The Effect of True Capitalism in Efficient Sectors

The Effect of True Capitalism in Efficient Sectors

Considering the current population growth, and the ever increasing demand for energy and the obvious inability of our energy sector to meet up with all these components, I don’t think there will ever be a time when steady power supply will be achieved in Nigeria as a result of government investment. This isn’t me being pessimistic, this is me being realistic. In some ways, one can conclude that the government has given up building more or upgrading existing refineries to meet up with local demands, going by the emphasis and attention being given to the refinery project by Dangote. A lot will be solved by that project when it eventually gets completed.

There are so many reasons why getting complex things done by the government get eventually complicated along the line given the very complex nature of our socio-political space.

Take public water supply for instance.  Public water supply existed in Nigeria before independence until it gradually wound down around the 80’s. And then the era of chronic inefficiency where water boards would supply water to towns and villages say once every week or as it pleases them.  This continued until gradually though painfully Nigerians began to supply their own water by sinking boreholes. Today practically every home owns one or has access to one, and the water board is no more. The death of public water supply was caused by inefficiency and negligence.

We can also have a look at what happened in telecommunication. The collapse of NITEL  for instance was as a result of how redundant they became when the GSM market opened up in Nigeria, bringing in competitors like MTN, GLOBACOM  and many other pioneers in those early days. Today NITEL is gone, and Nigerians are communicating better.

You can add NIPOST and Nigerian Airways  to the list if you like. Then we have our primary education system. It was pioneered by the government in the past, today whoever wants quality basic education would send his or her ward to a private school.

So maybe I can say that capitalism is taking over the country. Or could it be that in our own case capitalism encroaches to replace inefficient systems? We’ve seen it happen.

So could it be that the inefficiency in the Power sector is a good sign?  A sign of the looming taken over by the private sector or the fact that soon the average Nigerian will be able to power his home and workplace from a source outside the national grid?

Considering the trend, I think it’s a good sign. Renewable energy is getting more available though the immediate initial cost is high. But that was exactly what happened in the telecom sector but today most Nigerians can afford a mobile device . The prices of mobile devices fell drastically in the years following its introduction to the Sub-Saharan African market.

The same is expected to happen with photovoltaic cells. In fact, it has been happening constantly for months and years now, as the technology gets better and the efficiency of the PV  cells increases.

These graphs below from IRENA (International Renewable Agency)  shows a steep decline in prices of PV cells in different countries.

Average monthly solar PV module prices by technology in Europe


Average monthly solar PV module prices by technology and manufacturing

As you can see, they are all pointing downwards.

So hopefully it will get to a point where just like mobile phones, most Nigerians can own a PV Panel which could ultimately lead to the total collapse of the government-anchored power sector.

I would expect also that big industry players would also start investing in power for business.

Largely, as we continue to further our journey into true capitalism, expect a lot of government owned agencies to become redundant.

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