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| Fig. 1: A generator of the type common to many a Nigerian. (Creative Commons license, courtesy of Eugene Kim on Flickr.) |
Nigeria is Africa's largest producer and exporter of oil. [1] Though this may be the case, the health country's domestic energy sector is in question. Africa's largest and richest nation suffers from a power supply that is intermittent at best, with frequent and extended blackouts, and which forces the vast majority of Nigerians to generate their own electricity themselves - using personal power generators, such as that shown in Fig. 1 - and at great expense. NOIPolls, a Nigerian polling agency, has found that Nigerians spend thrice as much to run personal generators than they do on their electricity bills.
One factor which predicates the multiple crises of the Nigerian energy sector is the supply of fuel to the domestic energy sector. Despite decades of government intervention, unrest in Nigeria's oil producing Niger Delta has persisted, and continues to constrain the country's energy sector. Pipeline breaches by oil thieves, who blow up major pipelines to illegally acquire and sell the fossil fuels they contain, prevent the transport of fuel to Nigeria's three domestic refineries. That these refineries are often unable to process any product means that they generally exist in states of disuse and disrepair, and that little petroleum product is made available for the domestic market, and that these products must, instead, be imported, often from countries that make those products using exported Nigerian oil. It has been estimated that Nigeria loses 100,000 barrels a day to oil thieves, equivalent to $5 million a day and over $1 billion a year, in today's industry. [2]
Despite these challenges, there is some hope on the horizon for Nigeria's energy sector and refinement capacity. Nigeria's, and Africa's, richest man, Aliko Dangote, has, for a few years, been constructing a $12 billion refinery with the capacity to process 650,000 barrels per day. This production exceeds Nigeria's total demand for oil, and Dangote has indicated that much of this production will be earmarked for domestic consumption. [3]
This private presence in the refinement industry has the potential to effect great positive change on Nigeria's energy sector. The management of a privately-owned, profit-interested refinery might invest significantly more in securing supply than government- employed management. Additionally, the introduction of cheaper, locally-refined petroleum products to the market might increase competition, lower prices and dramatically increase access to those products in the domestic market, potentially allowing for significant improvement in local energy generation.
All of this, however, is contingent on very many factors out of the control of any individual and most organizations. Government would still have a role to play in securing the Niger Delta, and preventing the oil theft that has contributed to the crisis of the Nigerian energy sector.
© Muzzammil Muhammad Shittu. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] L. George and J. Payne, "Nigeria's Aug Oil Exports to Top 2 Mln Bpd, 17-Month High," Reuters, 22 Jun 17.
[2] P. Wallace, "Nigeria Oil Thieves Keep a Lid on Output Even as Bombs Abate," Bloomberg, 20 Jul 17.
[3] "UPDATE 2 - Nigeria's 650,000 Bpd Dangote Refinery Seen Onstream By End 2019," Reuters, 23 Oct 12.