Power & Water Nigeria
Exhibition & Conference

In 2020, Sub-Sahara Africa started construction work on projects with a combined value of $45 billion that received funding.

In 2019, the African Development Bank (AfDB) financed the most projects in Sub-Sahara Africa, with 13 per cent of projects that received finance. The AfDB’s volume of the projects funded in 2020 reduced to 10 per cent based on the number of deals. When looking at the data by value, the Export-Import Bank of China had the largest market share at 15 per cent.

In 2020, Kenya and Nigeria were the beneficiaries of the most number of projects financed. However, when slicing the data by value, Mozambique, South Africa and Nigeria led Sub-Sahara Africa as recipients of the largest slice of the pie for projects funded and construction started in 2020.

The Real Estate industry leads Sub-Sahara Africa with both the largest market share by value and number of projects funded at 35 per cent and 42 per cent, respectively. However, it is worth noting that the Oil and Gas sector had 25 per cent of the projects that reached financial close but accounted for only 4 per cent when looking at the number of oil and gas projects funded during 2020. The transport sector was in third place with 15 per cent of the market share of project funding by value, and second place by the number of projects funded with 23 per cent.

Credits: https://www.abiq.io/

Nigeria is the most populous country in Africa and the largest GDP. Yet, more people live below the poverty line, 83 million, than the total population in any other African country, except for Egypt, Ethiopia and the DRC

Nigeria is a middle-income country, Africa’s largest oil exporter and biggest economy. It has a population estimated at 208 million (World Bank). Unemployment is currently sitting at 27 per cent, and poverty at 40 per cent, i.e., 83 million people live in extreme poverty with less than $1.90 a day (AfDB). The unfulfilled Nigeria Vision 20:2020 (NV 20:2020) had identified three key areas of development that, if improved, would better the lives and well-being of Nigerians, namely the economy, governance and sustainable development

1) The economy

Works are underway to replace NV20:2020 with the Medium-Term National Development Plan (MTNDP) 2021-2025 and produce a longer-term plan, namely Nigeria Agenda 2050 (Nigerian’s FMIC). Financing such an ambitious plan requires a great deal of funding. Unfortunately, government revenue isn’t enough and guaranteed because of oil price fluctuations. Oil represents half of the government revenue (World Bank). Moreover, government debt’s service is high, despite debt (per cent of GDP) being relatively sustainable at 35.1 per cent in 2020 (IMF). Debt service represented more than half of the fiscal (collected) revenues in 2020 (AfDB)

Maybe even worse, the country’s vision or development plan such as NV 20:2020 and soon the MTNDP resemble a wish list. The reason being, clear, specific and sustainable fundraising sources to finance every one of the strategic initiatives mentioned in the plan is usually not identified and discussed in depth. The MTNDP should seek to address this specific issue of sources of fundraising (Sarah Alade). If funding for a strategic initiative isn’t available, it should be excluded from the plan. The plan should remain specific, targeted and focused on the economic, social and environmental priorities that are achievable, affordable and sustainable

2) Sustainable development

It is well-documented that the UN Sustainable Development Goal number seven (SDG #7) on clean and affordable energy for all will not be achieved by 2030. In addition, SDG #1 (no poverty), SDG #2 (zero hunger), SDG #3 (good health & well-being), SDG #4 (quality education) and SDG #8 (decent work and economic growth) are arguably off-target too

Regarding SDGs #1 and #8: as suggested above, Nigeria has a double-digit unemployment rate of 27 per cent and a poverty rate of 40 per cent (AfDB). Moreover, another 25 per cent or about 53 million Nigerians, are vulnerable; and due to the Covid-19 pandemic’s adverse effects on the oil price and the economy, estimates show 5 million Nigerians will fall back into extreme poverty (World Bank). The fact that the population growth (2.6% currently) rises faster than the economic growth drove another 2 million vulnerable people into extreme poverty last year alone (World Bank). (Projections show Nigeria’s real GDP growth to be 2.5 per cent in 2021; up from -1.8 per cent in 2020 – IMF)

Regarding SDG #2: Nigeria is experiencing higher food prices (AfDB). The IMF forecast inflation to still be a double-digit number in 2021 and 2022, at 16 per cent and 13.5 per cent, respectively. This high inflation can partly be due to transport and logistics’ disruptions because of the Covid-19 pandemic that has affected domestic supplies, the taking away of fuel subsidies and electricity tariff increases (AfDB)

Regarding SDGs #3 and #4: Nigeria ranked 168 of 173 in the 2020 World Bank human capital index. This context suggests that the country loses a great deal of human capital through poor education and an inefficient healthcare system (World Bank)

3) Governance

Nigeria ranked 149 of 179 countries in the world on the 2020 Transparency International’s Corruption Perception Index (CPI) with a score of 25, on a scale of 100 (very clean) to 0 (highly corrupt). There is a negative correlation between the level of corruption and long-term economic growth and foreign investment per capita (Jia Shao, et al.). This suggests that Nigerian governance issues stifle the country’s economic transformation.

To sum up, to transform its economy, Nigeria should be effective in the fight against corruption, have a robust implementation of the SDGs, and improve the quality of education and healthcare service delivery.

This article was written by Hugue Nkoutchou and published with permission.

Credits: https://www.abiq.io/

Nigeria, the most populous country in Africa, has a population of 206 million. As per business intelligence experts ABiQ, it is set to increase by 27.6 percent over the next 10 years and reach 263 million. This growth in population will need more infrastructure and resources.

The demand for power is going to increase as well and Nigeria will require an additional 5.6 Gigawatt of electricity capacity by 2030. This forecast ignores any power needs by industries or the current shortfalls in access to power and purely covers future population demand.

Investment required by Power Sector

The energy mix is diverse. Assuming a capital investment of $1.2 per watt, ABiQ predicts Nigeria will require an estimated $6.7 billion to provide 100% access to power for the additional population over the next 10 years. This includes 3.4 Gigawatt for the 88.6 million people currently without access to power and 2.2 Gigawatt for the 56.9 million people that will be added to the population over the next 10 years. This investment excludes the transmission and distribution costs required to reach the end-consumer.

West African access to power in 2018 (% of the population)

Credits: https://www.abiq.io/