This policy paper was developed following a collaborative process involving active practitioners in the Renewable Energy Sub-sector - in reaction to the newly imposed 10% import duty on solar components. It seeks to present a case for the protection of investments in this nascent sector and achieving sustainable and reliable access to electricity for the growth of the Nigerian economy and her people.
The 10% duties on solar components not only sabotages all the benefits of solar energy in Nigeria, but also reflects the continuous norm of policy inconsistency and a lack of commitment by successive Nigerian government to drive both monetary and fiscal policies in a coherent manner to deliver her desired economic development in the medium and long term. The imposition of 10% duties on solar components sends a very wrong signal to the global community on Nigeria's commitment to achieving universal electricity access as well as achieve its National Determined Contribution (NDC) under the United Nations Framework Convention on Climate Change (UNFCCC) and Sustainable Development Goals (SDGs).
With the international price of solar technologies dropping by over 50% in the last decade, Nigeria continues to deny her population the gains of solar technology, unlike other West African countries signed unto the ECOWAS Common Excise Tariff (CET). The current HS coding that determines tariff charge (CET) have induced the Federal Ministry of Finance through the Nigerian Customs to impose and enforce from a zero percent (0%) duty to 5% import duties and 5% VAT on imported solar components. This shocking increase, have crippled local renewable energy developers, escalated solar prices for existing underserved communities and diminished the progress of hundreds of solar energy projects – including those developed by the government through the Rural Electrification Agency (REA) and Private Sector Developers across Nigeria. This imposition also does not conform to the Policy Incentives contained in the Nigerian Renewable Energy Action Plan (NREAP) of 2017 and the Companies Income Tax Act (CITA) of 2017, as approved by the Federal Executive Council that recommends zero duties for renewable energy components in the short and medium term.
This policy paper therefore calls all decision makers:
To halt the newly imposed import duties;
Call the Tariff Technical Committee in the Federal Ministry of Finance to immediately consider a downward review of import duties on solar component;
Pass a legislative act to operationalise a Special Task Force on Renewable Energy and Energy Efficiency to be established in the Nigerian Customs Service to fast-track port clearance, implementation of zero duties for RE technologies within a targeted period of time, and ensuring quality standards of products to avoid waiver abuses.