Nigeria Energy

In the latest push by Nigeria’s larger corporates to expand their continental footprint, Dangote Industries has announced plans for significant new capital commitments throughout sub-Saharan Africa alongside two of the world’s largest institutional investors at the first ever US-Africa Summit in Washington DC in August.

Four years after Nigeria passed the Nigerian Content executive act (NCA) in April 2010, new government figures seem to indicate that it has helped stimulate a jump in activity by domestic firms in the country’s hydrocarbons sector.

Long the country’s Achilles heel, the electricity sector in Nigeria took another step forward in late May, when an increase in end-user tariffs was announced. Though the rise in prices prompted concern from consumers, the change will help to attract fresh capital from private investors who require at least cost-recovery levels for production and distribution.

Following last year’s successful privatisation programme, Nigeria is looking to increase electrification rates, stepping up investments in transmission infrastructure while also boosting generation capacity, though it will likely be well into the next decade before connectivity targets are reached.

Nigeria’s recent GDP re-basing may have brought attention to the larger-than-expected role the services sector plays in driving growth, but in recent weeks, it has been the hydrocarbons industry taking centre-stage. A major initial public offering (IPO) in May combined with a pair of significant investment deals have highlighted the rising profile of the country’s indigenous firms.

Businesses and consumers in Nigeria will be hoping that a more reliable electricity supply could be in sight after the government transferred most of the country’s power generation and distribution to the private sector at the beginning of November.