In many parts of the world – including my home country, Nigeria – social challenges can be a greater barrier to delivering the energy transition than the technical ones. The energy industry has historically been very good at managing complex engineering challenges, but we are still learning how best to manage the more human issues that can hold back our progress in crucial areas.
This was one of the major topics of conversation for the industry, when I was speaking at the Africa Oil Week in Cape Town, in October this year. What struck me was that although local circumstances may vary considerably from market to market, the abiding lesson is that it is very hard for a company to be successful if the communities around it do not share in that success.
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I have recently been through a transition myself – coming into the energy sector at an executive level after a career mostly spent in banking and consumer goods. This was eye-opening for me because my expectations were heavily influenced by my childhood in Port Harcourt in the Niger Delta, where my father was working for international oil companies. And my expectations were quite different to what I am seeing on the ground, working for a Nigerian energy business today.
From the industrial heartland of Africa’s largest oil producer, it is easy to understand the central role that oil has played in shaping modern Nigeria. Although it is declining in status – from providing over 80 per cent of the federal government’s revenue twenty years ago, to a little less than half today – it remains of critical importance to the economy, particularly in terms of foreign investment and exports.
However, oil has not been the driver of development that many had hoped for, over the past decades. Given the nature of the work involved, the industry was never going to create huge numbers of jobs, just tens of thousands of jobs in a country of over 200 million people. Far more seriously, it has not helped to close the gap fast enough on energy access, security and affordability for Nigerians. Over 75 million people still lack access to electricity, and earlier this year Petrol costs tripled, as the government withdrew subsidies.
When I was growing up in the 1990s, my perception of the international oil companies operating in the Niger Delta was that they were focused on taking as much of the value of our national resources as they could for themselves, while giving away not as much as expected back to local communities. Whether it was right or wrong, this perception is one of the major driving forces that has led to a very difficult operating environment. Theft, vandalism and sabotage remain endemic, with estimates that as much as a quarter of production could be getting siphoned.
This has been the cause of environmental issues such as oil spills and responsible for too many life-changing injuries and deaths related to the dangerous practice of illegal refining. Failing to share the benefits with local communities has led to lost revenues, and increased costs across a range of areas from security to financing. And it is not just fossil fuels that face these issues – solar panel thefts are becoming increasingly commonplace as well.
This is why when I was making the decision to take on my current role at Seplat Energy, I was pleasantly surprised to find that addressing these challenges head-on was at the heart of the company’s strategy. As a business based in Nigeria, our (Seplat Energy’s) long-term success is linked to a cordial relationship with the communities where we operate and the country as a whole.
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This is why we have made accelerating Nigeria’s energy transition our number one corporate priority. Oil export remains very important for the economy – the income it provides today will be essential for the longer-term investments needed to move beyond the fossil fuel era. But much more can and should be done to build up the domestic electricity market, making practical use of the large gas resources that are too often just flared, as well as our considerable potential for renewables.
Increasing access to electricity is critical for driving the development of the Nigerian economy. Reliable and affordable power is an essential precondition for investment in many sectors, from technology to manufacturing. It will also displace the imported diesel generators that are currently choking our homes and cities, and a major drain on the country’s foreign exchange through the imported fuel on which they run.
Furthermore, we need to encourage more Nigerians to cook with cleaner energy, not biomass, which is a major source of air pollution, avoidable health problems and unnecessary deaths, as well as driving deforestation and loss of biodiversity. We believe that a switch to LPG or, where possible, electricity, will cut pollution, improve health and most importantly, free rural women from the time-consuming burden of fetching firewood, so they can spend more time with their families and earn valuable income.
For us at Seplat Energy, our business is deeply rooted in a commitment to strong partnership with our host and impacted communities. From inception, we developed a robust community relations model that has guaranteed our freedom to operate and recognises our host and impacted communities as equal stakeholders in their economic and social development.
It is on this pedestal that, aside from building roads, powering hospitals, and providing communities with clean sources of water, we established other initiatives focused on Health, Education and Economic Empowerment. We implement these initiatives using direct intervention and communication with beneficiaries and ensuring that the initiatives contribute to the Sustainable Development Goals (SDGs), Africa Agenda 2063 Aspirations & Goals, as well as Nigeria’s National Development Plans.
For instance, in the last decade, our PEARLs Quiz competition has positively impacted almost 60,000 teachers and students from about 12,000 participating schools. We have also contributed directly to the education of students by awarding scholarships to winning secondary school students and contributed directly to improving the infrastructure of secondary schools by awarding prize money of over N100 million to the winning schools.
Under our National Undergraduate Scholarship which started in 2014, we have provided scholarships to 780 Federal and State University undergraduate students, 34% of whom are from our host communities.
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In the last 3 years, the SEPLAT Teachers Empowerment Programme (STEP) has provided 905 teachers and 87 Chief Inspectors of Education with digital teaching skills, leadership training and income diversification, and supported the learning of over 10,000 students in our host States with new teaching skills.
Furthermore, the Seplat Innovators Programme is creating STEAM Laboratories which are collaborative spaces where the study of science, technology, engineering, arts and mathematics can be integrated through hands-on experiences in a pure laboratory or combined classroom-laboratory setting. These laboratories with internet facilities teach students computational thinking and focus on the real-world applications of problem-solving. The programme was deployed for the first time in 2023 with two of such fully solar powered laboratories in Edo and Delta States.
On the health front, our Eye Can See Programme, which started in 2012 has screened about 100,000 persons for eye defects and provided nearly 50,000 reading glasses, and conducted well over 4,000 cataract surgeries for persons in our host communities. The programme is also designed to educate patients on lifestyle changes required to reduce the rates of hypertension and Diabetes.
Additionally, the Safe Motherhood Programme has contributed to reducing infant and maternal mortality rates in our host country by aiding about 25,000 safe births and contributed to reducing incidences of malaria and infant diseases by ensuring that over 30,000 mothers and infants were treated and vaccinated.
Under Seplat’s Access to Clean Energy Project, the company is ensuring secondary schools and hospitals in our states of operation have access to electricity using solar for critical needs such as school laboratories and hospital theatres. This project which commenced early this year has seen six secondary schools and three hospitals across Delta and Edo States benefitting.
By supporting basic education and teacher training, as well as investing in social entrepreneurship, we are creating opportunities for the next generation and nurturing the future talent that our business will need. Supporting our host communities is, therefore, both the right thing to do and enlightened self-interest. It will benefit not just Seplat, but the whole of Nigeria.
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Unless energy companies can focus on what society needs, opportunities will be limited. We believe that putting the people and communities at the heart of our strategy will firmly place us on the path to enduring success.
Afe is director of External Affairs & Social Performance, Seplat Energy
