Nigeria is all the talk lately. A successful election and transition. An oil crisis. Improving efforts against Boko Haram. Power concerns. Africa’s largest economy can sometimes be hard to understand and process. Especially the telecommunications and power sectors.

Expanding Telecommunications

Nigeria is home to nearly 145 million subscribers. In 2002 it had a little more than 2 million subscribers, according to the Nigerian Bureau of Statistics (NBS). Some estimates indicate subscribers will rise above 150 million over the next six months. The growth cannot be overstated.

More can be done. About 85% of the Nigerian population is under mobile signal coverage. That coverage generally still fails to account for a significant portion of the Nigerian population that lives in the rural areas of the country. Industry players (alongside the government) are making concerted efforts to bridge the coverage gap. The current network of towers in the country has grown north of 40% since 2011 to more than 30,000 towers, only surpassed in total number of towers by South Africa at more than 35,000 towers.

Power Deficit

In South Africa, if you flip the switch at Eskom (a South African electricity public utility), you can turn off a significant portion of the mobile network, says an industry expert, but if you do the same in Nigeria, you do not have a chance of cutting power to more than half of the telecom towers. Nearly 50% of the telecom sites are off-grid, i.e. operating without access to the grid power supply.

More than half of the off-grid sites rely on diesel generators that run 24/7. The insecurity in this portion of the sector manifested through the oil (and consequently diesel) crisis that spread across the country approximately two months ago. Temporarily ameliorating this with black market fuel only exacerbated the sporadic nature of upkeep with these towers. As supply returns to normal, concern shall remain as the government considers eliminating subsidies on fuel which will push up the operating costs for these off-grid sites.

The remaining off-grid sites generally depend on battery hybrid solutions. Converting all off-grid sites to this structure is costly. Yet the long term reduction in operating cost (and potentially on the end-market price) spells greater possibilities for reaching rural populations.

Bringing on-grid sites into the battery mix has also been tossed around among Nigerian officials. Most on-grid sites rely on diesel generators as backup power sources. Not a terrible concern except the reality that more than 75% of the on-grid sites in Nigeria suffer power outages that can last for up to 5-6 hours a day. Between the off-grid and on-grid sites, the country effectively runs on diesel fuel more than half the time.

What to do next?

 The natural response to the challenges is to boost the Nigerian power grid and bring the towers online. The country, by all accounts, is one of the world’s lowest consumers of power at approximately 175 kWh per capita. But the logic runs off the track when most statistics suggest that power consumption may already be as high 350 kWh per capita if you account for diesel generators.

Nigeria has an electrification rate at more than 55% for the total population and 80% for the urban population. But again the reliability is low with Nigeria’s electrified population barely having more than 5 hours per day of available power. Liberalizing (and opening) the power sector for private investment will help to improve these numbers. Yet it is hard to find any Nigerian enthusiast who thinks this will quickly change the outlook in the near term. But it must be the long term solution.

So then what is the short term solution? More batteries…definitely an option with the expectation to bring them on-grid in the long term. Community-based power sources…also a great idea but does not actually address the concerns of the rural population that remains relatively cut off from large parts of the country. Satisfying the short-term and long-term concerns of urban and rural populations is not easy. Goodluck Buhari.

Elsewhere on Ventures

Triangle arrow