AN initiative set forth by the Nigerian Electricity Regulation Commission (NERC) to guarantee a secure and continuous supply of electricity for communities across Nigeria has been signed. In order to meet this demand, a distribution company will need to collaborate with independent power generators. As of August 2022, Ikeja Electric Distribution Company, in partnership with Enaro Energy Limited, has agreed to a Tripartite Interconnected Mini-Grid Agreement for this purpose.
For the first time in Lagos, the residents of the Ishokan Phase 1 Estate, MercyLand Estate, and MercyLand Phase 1 in the Ayobo-Ipaja LCDA will be able to rely on an uninterrupted power supply through the combination of grid and off-grid generation and distribution of power.
The level of commitment exhibited by Ikeja Electric and Enaro Energy has dispelled earlier doubts expressed by those within the communities served. This new ability to provide a round-the-clock supply of electricity is indicative of the growth of Nigeria’s energy sector, as well as the subsequent increase in the country's power supply.
NIGERIA’S ENHANCEMENT OF ITS COMMODITIES SECTOR
This isn’t the first time that Nigeria has taken steps to strengthen its commodities sector. Since 2021, AFEX, Nigeria’s commodities exchange, has been pursuing its objective to boost regional trade integration by expanding into Kenya and then Uganda in 2022. The latest expansion saw the Ghana Commodities Exchange (GCX) signing a Memorandum of Understanding to further fortify the commodity trading ecosystem across Pan-African countries.
The partnership between AFEX and GCX aims to facilitate commodities trading, warehousing, quality standards, and market infrastructure development. “Our joint efforts will not only amplify market liquidity but also empower stakeholders and unlock value for Nigeria and Ghana’s value chain,” states Akinyinka Akintunde, the President and CEO of AFEX.
Considering that the exports of commodities such as oil and natural gas have been the driving factor behind Nigeria’s growth and account for more than 91% of total exports, it's no wonder that traders’ confidence in commodities is growing. With this confidence compounded by ongoing developments in Nigeria’s commodities sector, traders interested in investing in the sector can securely trade commodities on a platform that offers low and stable spreads. Low spreads mean traders pay less for each trade, reducing overall trading costs, which can lead to higher profitability. In addition, considering the volatility of some sectors, commodity trading platforms utilize stop-out protection to shield their users from incurring further losses. Moreover, safe and reputable trading platforms enable traders to have access to the global commodity marketplace.
NIGERIA’S POTENTIAL TO BECOME A PLAYER IN THE INTERNATIONAL MARKET
The Securities and Exchange Commission (SEC) in Nigeria is shining an equal spotlight on the country’s agricultural sector. By working closely with the Standards Organization of Nigeria (SON), the SEC hopes to develop export standards for agricultural produce. To test the feasibility of this particular venture, some standards have been tested, resulting in favourable outcomes in nearby markets. This effort intends to facilitate international exports and benefit the Nigerian economy. In line with this, a technical committee has been formed to refine the commodities trading ecosystem, with a focus on grading and international standards.
Aside from its endeavour to boost the agricultural sector, Nigeria has been aiming to become self-sufficient in refined petroleum as well as to become a net exporter of fuel. This is backed by the inauguration of Africa’s largest oil refinery located in Lagos. The US$ 19 billion (₦ 14.3 trillion) facility has the capacity for refining 650,000 barrels per day and could revolutionise Nigeria’s oil and natural gas sector. Some experts are hesitant to bank on the newly opened refinery, stating that the rampancy of oil theft in Nigeria coupled with limited crude production may hamper the facility’s capabilities. Regardless, it’s seen as a defining moment for Nigeria’s energy sector and has the potential to transform the region and international energy markets.
OVERCOMING GROWING PAINS
Nigeria has made leaps and bounds to facilitate growth in its commodities sector. However, there are still some obstacles to be overcomed to unlock the nation’s full potential, such as a lack of standardisation, limited refining capacity, oil theft, import dependency, regulatory challenges, and more. Addressing these challenges requires coordinated efforts in regulation, infrastructure, and security. Doing so would not only revitalise Nigeria’s commodities sector but also contribute to broader economic development, job creation, and global competitiveness.