Nigeria is repositioning itself at the centre of Africa’s emerging carbon economy, with projections showing the country could earn up to $3 billion annually by 2030 from carbon trading following President Bola Ahmed Tinubu’s approval of a National Carbon Market Framework. The policy signals a decisive shift in Nigeria’s climate strategy—moving from climate vulnerability and aid dependence to structured participation in global emissions markets.
For years, Nigeria watched from the sidelines as other developing economies monetised carbon credits under global climate mechanisms. Despite having one of the world’s highest gas-flaring rates, vast forest resources, extensive agricultural land and a rapidly industrialising economy, the absence of a coherent national framework limited Nigeria’s ability to attract carbon finance. Fragmented regulations, weak verification systems and policy uncertainty kept investors cautious.
That landscape is now changing.
The newly approved framework establishes the legal and institutional foundation for measuring, certifying, trading and tracking carbon credits across key sectors, including energy, agriculture, forestry, waste management and manufacturing. Government sources say the initiative is designed to integrate climate action into Nigeria’s broader economic diversification drive, while also boosting foreign exchange inflows and creating green jobs.
Turning Emissions Into Economic Assets
Economists say Nigeria’s carbon market potential lies in converting long-standing environmental liabilities into tradable economic assets. Reduced gas flaring, renewable energy deployment, clean cooking solutions, climate-smart agriculture, forest conservation and waste-to-energy projects are all expected to feed into the carbon credit pipeline.
According to Celestine Ukpong, an economist, the framework represents a strategic economic intervention rather than just an environmental policy.
“Nigeria has historically paid a high economic price for environmental degradation, particularly gas flaring and deforestation. What the carbon market framework does is to assign value to emissions reduction. If well managed, carbon trading can become a steady non-oil revenue stream that also strengthens foreign exchange earnings,” Ukpong said.
He noted that the $3 billion annual revenue target is achievable, but only if Nigeria builds credibility in project verification and avoids regulatory inconsistencies that have undermined past reform efforts.
“Investors in carbon markets are extremely sensitive to transparency and governance. Nigeria must ensure that its carbon credits meet global integrity standards, otherwise the market will struggle to attract premium buyers,” he added.
Private Sector Confidence and Financial Discipline
From a financial and accounting perspective, experts argue that strong governance and fiscal discipline will determine whether carbon trading evolves into a sustainable market or remains a policy headline.
Peter Adebayo, FCA, said the framework could unlock significant value for both the public and private sectors if properly structured.
“Carbon credits are financial instruments. Without clear accounting standards, revenue-sharing formulas and disclosure requirements, the market could face credibility challenges. However, if these issues are addressed early, carbon trading can deepen Nigeria’s financial markets and attract long-term climate finance,” Adebayo explained.
He added that states, host communities and project developers must have clearly defined benefit-sharing mechanisms to avoid disputes that could discourage investors.
“Transparency in how revenues are earned, reported and distributed will be critical. Carbon trading has the potential to support subnational governments and communities, but only if the rules are clear and consistently applied,” he said.
A Shift From Oil Dependence to Climate Finance
Policy analysts see the carbon market framework as aligning with the Tinubu administration’s wider economic reforms, including efforts to stabilise public finances, attract foreign investment and reduce reliance on crude oil revenues. As global energy transition accelerates, carbon trading offers Nigeria a way to monetise climate action while remaining relevant in a decarbonising world.
Beyond revenue, officials say the framework could stimulate job creation in renewable energy, environmental monitoring, data management and project development, while also supporting Nigeria’s commitments under international climate agreements.
Still, experts caution that implementation will be decisive. Building institutional capacity, ensuring inter-agency coordination and protecting community interests will determine whether Nigeria can compete with more mature carbon markets in Asia and Latin America.
Looking Ahead
As global demand for high-quality carbon credits grows, Nigeria’s entry into the market marks a pivotal moment. The country now faces the challenge of translating policy ambition into bankable projects, credible data and investor trust.
If successful, carbon trading could emerge as one of Nigeria’s most important non-oil revenue sources by the end of the decade—proving that climate action and economic growth need not be mutually exclusive
Nigeria targets up to $3bn annual revenue from carbon trading by 2030 after President Bola Tinubu approved a national carbon market framework. Experts assess the economic and financial implications.
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