African financial services provider, Coronation, has revealed that Nigeria’s annual electricity generation increased by only 19.6 per cent in 11 years, that is between 2010 to 2021.
In its maiden infrastructure report launched on Thursday, the firm described Nigeria’s infrastructure deficit is a “cumulative problem”, saying, one demonstration of this is Nigeria’s long-term record of annual electricity generation.
It said the rise in power generation, which is according to data from the National Bureau of Statistics (NBS), meant there was a compound annual growth rate (CAGR) of 1.6 per cent.
“In 2021 annual generation (which excludes amounts generated by diesel units at business and domestic premises) was 36.4 terawatt hours (TWh) per annum.
“A nation with a similar population, Brazil (with 203 million inhabitants), generated 663.0 TWh. A nation with roughly half Nigeria’s population, Egypt (104 million), generated 202.0 TWh.”
Coronation said the trend in government investment in infrastructure has fallen short over several decades, “something that has created, cumulatively, an enormous deficit as infrastructure fails to meet the country’s needs.”
The report further said: “The record of the Nigerian government in capital expenditure over several decades underscores the need for increasing private-sector investment.
“Public expenditure on transportation, education, hospitals, power, housing, and other essential infrastructure has not kept up with the needs of a population growing at a long-term rate of c.2.5% pa.”
Managing director of Coronation Asset Management, Aigbovbioise Aig-Imoukhuede, in a remark at the launch of the report, proposed public-private partnerships (PPPs) as a remedy to the country’s infrastructural gaps, reiterating the company’s position that “Nigeria is ripe for private investment in infrastructure.”
According to him, despite Nigeria’s rich natural resources, progress has been impacted by inadequate infrastructure, adding that the nation’s transportation, healthcare, and education systems require substantial investment.
He said it was the belief at Coronation that addressing the infrastructure deficit is not merely a necessity, but the strategic imperative bearing in mind that infrastructure serves as the backbone of any economy. “It enables businesses to thrive, communities to prosper, and individuals to flourish. By investing in infrastructure, we’ll not only create job and stimulate economic activity, but also enhance productivity and efficiency,” Aig-Imoukhuede said.
“In this regard, we see public private partnerships (PPP) as a crucial mechanism for bridging the infrastructure gap. PPPs offer an opportunity to leverage the strengths of both the public and private sectors, utilising private sector capital, expertise and innovation to deliver high quality infrastructure products to stand the test of time.”
On his part, Guy Czartoryski, head of research at Coronation, suggested that higher federal government bond yields could attract private investors, urging the authorities to encourage the education of civil servants in PPPs to avoid contractual issues.
He said the infrastructure report serves as a beacon of knowledge, “guiding stakeholders through the complexities of infrastructure financing across the continent.”
