Powering Nigeria’s Future

We see several differences when comparing Nigeria and South Africa, the two largest economies in Africa. In terms of population, South Africa has 60 million people and Nigeria has 180 million people, but when we look at their energy grid and energy availability, South Africa produces about 40,000 megawatts compared to Nigeria’s 6,000. Only 60% of Nigeria’s 182 million population have access to electricity, and most of this power is generated by an aging and inefficient grid. The inefficiency results in substantial losses due to poor controls and monitoring technology, and outdated infrastructure. Investment in better energy technology will “help tackle the scourge of unemployment, poverty and inequality, creating an inclusive and prosperous Nigeria” (Siemens Nigeria CEO Onyeche Tifase). These lofty promises may not be true, but the average Nigerian only uses 3 percent of the energy that the average South African consumes, so if they manage to ramp up their energy infrastructure to generate 20,000 megawatts, they will meet the projected demand for commercial and residential use for the near future.


One new development to help Nigeria’s energy efficiency and capacity is Azura, the country’s first privately-financed independent power project (IPP). It uses the country’s reserves of natural gas, a cleaner alternative to coal, to address critical electricity needs. The International Finance Corporation (IFC) is working with the World Bank, the Multilateral Investment Guarantee Agency (MIGA), and dozens of other lenders to support the project, starting with a new 450-megawatt plant near Benin City. The two-phase project will generate about 3,000 megawatts of new power for the country, approximately 20% of Nigeria’s projected installed capacity by 2020.

Azura and other projects like it will become the norm in Nigeria and other highly populated, developing nations with sophisticated economies. We have seen a recent shift away from having just a few large, centralized power production facilities that generate power for the whole country. Instead, countries are turning to smaller sources generating electricity closer to those that need it to ensure a more reliable supply and better access. Access to electricity is key to sustained economic growth in countries like Nigeria, and cleaner, more efficient energy will power Nigeria’s future.



Nigerian Power

NGA Country Data

Powering Nigeria

Sufficient Power?

Chris Shelby and Cole Wheeler

This entry was posted in Uncategorized. Bookmark the permalink.

15 Responses to Powering Nigeria’s Future

  1. ferrise20 says:

    Nigeria’s energy use is shockingly low compared to South Africa, especially considering its population. If the average Nigerian has extremely limited access to energy and consumes only 3% of what the average South African consumes, I wonder how accurate that data is – for example, I know in some developing countries like Haiti, people often clip extra wires onto power lines in the streets and essentially steal electricity. (Although if that occurs, I would imagine it’s more prevalent in urban areas). Also, if these new IPP energy initiatives will be more efficient and cleaner than coal, will they be more environmentally sustainable as well? To what extent would the use of Nigeria’s own natural gas degrade its environment? Will rural areas of the country see a significant increase in access to electricity?

    • the prof says:

      Stealing electricity is pervasive, but that should probably be rephrased as: “Of the 6,000 megawatts generated, how much is paid for?” There are losses in transmission (up to 15%) but there are losses due to theft. The amount of power generated is pretty easy to monitor, where it goes is a different story!

      • inglism18 says:

        Is there a feasible scenario where electricity becomes so cheap to produce that it is free to all? Looking at the example of water, I suppose not. While water should be free to all, especially in places that have readily available clean water, the utility has been privatized and capitalized on. In the ideal world, electricity would be a right and not a privilege.

  2. lencionik19 says:

    Can Nigeria’s energy deficiency really be solved in this way? You said yourself in this post that the lofty promises made by Siemens Nigeria’s CEO may not be true. I believe private investment will certainly help Nigeria’s energy problems and their economy, but to think that it will be a cure-all seems too good to be true. Will this new power be spread out evenly among Nigerians, or will the 60% of people who currently use energy just consume more? Nationwide access to energy is key for sustained economic growth. Hopefully this plan is a good start to economic expansion in Nigeria.

    • inglism18 says:

      This goes back to the question of why does it matter if rural populations have access to electricity. While I agree that nationwide access to energy is key for sustained economic growth, as you claim, it will be difficult for the goal to be realized given financial constraints. One privately-financed project will like prove not enough, and publicly-financed projects are unrealistic. At least, there are world-based advisory organizations that are interested in aiding the public, so positive change should occur more quickly.

      In today’s world, is access to electricity a human right? Or does it remain a privilege? Something to think about…

    • willinghamt19 says:

      It seems like government corruption could play a key role in this as well. Additionally, it may be that additional power is supplied to mostly urban populations rather than rural populations. This would further disadvantage rural communities which already face worse relative economic outcomes.

      What kind of growth should Nigeria expect from increased energy infrastructure? It seems like it may be substantial. If so, then increased energy infrastructure in urban areas may still benefit rural communities through the positive indirect effects of growth.

  3. khanm18 says:

    So this definitely seems like a potential avenue of growth for this country. It is beyond me to see that even with the large difference in population, South Africa has a large use of electricity. I believe over the long term, Nigeria needs to focus on its energy infrastructure. If Nigeria is able to develop its energy infrastructure, it can sustain long term growth over the future.

    • inglism18 says:

      Surely a more energy efficient structure benefits not only the individuals but the energy grid on the whole. This may also weed out the thieves that are stealing electricity, creating a more stable market for electricity. But my question is – why should anyone have to pay for electricity in the first place?

  4. platerb18 says:

    Developing new infrastructure across many locations within the country seems like a capital-intensive project that Nigeria likely won’t be able to support on its own. The country is blessed with access to the largest natural gas reserves on the continent, so it has the ability to utilize those resources for energy development. Oil and gas account for large percentages of Nigeria’s exports, showing the need for infrastructure at home to utilize the resources the country has. I also think that the projected demands are likely not as accurate as they seem. Another thought as to why the numbers are so low at 3% compared to South Africa: no one is even capable of using energy in the first place due to access issues, while the demand may actually be much higher.

  5. nutiw18 says:

    Investment in electrical infrastructure certainly seems like a possible path of economic growth for Nigeria. Aside from the every day usages of electricity that will improve the well-being of millions, connection to electricity also allows for increased connectivity. By connecting to others around the globe, Nigeria will experience immeasurable benefits in terms of social capital, and human capital development.

  6. fleckj20 says:

    Electricity investment is a crucial component of economic growth. I have found it fascinating how electricity sales are also useful in tracking economic growth. In Jamaica, they use electricity sales to help measure economic growth in the informal economy, a large segment of developing economies. A large electric grid could help economists measure Nigerian growth and as a result help them to create policy measures that are better suited to the Nigerian economy.

  7. bryantc18 says:

    Over-reliance on centralized power generation seems like a major issue in developing countries. I would imagine that, given the poor infrastructure of rural areas as in Nigeria, it’s probably difficult to transmit power to rural communities. This shift to smaller sources of power generation reflects this concern–better access comes from localized generation that can more quickly and easily reach rural populations. Perhaps you could look into solar energy in Nigeria, as solar is a power source that can be installed anywhere, hence serving as a localized power source.

  8. the prof says:

    PPPs – public-private partnerships – are an earlier pattern, but even they work best if users are actually asked to pay for power. In some countries politics prevents private ownership.
    Note an interesting set of posts (for India) of locals paid to collect in their hometown. I will see whether I have a link – I don’t see it in the “news” list on this blog.
    Anyway, lots of ironies that in Nigeria’s decades of exporting oil it hasn’t been able to invest in its own domestic energy sector.

    • bryantc18 says:

      Is that a consequence of neglect on the part of politicians? The fuel is there, and I’m sure oil revenues could be used to fund electricity infrastructure in rural areas. One figure from The Economist suggests that 70% of government revenues come from oil, yet the industry still fails to deliver sufficient power generation. Up to 70% of the fuel Nigeria needs for domestic use is imported–shocking given the scale of oil production. Much of the oil disappears to waste, much of it to corruption–it is known that oil is ‘stolen’ and sold on the black market, taking away from government revenue and domestic use.

      What can be done? The National Nigerian Petrol Company is infamously corrupt and intransparent, and until politicians are no longer in the pockets of the oil industry, then efficient, adequate power generation will not be a reality. Infrastructure initiatives can be taken, but the problem seems to be systematic.

  9. Mac Zheng says:

    I think this is a good route Nigeria can take to escape the resource curse. I am curious to see where the majority of their funding is coming from for this endeavor and whether or not this is foreign or native government driven. Also curious to see how other countries embark on similar endeavors.

Comments are closed.