BY BAMIDELE FAMOOFO
Poor energy access has been identified as the fundamental reason why economic growth and development has been slow in Africa’s largest economy.
Nigeria occupies the least position in the ranking of top 20 countries in Sub-Saharan Africa for energy access, according to a statistics shared by Sahara Energy Group.
With 55 percent energy access, the most populous black nation in the World ranked behind smaller countries like Cameroun, Equatorial Guinea, Cote d’iVoire and Libya on the best energy access chart.
Energy experts at Sahara Energy Group said the challenge of energy access which has lingered for years in the country was triggered by an uncertain regulatory framework and market in its embryonic stages of development sequel to the privatization of the Generation and Distribution sectors.
Other factors identified as clogs in the wheel of the progress of energy access in the country as it especially pertains to Generation and Distribution of power are volatility in the foreign exchange market, service cost overrun due to the absence of cost-reflective tariffs and illiquidity of the sector.
Infrastructure deficit in the power sector, liquidity crisis of utility companies and funding gap for further investment in the sector are other problems that have bedeviled the power sector in Nigeria.
A noticeable impact of poor energy access on the economy is a sluggish growth in Gross Domestic Product (GDP) due to inability of Small and Medium Enterprises (SMEs) which are the engine room for growth in any economy.
“Energy access is fundamental to aiding the growth of SMEs, which are critical to the survival and growth of any serious economy. These SMEs stimulate the growth of industry for which energy is a critical driver. The growth of Industry naturally promotes development and urbanization and in tandem, infrastructural development and an improved GDP.”
Meanwhile, the fear was expressed that Africa’s energy generation deficit will rise to 200GW if the current power generation deficit trajectory continues with increasing energy demand. It is agreed that the declining cost and scalability of renewable energy technologies is a great opportunity for African countries to make significant progress in closing the energy access gap.
“However, due to the current cost of storage of renewable energy and affordability on the part of consumers for the energy solutions, we still require natural gas as a transition fuel for grid stability and base load energy in power generation and transmission.”
On the way forward for the sector, Sahara Group recommended that distribution and transmission capacity must be boosted to accommodate growth in generation output.
This includes decentralizing supply, through the establishment of mini grids and other decentralized power distribution solutions.
This is expected to fast track access to underserved communities whilst aiding rural electrification efforts.
“This is because a significant portion of the energy access gap exists in rural areas, where grid connection is lacking and may not be economical to
extend to.”
