2 emissions and 25% national government grant for private solar installations which balances out their 25% value added tax”. He added.
He further stressed that both Indian and Kenyan governments provides 10 years Tax Holiday to renewable energy businesses.
“Kenya has removed duty on LED lights since 2010 and has put in place a mandatory regulation for the provision of solar system water heating for all buildings”. He explained.
Uyi, however, highlighted some of the opportunities linked to reduce tax burdens and a strong commitment to energy transition from fossil fuels to renewable energy sources in line with the 2015 Paris Agreement.