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Nigeria is the second-worst country in terms of electricity supply out of 137 countries ranked by the Spectator Index. It is second only to war-torn Yemen, and its national grid capacity stands at just 4,000 MW.
The West African country, which is the continent’s largest oil exporter, is notorious for its electricity problems. According to some authors, these problems go back decades, from the times when electricity supply was the responsibility of a state-owned company; problems persisted even after the privatization of the sector.
Blackouts are a common occurrence in Nigeria; nonetheless, electricity bills continue to grow. Access to electricity is available to just a minority of the population, and most of it is for just a few hours a day. Disgruntled consumers refuse to pay the bills, so disconnections are also a frequent occurrence in Nigeria. That’s not good at all for Africa’s largest economy by GDP and the world’s seventh largest country in terms of population, at more than 170 million.
There have been ambitious plans through the years since the reform that led to the breakup of the state electricity company into a dozen generation, transmission, and distribution companies. They have not materialized, however.
At the start of this year, the country’s grid collapsed not once but twice within 16 hours, sinking areas of Nigeria into complete darkness. The juice lost from the collapses amounted to 3,000 MW.
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It’s a complex situation: out of the total population of the country, there are only 7 million households that are official clients of the eleven private power distribution companies, according to the Minister of Power, Works, and Housing, Babatunde Fashola. The actual users of the electricity are bound to be a lot more, but metering use appears to be challenging for the distributors, hence the constantly rising utility bills.
That’s just the household consumption problem. But Nigeria also has ambitions to industrialize its economy. This can’t happen if factories have to rely on their private generators as this would substantially increase the prices of their products and compromise their competitiveness.
The power trouble of Nigeria is actually a part of a bigger problem with infrastructure in general. This problem needs urgent addressing while oil prices are high, and Abuja is raking in more from exports.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.