Power, Transport Development: Key to unlocking Nigeria's potential

Nigeria remains the beacon of the sub-Saharan West coast - buoyed by abundant fossil fuel resources and the largest population on the African continent (estimated at about 167 million). As strong economic growth continues, annual incremental per capita GDP increases are driving a thriving middle-class and building a large consumer driven market for a diverse range of products.

The Nigerian Federal Government has set itself the target of growing the country's economy to become the biggest in Africa, as well as one of the top twenty largest (by GDP) in the world by 2020. Although the goal of breaking into the world's top 20 may appear highly ambitious at this stage, the appetite for economic development is as clear as Nigeria's intentions of eclipsing South Africa as the leading African powerhouse.

In order for Nigeria to achieve her growth goals, the country will need to undergo an unprecedented level of infrastructure overhaul and development. At present, significant infrastructure delivery gaps exist - most prominently in the Energy and Power, and Transport infrastructure sectors. Such infrastructure gaps exist as a result of a range of highly detrimental factors which have contributed to the current state of infrastructure decay. Years of civil war, multiple military coups and almost thirty years of military governance have severely hindered infrastructure maintenance plans.

Additionally, the plague of almost all African countries - maladministration of project funding and corruption at multiple levels of governance, has led to a multitude of delayed and abandoned projects.
The poor provision of energy and power resources remains possibly the biggest drain on Nigeria's economy, with only 40% of the population estimated to be connected to the national grid, notes Frost & Sullivan.

Those who have managed to obtain access to the grid remain affected by regular power outages and rolling blackouts, caused by overwhelming demand. Large businesses are forced to purchase and run generators which drive up overheads, while small business owners who are unable to afford access to a generator are often unable to remain profitable. The gap in existing infrastructure is plain to see - current installed energy capacity totalled approximately 6,900MW in 2011, with actual functioning capacity even lower at an estimated 3,321MW.

The government's stated intention is to increase supply to 18,000MW by 2015, and 35,000MW by 2020. Currently, in the energy and power sector alone, US$7.15 billion in key energy generation and transmission projects were identified as ongoing in 2011. All three tiers of government (Federal, State and Local) combined have also released an estimated US$8.44 billion of funding towards the development of Nigeria's National Integrated Power Projects (NIPPs) between 2005 and 2011. Speculation has it that future power solutions range from the development of nuclear technology to the widespread implementation of renewable energy sources.

Perhaps more tangible is the ongoing feasibility study taking place regarding the development of the (estimated) US$4 billion 2,600MW Mambilla hydro-power dam. Other ongoing considerations include assessment of the potential for coal-fired energy generation at Zungeru and Enugu. In terms of electricity generation capabilities, a 2011 Frost & Sullivan analysis indicated significant inefficiencies in public sector energy generation. Public sector unutilised installed capacity amounted to 51.4%, in contrast with 15.6% in the private sector. In an effort to improve efficiency in the sector, the Nigerian government has indicated the intention of unbundling the state-owned Power Holding Company of Nigeria (PHCN) to private bidders.

However, a number of processing delays have taken place since the announcement and the unbundling process has not yet been successful. Although the initial concept of shifting to privately managed power distrAir Jordan XI 11 Wool