NEW YORK, NY — (Marketwired) — 03/17/15 — Bradford Associates analysis of recent developments in Nigeria–s domestic energy program as a consequence of policy decisions taken by President Goodluck Jonathan–s administration are having a major impact on the literal delivery of –power to the people– and providing a boost to economic growth through an increase in electricity generation.
Since becoming the leader of his country President Goodluck Jonathan has been pursuing a number of policy initiatives aimed at strengthening the institutions and structures necessary to deliver economic growth in the 21st Century. One of the key policy areas has been in developing domestic energy policy to match Nigeria–s status as the largest producer and exporter of oil & gas on the African continent which culminated in the privatization of many assets in 2013. (i)
The territory of Nigeria is some 350,000 square miles which equates to approximately twice the size of California, one of America–s most prosperous states, though with over five times the population. Like its main economic rival South Africa, Nigeria faces the challenge of developing a mix of energy sources which can literally power economic growth and development. As academic studies have shown, energy shortages can severely hamper the speed of economic growth. (ii) Given that analysts and experts such as CNN Money forecast that Nigeria will be the third fastest growing economy in the world in 2015 means that there is much at stake. (iii)
A 2011 research article authored by the Vice-President identified that in order for Nigeria to become one of the twenty most economically advanced countries Nigeria would be required to grow by some 13% per year to meet the World Bank criteria. (iv)
Electricity production in Nigeria is derived from three main sources of energy, natural gas, hydroelectric and oil which together account for 99% of the raw material for power generation. In 2013 President Goodluck Jonathan decided to introduce new electrical generation and distribution companies to a sector once entirely controlled by the State sector through national power company PHCN. (v)
One of the tangible benefits of the President–s fresh approach to the issues of energy generation has been to raise electricity generation nationally from some 2,300 Mw on taking office to over 4,000 Mw at the start of 2015. (vi) This in part has been a consequence of a strategy to leverage natural gas production which has been hampered in part by poor pipeline quality. Most recently a $180 million private industry investment in a key natural gas electricity generation plant was announced. (vii)
In the field of hydroelectric electrical generation from water, the Zungeru project will deliver one of the largest hydro plants in the country as a key part of Nigeria–s Renewable Energy Master Plan (REMP) first proposed in 2006. This project alone when operational will add some 700 Mw of electricity or a little over 20% of electrical generation capacity to Nigeria, a development which most definitely represents valuable water under the bridge. President Goodluck Jonathan personally attended the ground-breaking ceremony in 2013 for this important project. (viii) As the Wall Street Journal put the issue succinctly, there is clearly much room for growth in the sector as Nigeria has near 250 times the population of North Dakota yet produces around half the electricity of the state. (ix)
Reporting by Peter Elston, Bradford Associates
(i) Financial Times, (September 30th, 2013) Nigerian power facilities turn private
(ii) Energy 61 (8), Aliyu, A., Ramli, A., Saleh, M. (2013). Nigeria electricity crisis: Power generation capacity expansion and environmental ramifications. pp. 354-367.
(iii)
(iv) Sambo A S in Journal of Energy Policy, Research and Development (2011), “Nigeria–s Long Term Energy Demand Outlook to 2030”. Vol. 1 No.1 pp. 1-17.
(v) The Guardian newspaper,
(vi) Allafrica.com,
(vii) Bloomberg.com (Feb 25th, 2015)
(viii) Power China press release (May 29th, 2013) Nigerian President Attends Opening Ceremony of Zungeru Project
(ix) Wall Street Journal, April 23rd, 2014 Can Moguls Untangle Nigeria–s Power Lines?
Contact:
Peter Elston
Bradford Associates
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