Straplan Think Tank, has been publishing diagnostic reports on the Nigerian economy since 2011.
You can check out our previous reports in the “Nigerian Economics” series.
Introduction
In this report we beam our radar on Nigeria’s electricity power supply industry.
A community in darkness is sure to grope for growth. Modernity and civilization were built on huge
consumption of energy, especially electric power. Electric power is the underlying factor in the
transformation of Nigeria from a traditional society ready for take-off to the take off stage
(according to the growth theory put forward by American economist, WW. Rostow, known as the
five stages of economic development, and perhaps the best known non-Marxist theory to explain
how economic societies evolve).
The adoption of a new tariff regime under the Multi-Year-Tariff-Order (MYTO) 2 electricity pricing
model, commenced on June 1, 2012. We view this as a key milestone in the federal government’s
power sector reform programme. The introduction of the new tariff order will help create a sector
in which entities would run as both a going concern and welfare provider. The MYTO 2 has created
opportunities for return on investment in the Nigerian power sector, hitherto non-existent, thus
making it more attractive for new investments.
A robust and reliable electricity power sector is the main catalyst for the long-desired social change
and economic transformation in the country. Therefore, it is our opinion that Nigeria is an
excellent investment destination for companies, especially in infrastructure development, to
develop a business with about 40-60 year lifecycle because of the vast opportunities in the
country.
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