Yemisi Izuora
The quality of transmission infrastructure in Nigeria is weak and requires massive investment to provide buffer for the grid system.
This can happen with generous fiscal incentives that is attractive to investing public especially the private sector.
This are part of highlights shared by the Director and Chief Executive Officer of the Center For The Promotion Of Private Enterprise (CPPE) Dr. Muda Yusuf in has outlook for the Nigeria energy sector in 2025.
Yusuf, also said the fiscal policy should be extended towards deepening of the Compressed Natural Gas (CNG) initiative and renewable energy solutions.
He also, predicted that the electricity pricing conundrum would remain a tricky issue in 2025 and that the economy is too fragile to absorb the shocks of a fully deregulated or commercial electricity market.
“The quality of the transmission infrastructures and the consequent frequent collapse of the transmission grid require significant investment which the government would have to struggle to provide.
“The outlook for the sector remains a major cause for worry in 2025. There are also the transition challenges of the states taking up regulatory responsibilities for electricity market. Not many states have the capacity to manage this transition. This is therefore a major source of risk for the electricity sector in 2025.” he stressed.
He said the outlook for the Nigeria energy sector is moderately positive especially following the increased capacity in domestic refining of petroleum products.
But this he added would require supportive fiscal and monetary policy support to unlock the full potentials of the domestic refineries and stimulate more investments in the sector. Yusuf listed factors that may drive the positive outlook for the sector to include enhanced domestic petroleum refining capacity from the Dangote refineries, the Port Harcourt Refineries, Warri and others.
There is also competition among domestic refineries which may have a moderating effect on prices.
He added that expectations of a slump in global energy prices on the back of Trump presidency and the easing of geopolitical challenges in the 2025, may have effect on the sector as well and sustenance of the naira for crude arrangement which could help moderate prices of domestic refining of crude.
Speaking generally on the business resilience strategies in 2025 he advised that business managers and owners need to prioritize the following to ensure resilience in 2025.
He spoke on the need to leverage on technology to reduce cost and ensure competitiveness, while industries need to deepen backward integration to reduce the forex exposure.
Yusuf, called for massive reduction in debt financing to reduce the burden of high interest rate and adoption of efficient energy solutions to reduce the pressure of high energy cost, among others.