By Emmanuel Oloniruha

A new research report has advised Nigeria to take decisive steps to diversify its economy as global demand for fossil fuels continues to decline.

The report, titled “Domestic Implications of Existing and Planned Oil and Gas Demand Reduction Strategies for Nigeria”, was authored by Dr Oluwasola Omoju.

Published on Tuesday by Climate Strategies and Salzburg Global, it warned that Nigeria faces urgent risks and untapped opportunities in the global energy transition.

Omoju said Nigeria’s heavy dependence on oil and gas revenues makes it highly vulnerable to global decarbonisation efforts.

He noted that in spite holding some of the world’s largest reserves, the country is already grappling with declining revenues, high production costs and limited refining capacity.

“As key export markets, including the EU, US and India, ramp up decarbonisation efforts, demand for Nigerian oil is projected to fall sharply.

“This poses risks for government budgets, foreign exchange earnings and employment, especially in oil-dependent regions, ”he said.

Backed by the Stanley Center for Peace and Security and the Windward Fund, the report also highlighted opportunities in agriculture, manufacturing, solid minerals and services.

According to Omoju, declining fossil fuel demand could catalyse long-overdue diversification into sectors with strong potential for job creation and inclusive growth.

“Nigeria’s natural gas, critical mineral deposits such as lithium, and growing renewable energy sector also offer short- to medium-term pathways for sustainable prosperity,” he said.

He stressed that seizing these opportunities would require decisive action, including shifting investments from costly oil exploration into high-growth sectors.

Other measures, he added, include expanding non-oil exports, implementing tax reforms, investing in renewable energy and reskilling oil workers.

Omoju also suggested leveraging natural gas and critical minerals as transition strategies while accelerating clean energy deployment.

“The transition could be an opportunity, not just a threat.

“Nigeria must act now to diversify its economy and ensure a just, inclusive energy future,” he added.

The research forms part of the Prosperity Post Fossil Fuel Policy Dialogue on Just Energy Transitions, a multi-year initiative to help fossil fuel-dependent economies manage the risks and opportunities of the shift away from oil and gas.

It also aims to build greater alignment on win–win opportunities that can deliver shared benefits during the transition.

NEWS AGENCY OF NIGERIA