30 September 2010

Energy Access in Nigeria

Today's FT has a special report on Nigeria, and has a very interesting discussion of energy access:

Despite average cash injections of $2bn annually over recent years and large untapped gas reserves, electricity capacity remains at about 40 watts per capita, roughly enough to run one vacuum cleaner for every 25 inhabitants.

China manages 466 watts per person, Germany 1,468. South Africa, the continent’s economic powerhouse, generates 10 times as much electricity as Nigeria for a population one-third the size.

Officials calculate that the potential activity stymied by lack of electricity amounts to $130bn a year.

In the absence of a functioning grid, those who can afford it, spend about $13bn a year running the small generators whose rattle and sputter is the soundtrack of urban life. The poorest 40 per cent have no access to electricity.

Banks estimate that spending on power drives up their costs by 20 per cent, helping push interest rates well beyond what small businesses can afford.

Potential investors are hardly filled with confidence when the lights go out at ministries or – terrifyingly – airports.
The article has two very powerful quotes:
As Babatunde Fashola, Lagos state governor, said of the [Nigerian business conference] audience: “For them, electricity has become as important as oxygen.”
As if the audience needed reminding, the organisers added: “The cost of darkness is infinite.”

1 comment:

  1. Roger: I was in Nigeri, for about 10 years altogether.

    Oddly, things are much better the last time I was there, than the first time. The difference is that now we have the internet.

    Having had to use generators (gen sets) almost continously, I am well aware of the electrical problems there.

    Government regulation (and corruption) does not help. One example is that all gen sets must be wired up so that current flow is through the electrical meter. You end up paying NEPA (now PHC) for generating your own power when they can't!

    Not much incentive to fix the problem, when they are paid regardless.

    As for gas in Nigeria? Its known as an oil producer, but as one geologist I know described it, Nigeria is a natural gas province, with small pockets of oil. The potential is HUGE.

    The biggest problem though, is infrastructure. There is just no way to transmit electricity thorugh the grid they have. Just looking at a power pole, and the multiple amateur and illegal hookups are frightening to look at.

    The good news is that at least politically, Nigeria is much more stable, since the elections in 1998, and the transition to civilian rule in 1999.

    But, you would not know this reading the news. Only by comparing it to recent history, can this improvement be seen.