EFFECT OF GOVERNMENT POLICY FRAMEWORKS ON THE DIVERSIFICATION FROM CRUDE OIL TO ALTERNATIVE ENERGY IN NIGERIA

Abstract

Nigeria’s dependence on crude oil revenues has made its economy highly vulnerable to global oil price fluctuations and environmental concerns. To address this, the government has introduced several policy frameworks aimed at diversifying into alternative energy sources. This study examined the effect of government policy frameworks on Nigeria’s diversification efforts from crude oil to alternative energy. A descriptive survey design was adopted, and data were analyzed using simple regression analysis to test five hypotheses. The findings revealed that the Energy Transition Plan (ETP), Petroleum Industry Act (PIA) 2021, Electricity Act 2023, and the National Renewable Energy and Energy Efficiency Policy (NREEEP) alongside NERC Mini-Grid Regulations significantly influenced investment in alternative energy, promotion of natural gas, renewable energy generation, and rural electrification. Conversely, challenges hindering policy frameworks did not significantly constrain diversification efforts. The results underscore the importance of policy frameworks in driving Nigeria’s energy transition, though their impact remains modest, suggesting the need for complementary measures. The study concludes that while government policies are critical to achieving energy diversification, their success depends on effective implementation, adequate financing, technological innovation, and private sector participation. It is recommended that government strengthen enforcement mechanisms, expand renewable energy financing, scale up rural electrification, encourage innovation, and improve public awareness to ensure sustainable energy diversification in Nigeria.