An Analysis of the Economic Consequences of Infrastructural Deficit in a Developing Economy: The Case of Electricity Supply in Nigeria

Abstract

Electricity supply, as a core economic infrastructure in a country, is crucial for promoting economic growth and the well being of the populace. This study examined electricity supply in Nigeria and the consequences of its shortage. This work adopted descriptive analysis approach and gathers data largely from secondary sources. The findings showed that electricity supply in Nigeria had been inefficient,
unreliable and grossly inadequate to meet the minimum electricity supply requirement for the Nigerian economy for over three decades. It is characterized by small installed generating capacity, low utilized capacity (less than 50%), low electricity generation from stations and substantial electricity losses. The endemic and perennial electricity supply shortage in the country has resulted in severe economic consequences for households, manufacturing firms and the national economy. There is also environmental implication of poor performance of electric power sector in Nigeria. The widespread use of electric generators for private electricity generation to complement electricity supply from national electricity utility has reduced environmental quality through pollution with its adverse health consequences on the people. Among the recommendations made include adequate and consistent public investment to increase the installed electricity generating capacity of the country to at least 15,000 mw by the year, 2018 and adoption of realistic measures to ensure that installed electricity generation capacity utilization is maintained at a minimum of 70%. There should be substantial upgrading of transmission and distribution facilities in order to minimize electricity losses.