Sixty-four years after gaining independence, Nigeria has declined in nearly every single per capita economic measure. The effects of corruption, clean water scarcity, deforestation, lack of access to electricity, land degradation, human rights violations, and poor waste management have made many Nigerians wish they were still living in colonial times. In this article, I will explore the potential of ReFi solutions to address clean water scarcity, lack of electricity, and deforestation in lieu of effective government.

Web3 Regenerative Finance (ReFi) Explained

A practical explanation of this new approach to finance underpinned by blockchain, cryptocurrency, and smart contracts....

I've been obsessed with the idea of being rich since childhood. As a kid, I'd scout for means to make money to buy sweets for myself. During the summer holidays, an NGO set up a recycling company in my neighborhood. The company paid us 10 NGN (0.007 USD) to bring in 10 pieces of disposed plastic bottles. 10 NGN would get me one tom-tom, my favorite sweet, and I couldn't pass up that offer for anything. Every morning, I gathered bottles for the company and made a total of 200 NGN (0.14 USD), and my childish self spent it all on sweets.

At the time, I didn't know it but I was a beneficiary of a regenerative financial model. The company paid me for practicing effective waste management and contributing to environmental benefits, while it conserved money and raw materials by recycling plastic bottles rather than making new ones from scratch.

In Nigeria, problems begin and expand through a particular structure. When the problem is small, the government overlooks it. Seeing this, the masses immediately adapt and find ways to thrive in spite of it. The problem then grows so big that it can't be overlooked again, at which point the citizens struggle to adapt because, unlike at the early stages of the problem, the damage and cost to fix it are overwhelming. Only at this point is the government ready to look into the issue. Unfortunately, its approach to problem solving always fails.

It's common knowledge that the chances of solving a big problem are higher when it is broken into smaller modules. The government, with its motive to draw in funding from various organisations and avoid getting feedback from the people affected, will performatively try to tackle the problem as one giant issue. Once it has the funds in its possession, it leaves the problem for the next administration to fix.

At the time the recycling company came to my area, waste management was a serious problem. The amount of refuse strewn across the road was an eyesore and a health hazard. Both the state and local governments took the wrong approach towards the problem and their actions yielded nothing. This is where regenerative finance, aka ReFi, can play an important role. Through tools, technology, and incentives, they enable affected citizens to participate directly in solutions without waiting for government intervention.

In my case, the recycling company was so successful that it was hard to find waste in my area again. It showed me that with the right rewards, people will do the right thing. This got me thinking: if this model can work for plastic waste, can it work for the other problems plaguing Nigeria?

Understanding Nigeria’s addressable problems

There are three problems Nigerians have been battling for a long time now which ReFi can help address: clean water scarcity, lack of electricity access, and deforestation. The cumulative cost of these problems per annum is at least 29.2 billion USD: 1.2 billion USD on water scarcity and 28 billion USD on lack of electricity.

Clean water scarcity

The World Bank estimates that approximately 70 million Nigerians lack access to safe drinking water. It’s no surprise why. Existing water sources are often contaminated by industrial pollutants or human and animal waste, to the point that 70% of them are unpotable at the point of consumption. This means dangerous exposure to waterborne illnesses and other long-term health risks. Case in point, Nigeria has the world’s highest number of deaths from waterborne disease among children under five years old.

This widening supply gap has increased the cost of clean water, often beyond what the average citizen can reasonably afford. In Enugu state, for example, private entities sell a 25-litre gallon for at least 100 NGN (0.066 USD). Those earning below the minimum wage, such as cleaners with monthly salaries between 10,000 NGN (6.59 USD) and 15,000 NGN (9.89 USD), will spend about 15% of their salary on the absolute minimum level of need (16 litres/day). To put that in perspective, the average citizen in the United Kingdom consumes 10 times that.

Climate change and pollution are two of the major factors driving clean water scarcity. Drought, land degradation, and desertification cause the decline of water levels, while poor waste management practices and industrial activity contaminate the existing supply. In the Niger Delta region, the never-ending exploration for oil only furthers the problem. Compounding the issue, official statistics on water consumption are out of sync with reality. According to the government, the average Nigerian consumes 9 litres of water daily. However, in urban areas where 54% of Nigerians reside, a more realistic daily water consumption estimate is 16 litres.

Lack of electricity

According to the Energy Progress Report 2023, 86 million Nigerians still lack access to electricity. The inadequacy of the national power grid has forced citizens to use fuel-powered generators. These generators account for 75% of the electricity consumed in the country (25,000 megawatts compared with 5,000 from the national power grid), as per findings from the Society for Planet and Prosperity, GCA Capital Partners, and Climate Advisers.

Unfortunately, the use of generators comes with concerning risks. The fumes pose serious health risks such as death from carbon monoxide poisoning and long-term respiratory problems. Furthermore, they contribute to greenhouse gas emissions. According to Statista, the power sector as at 2022 was responsible for the emission of 11.8 million metric tons of CO2 equivalent. We can therefore assume that generators account for nearly 8 million of those metric tons.

The stark reality is that no matter the risks associated with fuel-powered generators, Nigerians will continue using them. Why?

For one, the power grid is unreliable. A BBC report stated that Nigeria's grid has a capacity of 12,500 megawatts but can only produce about 4000 megawatts in one day for 200 million people. That is the same amount of electricity Heathrow Airport in London consumes in one day. In 2023 alone, the power grid collapsed three times and has already had its first collapse in 2024. Maintenance and upgrades of the infrastructure are long overdue, yet nothing has been done. If the power grid remains in its current form, one day it will collapse forever.

Renewable energy resources are also unaffordable. In Africa, solar electric systems are the most popular for providing clean electricity. Unfortunately, the cost of setting them up is a hurdle the average Nigerian might never get past. Wavetra, a solar solutions provider, charges around 7 million NGN (~4690 USD) to set up a 10 kVA solar system that can power a small home. The average Nigerian, with a theoretical minimum wage of 30,000 NGN (21.76 USD), would need to save half their salary for 35 years to afford a system like this.


Nigeria has the highest deforestation rate in the world, with an estimated 3.7% of its forest lost every year, findings by showed. In 2022 alone, it lost 105,000 hectares of natural forest, equivalent to 69.7 million tonnes of CO₂ emissions. Much of this is the direct result of systemic poverty, an increasing population, and blatant corruption.

Poverty is the most significant of these three. According to the NBS, 63% of the Nigerian population (133 million) is multidimensionally poor. These people have no choice but to heavily depend on the forests for survival. Without viable economic alternatives, forest conservation becomes nearly impossible.

Secondly, with Nigeria’s population growing at an approximate rate of 2% per annum, the need for housing has exploded. Available land is already scarce, especially in urban centres such as Lagos, which means the government has no other choice but to clear forested land.

Finally, the culture of corruption perverts the incentive structure. Consider the difficult predicament of forest guards. They earn a paltry salary, despite being responsible for deterring and arresting illegal loggers and poachers. The temptation to accept bribes in exchange for turning a blind eye to illegal activity is therefore strong, which means the forests have no chance.

Addressing These Problems With ReFi

Regenerative finance is about creating a financial system that works together with the environment, not harming or using it up.

A practical way to look at ReFi is as a collection of decentralised solutions built on modern technologies such as blockchain, cryptocurrency, and artificial intelligence that allows individuals and communities to directly address their systemic issues without the need for government intervention. This includes solutions that provide access to financing, offer incentives for behavioral change, and create systems for recurring revenue that can then be managed by the community itself.

In the Nigerian context, the current complexity of ReFi solutions means that it’s unlikely that individuals or communities will be able to use them without the help of external actors, i.e., those who are not directly impacted by the problem. ReFi startups and NGOs are examples of such actors. They need to educate and guide impacted communities on how to benefit from ReFi solutions. ReFi startups, in particular, can also build integrated platforms tailored for Nigerians that can aggregate financing, incentives, and treasury management into a single decentralised service.

Clean water scarcity

Clean water scarcity still persists in Nigeria today because of the unwillingness of the government to provide the financial resources to solve it. Communities in search of a solution have no choice but to raise their own money to construct new water infrastructure. Unfortunately, this isn’t an option for most communities. Those with high levels of poverty simply don’t have the means to raise their own funds. Even if a community wanted to take out a loan, the banks would reject the application because the likelihood of repayment is low. This is where ReFi platforms can help.

ReFi solutions are designed to provide financing to grassroots initiatives in the form of low-interest loans and grants. Loans can be affordable because the water infrastructure can be considered a revenue-generating asset. With consumption and payments tracked on a blockchain, it is possible to set up automated loan repayments to further increase trust. Once the loan is repaid, the revenue can go directly to the community for things like reforestation, conservation, and education. Grant mechanisms, such as quadratic funding, are even more attractive and can garner funds from regenerative crypto-economic ecosystems such as Celo and Optimism.

Since communities lack the awareness of these solutions, an external actor—a ReFi startup or NGO—would need to play a key role in education and implementation. Likely the best approach would be to build a platform where a community can access financing, track consumption, and make payments—all in NGN. Keeping everything on one platform allows for repayment automation and lower borrowing costs. It also makes it replicable across communities. The remaining step, then, is putting in the work to educate communities about how to tangibly solve problems that the government is unable to and how to manage the revenue generated by the infrastructure.

Lack of electricity

Just like with water, electricity scarcity persists in Nigeria due to insufficient government funding. The most common solution, generators, are individual in scope and difficult to share; the best solution, solar, is too expensive for most. The challenge for both electricity access and the clean electricity transition, therefore, is finding ways to finance and incentivise the creation of community-owned solar infrastructure.

A ReFi-powered solution looks quite similar to that of water scarcity: financing through direct grants or low-interest loans collateralised by the future revenue potential of the solar infrastructure, consumption tracking and payment via blockchain, automated loan repayments, and a community-controlled treasury to manage profits. Unlike with water, however, there is the possibility of using this approach to iteratively build a large solar grid that can benefit an even larger area.

As an additional bonus, renewable energy credit (REC) schemes can generate even more money for the community-owned solar infrastructure. REC schemes reward the transfer of each megawatt of solar electricity to the national grid. At a price of 13 USD per REC, solar infrastructure generating a surplus of, for example, 1,000 megawatts a month could earn an additional 13,000 USD. Revenue generation avenues like this shift the focus from conventional energy to renewable energy, accelerating a reduction in GHG emissions while contributing to community prosperity.

We already have ReFi startups in Nigeria working towards this aim. M3tering, a ReFi protocol developed by Switch Electric, is incentivising providers to install solar infrastructure on rooftops through a platform that tracks electricity consumption and facilitates payments back to the provider. As of now, there is no financing piece nor is there an integrated REC scheme, but the result is stable access to clean electricity for consumers and sufficient profits for providers.


About two years ago, I spoke with a man clearing some forested land in my village to build a mall. I gave the man reasons as to why deforestation is wrong and harmful to our community. After listening to me, he asked me one simple question I couldn't provide an answer to: “Between the trees I'm cutting down and the mall I intend to build here, which will bring in revenue for the community?”

After much research, I discovered that the reason standing trees are considered economically worthless is because Nigerians are not familiar with the concept of carbon credits nor have access to the voluntary carbon market (VCM). Carbon credits are one of the only viable and renewable economic alternatives we have for preserving forests and planting new ones. According to Treeapp, 1 million trees absorb 26,000 tCO2 every year. A 6,000-hectare forest with 10 million trees will absorb 260,000 tCO2 per year, which equates to 260,000 carbon credits. At a price of 6 USD per credit, preserving the forest will generate about 1.5 million USD. Credit prices can be even higher for reforestation initiatives. The challenge, of course, is how to make this work for Nigeria.

ReFi solutions offer hope. It is now possible for landowners to measure and verify the annual impact of their preservation, then sell the issued carbon credits directly on the VCM without the fees associated with centralised issuers such as Verra. Reforestation initiatives can also secure loans against the value of future carbon credits issued as a means to get started, although this is likely to prove difficult in Nigeria due to inflation and perceived delivery risk.

Revenue from carbon credit sales can be used to employ members of the community, plant additional trees, and support other community initiatives. There are also the added benefits of increased biodiversity, cleaner air, flood mitigation, and shade. In my village, it would not be unreasonable to hope for the combined preservation and reforestation of about 1,000 hectares of land. Assuming 1,600 trees per hectare, we could generate 250,000 USD annually. That is a whole lot of money for our community.

One of the key challenges is convincing communities that such a scheme is even possible. A ReFi startup or NGO would first need to run a small-scale community pilot to demonstrate the potential of carbon credits. After about 12 months, the external actor would be ready to duplicate the pilot in other communities. The idea is that once the revenue starts flowing into the community, there will be a paradigm shift from “How much can I sell timber for?” to “How quickly can I expand the pace of reforestation to make more money?” This shift would curb the rate of deforestation faster because the community would make more money from untouched forest areas.


The problems of clean water scarcity, lack of electricity, and deforestation continue to plague Nigeria and prevent the country from reaching its potential. Unfortunately, the government has always made faux attempts at solving these problems with the sole intention of getting funds from international organisations, without considering the well-being and growth of Nigerians. As an alternative, ReFi is empowering communities to own their infrastructure and fix these problems without the government.

However, ReFi can only flourish in the country when affected citizens receive proper education about its approach, impact, and benefits. We need to see ReFi startups getting out to the villages and spreading the message. That said, we can’t forget that water and solar infrastructure costs more than what the average Nigerian community can afford. Borrowing is an answer, but that means an increased risk of default in a country with an extortionate private lending industry and its vicious debt collectors. The challenge for ReFi startups will be figuring out how to create and sustain the economic flywheels that facilitate loan repayment with revenue generated by the community-owned infrastructure. Nevertheless, when I remember how the recycling company ended poor waste management in my area, I'm certain that regardless of potential challenges, ReFi is the path towards a better and more resilient Nigeria.

The views expressed in this article are held by Mr. Morphy and do not necessarily reflect the editorial position of CARBON Copy.