Nigeria had the largest energy access deficit in the world in 2021. Regarding energy affordability, it can provide itself completely with self-produced energy. However, according to a report from the World Bank, “as many as four in 10 Nigerians live below the national poverty line.” The report also noted that they lack education and access to basic infrastructures such as electricity, safe drinking water, and basic sanitation. The energy poverty issue in Nigeria has put many Nigerians, especially in the rural areas, at a high risk of relying on hazardous and polluting sources of lighting such as candles and kerosene lanterns. Lack of access to energy or electricity is directly related the economic hardship, food crises, health concerns and perpetuation of the poverty cycle.
Overview of Energy Poverty in Nigeria
The rapid population growth in Nigeria has increased the overreliance on fossil fuels that contributed to creating socio-economic drawbacks. The massive demand and the lack of an established energy supply chain in Nigeria resulted in acute energy poverty. In 2020, the Rural Electrification Agency (REA) estimated that almost 90 million people in Nigeria do not have access to grid electricity and the millions of those connected to the grid have less than 12 hours of electricity every day. The major problem with the energy shortage in Nigeria, regardless of the possession of enough conventional energy resources, is the inadequate supply of distribution, which is not able to meet the basic demand for the increased population.
Energy poverty in Nigeria is more severe in rural areas, where the majority of the population lives with a lack of infrastructure and an unstable and insufficient power supply, according to Environment, Development and Sustainability journal. The effects of energy poverty were worsened by COVID-19 when the household demand and industrial demand increased. The pandemic disrupted the supply chain due to the shortages in the workforce. Since the off-grid sector requires extensive labor, the shortage of workforce due to the safety restrictions during the pandemic stagnated the off-grid businesses. The downfall of the off-grid businesses in Nigeria pushed Nigerians to heavily rely on other nonrenewable resources of energy that also don’t adequately meet the demand.
Energy Disparities in Rural Population in Nigeria
In 2021, according to the World Bank, about 47% of Nigerians are living in rural areas. The percentage of access to electricity in the rural population was 24.6% in 2020, while the percentage of energy access for the urban population in Nigeria was 83.9%.
The large socio-economic disparities between urban and rural areas have enlarged the gap in accessing electricity. Ahmad Salihijo Ahmad, CEO of Nigeria’s REA, remarked on the seriousness of the issue in the rural areas in 2021, “…it’s not just a question of having no lights. There are adverse effects on business, social structures and the well-being of people in rural areas.”
Efforts to Address Energy Poverty in Nigeria
To address the energy poverty issue in Nigeria, the Nigerian government and international corporations have put vast investments in building an off-grid clean energy sector and the adoption of clean energy solutions to address the energy deficit in Nigeria. Accompanied by the donor agencies with financial and technical support, the off-grid market in Nigeria exponentially grew.
In 2021, according to the Rural Electrification Agency (REA), developing the off-grid sector in Nigeria would create a $9.2 billion per year market opportunity for solar home systems that could save $4.4 billion per year for Nigerian homes and businesses. The enlargement of off-grid renewable electric sources in Nigeria has reduced the prices of solar energy over the years. However, David Arinze, a renewable energy specialist and program officer, pointed out during an interview in 2021 with The Cable, that the focal point of reducing energy poverty must be the government’s need to help the local sector scale and promote integrated collaborations with the local stakeholders in the renewable energy sector.
Since the electricity deficit in Nigeria cannot be resolved only with national efforts, international support has been implemented. To elaborate, the Federal Government of Nigeria launched the first off-grid energy system to address the energy deficit in 2018, Electrification Project for Nigeria with financing support from the World Bank worth $350 million. With the help of agencies of the Federal Ministry of Finance and REA, the project has been dealing with increasing electricity services for households, public educational institutions and various enterprises.
Technical assistance in building a framework for rural electrification of upscaling and improvement on building an extended supply chain could amend the energy poverty in Nigeria, especially in the rural areas. With the expansion of the off-grid energy businesses in Nigeria, the prospect of adequate energy distribution is positive.