Energy Poverty in Nigeria – Prevalence, Human Development and Public Policy Options
Nigeria recently topped the chart of countries with the highest number of energy poor people in the world. The number of persons without access to electricity in Nigeria rose by 22% to 91.94million from 75.69million in 2016. This implies that 1 out of 8 persons without access to electricity in the world lives in Nigeria. Worse still, several persons that have access to electricity could still be classified as energy poor due to power blackout which is rampant in Nigeria. The average national and rural blackout per week is estimated at 64 hours and 114 hours respectively. SDG tracker reports that only 15% of Nigerians have access to clean cooking fuels such as cooking gas (LPG), electricity, solar power, etc. Thus, with the current spike in energy prices – (Diesel – N820/ltr; kerosene – N710/ltr; LPG – N950/kg), it is estimated that, at least, 24million Nigerians who are vulnerable to energy poverty will slide into the energy poverty trap by the end of 2023.
Triple Global Shocks and the Nigerian Economy
In less than three years, the global economy has been hit by the triple shocks of covid-19 pandemic, Russia-Ukraine war and inflation. The twin shocks of Covid-19 and Russian-Ukraine war precipitated the inflation shock through the disruption of the global supply chain. Also, the series of monetary and fiscal stimulus that were adopted by most economies in a bid to support post-pandemic economic recovery injected massive liquidity which later began to stoke inflation.
Nigeria, the largest economy in Africa, was not spared of the sour taste. From the economic meltdown of 2020 to the hyperinflation of 2022, Nigerians are being rattled while policy makers are confounded. Initially, the monetary authority misread the inflationary surge, taking it to be transitory rather than entrenched. After 70 months of taking a dovish stance and upholding monetary unorthodoxy, the CBN began a regime of monetary tightening to rein in inflation. But as the CBN continues to inject excess liquidity through its massive lending to the FGN, investors are expressing worry on the effectiveness of interest rate hike to tame inflation. One big question that investors and analysts are asking is, “is there anything Nigeria could have done differently to reduce its vulnerability and strengthen its resilience to exogenous shocks?”
In this edition of the FDC monthly publication, the FDC Think-Tank analyses these issues, their implications on the economy and also provided several other interesting public policy discussions.
Enjoy your read!