THE NIGERIAN ENERGY CRISIS

The Nigerian Energy Crisis: What is the Prospect for Privatisation?



The Nigerian energy crisis: what is the prospect for privatisation?

1. Introduction

'The Enabling Urban Poor Livelihood Policy Making: the Role of Energy Services' project intends to provide a holistic understanding of the role of energy in sustainable urban livelihoods, as well as form a basis for making policies that address these issues. Recent concerns about the urban poor are the result of the realization that majority of the world population in the next two decades would be living in urban areas. This rapid rate of urbanization will generate a large percentage of urban poor whose quality of life will depend on many factors including access to cheap, affordable and efficient energy services. Unless efforts are made to put in place policies that would stem the negative impact of energy on the urban poor, the world faces a major challenge of attaining the Millennium Development Goals (MDGs).

Primary data collected from the field during the study was used to test the validity of the four hypotheses namely: Clean and affordable energy services are important for good physical well being and productivity of household members; Social networks and relationships facilitate access to energy services; Clean and affordable energy services are a key factor in sustainability of livelihoods by increasing viability of existing enterprises and enabling establishment of new ones; Energy sector reforms lead to improved access to clean and affordable energy services by enterprises.

Four communities in two cities were chosen for this study through a multi stage sampling technique. Two of the communities, Ilaje and Amukoko are located in Lagos, an old urban settlement, while the other two, Kwali and Karmo are located in Abuja, a new and merging urban settlement. In all, 451 households and 147 enterprises were surveyed and interviewed in a three-stage sampling method. The first stage involved using systematic sampling design to select streets proportionately to their numbers in each community. At the second stage, simple random technique was used to take sample of enumerated housing units in the selected streets. Finally, systematic sampling method was used to select households from the selected housing units taking into cognisance the sample size for household and enterprise respectively.

1.1 Energy resources in Nigeria

Nigeria is well endowed with energy resources. The main energy resources are crude oil, natural gas, coal, tar sand, biomass and other renewable energy resources such as solar energy, tidal and wind power, as well as large hydroelectric potential. Proven crude oil reserves stand at about 40 billion barrels, and this is expected to reach about 55 million barrels in the very near future. There is also an abundant natural gas resource, which currently stands at about 2.7 billion cubic metres. The estimate for tar sand deposits stands at about 31 billion tons, while coal resource estimates are estimated to be between 2 and 10 billion tons.

The combined micro, mini, small and large hydroelectricity potential of Nigeria is estimated at 10,000 ...