viewpoint | 04 January 2018

Nigeria's energy connection

Reversing Nigeria’s infrastructure deficit and developmental challenges: the energy connection

Quality infrastructure is an essential element for productivity and growth. For Nigeria, and indeed Africa, the need for adequate infrastructure – secure energy supply, efficient transportation, reliable communication systems, resilient sanitation, and affordable housing – is particularly apparent. While Nigeria has basked under the glow of impressive economic growth over the past decade, serious infrastructural shortcomings have undercut business and economic growth, service delivery, trade and investment. Unless Nigeria and the rest of the continent urgently address the obvious infrastructure deficit, the full socio-economic development potentials of the Africa economy will continue to be constrained.

Most African countries are facing a substantial infrastructural deficit. The impressive growth performance of the continent in the past decade is in sharp contrast to the experience of the 1980s, which was largely termed the lost decade for Africa. The economic performance in the region started to turn for the better in the mid-1990s with improved policies and structural reforms. African countries recorded some of the fastest, most diversified and consistently high economic growth rates in the world during the past decade and the continent is also projected to grow at above the global average in the future. This evolution occurred in spite of the huge infrastructure challenges faced by most African nations.

Past and present efforts to address the continent’s infrastructure gap have been constrained by budgetary challenges, limited and inconsistent foreign aid inflow, the weak capacity of the private sector to mobilise international finance in many of the countries, the small size of the domestic finance and capital markets, and even by many of the economies themselves. Yet these countries have no alternative but to upgrade, maintain existing infrastructure and invest in new ones in order to meet their development aspirations.

The improved macro-economic environment, governance and institutional indicators provide Africa with better outlook to attract investments from private sectors, development partners and multilateral institutions into infrastructural development, and reverse the existing inadequate state of transport networks, energy supply, information and communication technology (‘ICT’) that cut across Africa.