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A tailor uses a generator for power in Lagos, Nigeria, on September 27, 2016. Photo: Pius Utomi Ekpei/AFP via Getty Images

Over 75 million Nigerians lack electricity access — including nearly 60% of those in rural areas — and development of the off-grid solar (OGS) market there seriously lags behind other African countries, notably in East Africa.

Yes, but: Factors that have impeded the Nigerian OGS market appear to be changing and the sector is poised for substantial growth in the coming years. Widespread deployment of commercial OGS technology across the country could not only address the harmful energy-access shortfalls but also provide a catalyst for job growth and investment.

To compensate for inadequate power supply, Nigerians spend an estimated $14 billion annually to run small-scale diesel generators. Over 80% of Nigerian businesses cite electrification challenges as the most significant obstacle to doing business, and the government estimates that erratic power supply results in more than $25 billion in annual losses.

But progress on multiple fronts promises growth for the Nigerian solar sector:

  1. Policy commitment: The government has electricity access targets of 75% and 90% for 2020 and 2030, respectively. Now, with a revitalized Rural Electrification Agency, new policy frameworks and a $350 million World Bank project, the government is better equipped to achieve these goals and foster sector growth.
  2. Company entry and maturation: Leading international OGS companies have been reluctant to enter Nigeria, and local companies have lacked capacity for at-scale deployment. This is changing as major players migrate from East to West Africa and local companies develop operational experience to compete. For example, Lumos is planning to continue growing its customer base and startups such as One Watt Solar are exploring blockchain.
  3. Capital: Obtaining investment in this capital-intensive sector has been a challenge. International financiers have shown interest in Nigeria, but prospective borrowers face major currency-exchange risks. Domestic banks have been reluctant to lend, but this is changing now as the market matures.
  4. Mobile money: The lack of mobile money platforms, like M-PESA in East Africa, has deterred the spread of pay-as-you-go technology by limiting an important payment channel essential for lower-income customers. Companies are now piloting innovative ways to replicate this payment system, including partnering with mobile phone operators.

What’s next: As the OGS sector grows, more Nigerians will gain energy access and the economic and quality-of-life benefits it confers. It’s too early to tell which companies will emerge with significant market share, but joint ventures between international and local companies will have the inside track.

Jonathan Coony is global lead for green competitiveness at the World Bank Group.

Go deeper

Off the Rails

Episode 4: Trump turns on Barr

Photo illustration: Eniola Odetunde/Axios. Photos: Drew Angerer, Pool/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 4: Trump torches what is arguably the most consequential relationship in his Cabinet.

Attorney General Bill Barr stood behind a chair in the private dining room next to the Oval Office, looming over Donald Trump. The president sat at the head of the table. It was Dec. 1, nearly a month after the election, and Barr had some sharp advice to get off his chest. The president's theories about a stolen election, Barr told Trump, were "bullshit."

In photos: Protests outside fortified capitols draw only small groups

Armed members of the far-right extremist group the Boogaloo Bois near the Michigan Capitol Building in Lansing on Jan. 17. About 20 protesters showed up, AP notes. Photo: Seth Herald/AFP via Getty Images

Small groups of protesters gathered outside fortified statehouses across the U.S. over the weekend ahead of President-elect Joe Biden's inauguration Wednesday.

The big picture: Some protests attracted armed members of far-right extremist groups but there were no reports of clashes, as had been feared. The National Guard and law enforcement outnumbered demonstrators, as security was heightened around the U.S. to avoid a repeat of the Jan. 6 U.S. Capitol riots, per AP.

Felix Salmon, author of Capital
7 hours ago - World

China's economy grows 6.5% in Q4 as country rebounds from coronavirus

A technician installs and checks service robots to be be used for food and medicine delivery in Jiaxing, Zhejiang Province, China, on Sunday. Photo: Hu Xuejun/VCG via Getty Images

China's economy grew at a 6.5% pace in the final quarter of 2020, the national statistics bureau announced Monday local time, topping off a year in which it grew in three of four quarters and by 2.3% in total.

Why it matters: No other major economy managed positive growth in 2020. Although the COVID-19 pandemic was first detected in China, the country got the virus under control and became one of the main positive drivers of the global economy even as the rest of the world was largely under lockdown.