Is Poor Electricity Supply Responsible for Nigeria’s Slow-Paced Industrialization?

According to a Thisday report, the Nigerian Minister of Power, Works and Housing, Babatunde Fashola, said the lack of adequate electricity in Nigeria can’t be responsible for the country’s slow-paced industrialization, or drop in levels of her economic growth.

He said existing statistics in the power sector shows that Generation companies (Gencos) have been able to grow their generation up to 7000 MW, and the Transmission Company of Nigeria (TCN) is equally able to transmit all of that, but the Distribution companies (Discos) can take just about 5000 MW, leaving a balance of 2000 MW that industries in the country can take up but are yet to.

“We hear all our so called experts who say power is why the economy of Nigeria is not growing. That is not factual and it is not correct. At the time when we had less power in 2013 and 2014, the economy of this country was growing at 7 % per year,” said Fashola.

“Power will clearly contribute to the growth but power is not the reason why the economy is not growing.”

“I’ve also heard of the need for industrialization (with) power and that’s true. But, there are nations who haven’t solved their power problems, who are industrialized faster than us, and who are solving it and industrializing at the same time. Today, we import things from India; all of India is not powered,” he added.

The Minister agrees that inadequate power is needed for industrialization but doesn’t agree with the notion that inadequate power supply is responsible of the slow rate of industrialization been experienced in the country.

This claim may not go well with a many of Nigerians who thinks inadequate power supply in the country is for the slow economic growth especially the slow-paced industrialization in the country.

Is the Minister right? The relationship between energy consumption and economic growth has been a well-studied topic in the field of energy economics and some empirical findings have shown that the relationship varies from time to time and country to country due to institutional, structural, policy differences, climatic conditions and energy consumption.

For instance, according to some studies on the causal relationship between electricity consumption and economic growth, while there is causal relationship between energy consumption and economic growth in Turkey and Sri Lanka, there is none in Indonesia and Thailand resulting from the fact that electricity is mostly used for basic human needs and the rest is used for economic activities in these two countries.

A study on Nigeria and Venezuela suggested that both countries do not show a long-run relationship. It is possible that the political environment, as well as the high level of corruption in these economies, has blurred long-term economic behavior.

We need to understand also that energy consumption, includes, oil, electricity, coal and renewable energy, as such electricity is not the only form of energy involve in industrialization. In fact, the power behind the famous Industrial Revolution that started in Britain was coal and not electricity. Coal was the energy used to power Steam Engines that powered Britain to prominence as the first industrial nation in the world.

Steam engine which was invented by Thomas Newcomen in 1712 and developed by James Watt brought about the industrialization of modern civilization. For almost 200 years the coal powered stem engine was the outstanding source of power for industry and transport systems in the West.

Though, the first commutator electric motor capable of turning machinery was invented by the British scientist William Sturgeon in 1832, the first steam engine, made at Dudley Castle coal mine dominated and prepared the way for the development of more advanced heat engines and for the large-scale generation of electricity, which together effectively displaced it from its supremacy in the 20th.

The industrialisation of a nation is a product of Energy (Nigeria has energy in abundance and electricity is only a form of it), good governance, quality leadership, quality education, innovation, scientific research and technology development, and other economic factors of production.

Just as Nigeria lacks the ability to efficiently produce petrol from crude oil. It lacks the ability to produce electricity from other forms of energy, obviously due to bad governance and leadership, lack of technical innovation and education, and lack of interest in research and development. These same reasons are responsible for the country’s slow-paced industrialization.

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