Huge Power Sector Potential, But Risks Abound
BMI View: While we have long believed that Nigeria has almost unmatched power sector growth potential based on strong fundamentals, our optimistic outlook is tempered by the entrenched and considerable risks to doing business in the country. As such, it is enlightening to look at our power sector Risk/Reward Ratings for Nigeria. To this end, the rewards side of the equation continues to be more favourable to Nigeria than the risks side, with the country's power sector privatisation drive appearing to be gaining traction, despite long-held concerns about the country's operating environment.
Nigeria's overall score reflects the country's healthy economic growth prospects but the still-modest size of the power market - highlighted by recurrent power shortages. Risks are generally high in industry terms and only slightly less significant on the country risks side of the equation - reflecting issues ranging from deep-rooted corruption and persistent insecurity to vested interests and fuel-related bottlenecks.
|Rewards Underscore Nigeria's Potential Within SSA|
|SSA Power Industry Risk/Reward Ratings, Scores Out Of 100|