The Nigerian Electricity Regulatory Commission (NERC) regulates the business of electricity generation, transmission, distribution and marketing in Nigeria.
Electricity is supplied directly to customers by the distribution companies (popularly called DisCos) which cover specific geographical areas as shown in the table below. There is also provision for licensing Independent Electricity Distribution Networks (IEDN) in addition to the DisCos.
The Multi-Year Tariff Order (MYTO) is the methodology adopted by NERC for setting electricity tariffs in Nigeria. It provides a 15-year tariff path with annual minor reviews, and major reviews every 5 years.
Customers are classified into any of the following tariff classes:
A customer who uses his premises exclusively as a residence i.e. house, flat, or multi-storey house.
A customer who uses his premises for any purpose other than exclusively as a residence or as a factory for manufacturing goods.
A customer who uses his premises for manufacturing goods including welding and ironmongery.
Agriculture and agro-allied industries, water boards, religious houses, government and teaching hospitals, government research institutes and educational establishments.
Street Lights (S)
Coverage area and average tariffs per distribution company
|Distribution Company||Coverage Area||Average Tariff (Kilowatt per hour)|
|Abuja||Abuja, Nassarawa, Niger, Kogi||NGN 33|
|Benin||Edo, Delta, Ondo, Ekiti||NGN 33|
|Eko||Lagos South & Agbara (Ogun)||NGN 28|
|Enugu||Anambra, Enugu, Abia, Imo, Ebonyi||NGN 35|
|Ibadan||Oyo, Ogun, Osun, Kwara||NGN 31|
|Ikeja||Lagos North||NGN 27|
|Jos||Plateau, Bauchi, Gombe, Benue||NGN 34|
|Kaduna||Kaduna, Kebbi, Sokoto, Zamfara||NGN 33|
|Kano||Kano, Jigawa, Katsina||NGN 30|
|Port Harcourt||Cross River, Akwa Ibom, Rivers, Bayelsa||NGN 34|
|Yola||Adamawa, Yobe, Borno, Taraba||NGN 27|
In order to improve power supply, NERC has developed a regulation on embedded generation which allows for power generation plants (including renewable energy) to be directly connected to and evacuated through a distribution network. It provides a window for investors, communities, state and local governments to generate and sell/utilize power without going through the transmission grid. In addition, the commission developed a mini-grid regulation which seeks to provide an improved power supply in un-served and under-served locations in the country, especially the rural communities.
Rural Electrification Agency (REA)
REA is a Federal Government Agency saddled with the responsibility of providing electricity to rural communities in Nigeria. Here, you will find information on the Agency’s activities, event line up and rural electrification projects.
The Rural Electrification Goal of the Federal Government of Nigeria is to increase access to electricity to 75% and 90% by 2020 and 2030 respectively and at least 10% of renewable energy mix by 2025, fully utilizing the Rural Electrification Policy (2005) & National Electric Power Policy (2001). Rural Electricity Users Cooperative Societies (REUCS) are expected to own, operate, and maintain Rural Electricity Systems mainly in Cooperation with DisCos and other professional private sector companies providing the know-how required to operate such systems. It is REA’s sustainability platform.
The procedure for obtaining electricity is as laid out below:
- The new consumer, through their licensed electrician, completes a new service application form requesting electricity supply from their distribution service centre. It is important for the customer to provide accurate information on their appliances to enable the DisCo determine the appropriate type of meter supply (single or 3-phase).
- The DisCo conducts an installation inspection of the consumer’s location to assess the electrical wiring, confirm the electricity load requirements and assign the appropriate customer class.
- The DisCo issues a list of required connection materials to the customer.
- The customer purchases the required connection materials and presents them to the DisCo Service Centre for quality validation.
- The Service Centre effects the connection at the customer premises within 48 hours, in addition to providing a meter and meter accessories.
The customer does not pay meter or installation costs as these are already covered by the electricity tariff.
See Link: Disco Tariffs
Responsibility for water supply is shared between the Federal, State and Local Governments. The Federal Ministry of Water Resources provides policy advice, monitoring and coordination of water resources development, while the State Water Agencies (SWA) are responsible for actual urban, semi-urban and rural water supply.
In Abuja, the source of urban water supply is not boreholes but surface water treatment system (River Usuma) then to our dam and treated for supply into our networks for customers. There are two types of water billing in Nigeria. Flat rate billing is allocated to the property type based on the estimated consumption per billing cycle. Meter rates on the other hand, help the government measure the actual consumption of water, and bill on that basis.
Water rates vary from state to state.
The table below shows the water rates in Lagos and the Federal Capital Territory (FCT)
|FCT Water||Lagos State|
||$0.41 per m3
||$83.5/month||$0.97 per m3||5.56*/month|
||$0.22 per m3||$11/month||$0.70 per m3||$2.78*/month|
*Flat rates in Lagos are dependent on the property size. The above flat rate billing applies to standard 3-bedroom properties and will increase according to the size of the property.
FCT Water Board: The Procedure for Connection
- The customer completes a water connection form. This form may be obtained free of charge from any of the Area offices or Headquarters.
- The customer submits the completed form with all attachments such as proof of ownership of the property
- The FCT Water Board inspects the property and advises on the materials needed and size (diameter) of pipe-connection available/suitable in the area.
- The customer pays water connection fees to the bank and submits the teller for connection.
- The Water Board lays relevant pipes and meters (where applicable) and connects water(within 2 weeks maximum)
Lagos State Water Board
Generally, especially in urban areas, boreholes are a major source of water for commercial and residential properties. However, the policy of the Lagos State Water Corporation (LSWC) is to meter all properties even where water comes from boreholes installed by the property owner, starting with commercial/industrial ones and this is being done gradually.
There are four major GSM (Global System for Mobile communication) operators in Nigeria: Airtel, Globacom, MTN and 9mobile with a combined subscriber base of about 150 million. The launching of GSM in the country has significantly improved the country’s domestic and international telecommunication services. Fixed Wired and Wireless services are provided by Visafone, Multilinks, MTN, Glo, Ntel, ipNX and 21st Century.
Under the current unified licensing regime, which was introduced by the Nigerian Communications Commission in 2006, there is no more segmentation of wireless licences into mobile and fixed service categories. On allocation of a spectrum, all licensees are free to offer voice, data or multimedia services as they deem fit. This harmonised platform has led to increased competition from all the telecommunication service operators in the country.
Each telecoms provider has an array of voice and data plans for customers to choose from. The number of internet users in Nigeria is about 90 million (or 53% of the population), which is the highest in Africa. Data services are provided by the afore-mentioned GSM operators, as well as several Internet Service Providers (ISP). Many of these offer fibre-optic services across the country, with 4G LTE available in Lagos, Ibadan, Abuja and Port Harcourt. Data plans vary by ISP, city, duration and choice of plan but monthly subscriptions start around $5.60 (excluding the cost of the modem).
|On-net calls||USD||0.0003||2018||per second|
|Off-net calls||USD||0.0003||2018||per second|
|Local SMS||USD||0.0111||2018||per unit|
|International SMS||USD||0.0416||2018||per unit|
With 195,000 km of roads, Nigeria has the largest road network in West Africa, and second largest South of the Sahara. About 32,000 km of these are federal roads; 31,000 km are state roads, while the rest are local government roads.
The road transport system remains the most widely used transportation system in the county, accounting for 90 percent of commodity movements to and from the seaports, and other internal movements of goods and persons. The federal road network accounts for about 70 percent of the national vehicular and freight traffic.
The Federal Ministry of Works is currently working to improve various sections of the Federal Highway network and has given top priority to the North-South, East-West routes used for the distribution of goods and services across the country and major bridges. Also prioritised are roads which link major routes, factories, agricultural producing hubs, mining depots, major ports and mineral producing areas.
The Trans-Africa Highway
The Trans-Africa Highway is a network of nine (9) highways being developed to connect all regions of Africa. It aims to give every African country access to markets and ports and alleviate poverty through the development of highway infrastructure and management of road-based trade corridors. When completed, the total length of the highways will be over 56, 000km.
Nigeria is strategically located along four routes of the highway:
- The Trans-Sahara Highway which starts in Lagos, passing through Niger to Algeria
- The Trans-Sahelian Highway (Dakar to Ndjamena) passes through 7 countries and 5 national capitals.
- Trans-West African Coastal Highway starts in Nigeria and connects 12 West African nations to link Dakar
- The Lagos to Mombasa Highway which will be the principal route between West and East Africa
Nigeria’s railway system has 3,505 route kilometres and 4332 track kilometres, most of which is Cape gauge. The country has two major rail lines: a western line connecting Lagos to Nguru in Yobe state, and an eastern line connecting Port Harcourt to Maiduguri.
The Lagos–Kano Standard Gauge Railway is being built in segments to replace the Western Cape gauge line. The Abuja-Kaduna line (186km) has been completed and commissioned; the Ajaokuta to Warri Line (277km) is nearing completion, while work has commenced on the Lagos – Ibadan line (180km).
10 new standard gauge rail lines are currently being planned, and these will cover a travelling distance of 3,421 km when completed. The Abuja – Kaduna rail is Nigeria’s first high speed rail, travelling at 150km/h.
Several metro systems – such as the Abuja Light Rail, Lagos Rail Mass Transit and Rivers Mono Rail – are under construction, while the Calabar Mono rail was commissioned in 2017.
|Abuja to Kaduna||Naira||900||2017||First Class (Adult)|
|Abuja to Kaduna||Naira||450||2017||First Class (Children)|
|Abuja to Kaduna||Naira||600||2017||Second Class (Adult)|
|Abuja to Kaduna||Naira||300||2017||Second Class (Children)|
The Federal Airports Authority of Nigeria operates five (5) international airports, located in Abuja, Lagos, Kano, Port Harcourt and Enugu as well as eighteen (18) domestic ones. Passenger traffic at these airports in 2016 alone was 15 million.
Nigeria has bilateral air services agreement with eighty-eight (88) countries, with direct flights to North America, several European and African countries as well as connecting flights to the rest of the world.
The existing airport infrastructure is being expanded, and eleven (11) airports are currently being upgraded to international standards.
|Port Harcourt||Naira||25,200||2018||Economy Class|
|Port Harcourt||Naira||45,000||2018||Business Class|
Nigeria has 8,600 km of inland waterways. The longest are the Niger River and its tributary, the Benue River but the most used, especially by larger powered boats and for commerce, are in the Niger Delta and along the coast from Lagos Lagoon to Cross River. Major transportation routes link the six major sea ports – Apapa, Tincan, Warri, Port Harcourt, Onne and Calabar – and other river ports and jetties.
There are 10 crude oil terminals. Nigeria records about 2,000 petroleum vessels, 35,000 vessels (excluding tankers) and cargo (excluding crude) averaging 80 million tons annually.
Twenty eight (28) of the nation’s thirty-six (36) states can be accessed through water. Nigeria can also link five neighbouring countries – Benin Republic (Port Novo), Equatorial Guinea, Cameroon, Chad and Niger Republic by water.
Current initiatives in the maritime sector include capital and infrastructure improvement, channel dredging and maintenance and installation of safety facilities aimed at increasing the share of water transportation. Nigeria is currently expanding existing ports and building 5 deep sea ports in Lagos, Ogun, Delta, Bayelsa and Akwa Ibom states, one of which is expected to be the largest in Africa.
Opportunities in the Nigerian Maritime Sector
Thus, emerging opportunities in the Nigerian maritime sector include the following:
1. Manpower and Human Capacity Development:
The maritime industry is highly labour and capital-intensive, and as such requires adequate funding, government support and policy consistencies to solve the manpower challenges it currently faces in Nigeria. One of the areas of Focus of the Federal Ministry of Transportation is ensuring adequate human capital development in the sector with special intervention for seafarers development to close up the existing gap in the industry. Recently NIMASA sponsored a total of 289 cadets for sea time (on board training) in Europe and Egypt under the Nigeria Seafarers Development Programme NSDP. Recent government efforts to fund the establishment of maritime institutions across the country are welcome developments that are worthy of commendation. Interventions such as this will definitely boost manpower development in the industry. Equally, collaboration between the various agencies in the industry, in carrying out their responsibilities, will raise the operational performance and efficiency of the sector.
2. Maritime Infrastructural Development:
A number of factors are responsible for the development of seaports and the supportive logistics infrastructure in Nigeria. This emphasises that maritime infrastructural development is a function of reaction to economic dynamics and global changes, which currently requires the urgent need to restructure and reposition for efficiency and functionality. In Nigeria, maritime infrastructural development, especially seaports, is often determined by:
- Increase in merchandise trade, particularly seaborne trade, which suggests for either the modernisation or expansion of port infrastructure and facilities;
- Congestions or delays in the rendering of services, as a result of operational inefficiency, overutilisation of port capacity and shortage in human capacity;
- Technological innovations put in place to support manpower (in terms of containerisation, roll-on-rolloff needs, very large tanker vessels, draft level) and/ or;
- International conventions compelling signatory nations to effect and respond to developments. These determinants mentioned above somehow justified the response of the Federal Government to maritime and port-related infrastructure development, either through policy reforms, improvement in foreign direct investment, increased production volumes of crude oil and gas, environmental safety, financing, especially the Cabotage Vessel Finance Fund (CVFF) and shipyard building and repairs.
3. Globalisation and the Application of New Technology:
The application of innovative technology is possibly the strongest determinant of development in any maritime industry. From operational re-engineering to the architectural design of vessels, and dredging in an attempt to increase water draft levels within complex international trade development, there is indeed heavy reliance on technological interventions, as they affect virtually every aspect of maritime transportation. There is need for a constant response to the dynamics of technology and the globalisation tendency by the Nigerian government, all in an attempt to pursue sustainable maritime industry growth that could support international trade.
4. Maritime Research and Development:
There are numerous areas of research need associated with the maritime industry. NIMASA has established various maritime institutions designed to provide maritime education and research support to the industry. However, the absence of training vessels for practical application of theoretical knowledge remains a major setback, as this is imperative for professional qualification in the industry. The establishment of national fleets is suggested to provide onboard experience to prospective seafarers. Also, industry operators/stakeholders should be incentivised to conduct research that would benefit the industry, while more joint venture partnerships with foreign companies should be entered into, to facilitate the exchange of research ideas.
5. Maritime Security:
The International Maritime Bureau reports that in 2016, the Nigerian waters were largely unsafe due to the persistence of kidnapping incidents, as a direct result of the presence of pirates on these waters. While some progress has been made in boosting security in this area so far, there is still the need for greater focus in the efforts of security agencies in curtailing the occurrence of these incidents. There has been the renewed push for the naval police and Maritime Patrol Aircraft to be adequately equipped with modern arms and vehicles for the effective containment of criminal elements in our waters.
There is an equally the intensified drive for continuous investment in maritime security, as well as the creation of an enabling environment for the attraction of investors through maritime tourism and marine agriculture, towards sustainable development.
6. Marine Agriculture:
The increasing demand for food and water creates an opportunity for mariculture as a result of Nigeria‘s growing population, without an increasing pressure on terrestrial and marine habitats. Aquaculture, done well, offers a huge potential not just for producing food, but also providing livelihoods to coastal communities and in the effort to recover lost ecosystem services. The development of marine agriculture would be enhanced by improved security, the ratification and implementation of Port State Management Agreement (PSMA) and the formulation of a protectionist policy for investors-all presently being considered by the relevant authorities.
7. Marine Insurance:
In spite of the rapid growth of Nigeria‘s maritime sector, existing marine insurance products available in the country are considered to be primarily simple in structure and may not suit the needs of the fast-changing global market. In this respect, marine insurance companies could offer innovative products to provide comprehensive insurance solutions and innovative marine insurance products in order to serve Nigerian interests in overseas markets better. In this respect, any insurance company in Nigeria with the experience of insuring infrastructural projects, such as ports and related infrastructure development, should find a wealth of opportunities in offering tailor-made and advanced insurance products suitable for serving the needs of the shipping community.
8. Marine Tourism:
Tourism demand is increasing worldwide, and there are opportunities for investors and the government to exploit Nigeria‘s coastal and maritime resorts for revenue generation and job creation. These opportunities include the creation of a marine mall, cruise ships and the fostering of marine sports. With the enabling government policies, improved security, and enhanced safety operations driving the growth of marine tourism, this can be a huge area of opportunity going forward. .
9. Waste Management:
Control of the negative environmental impacts of a construction project in a marine environment, ensuring the pro-activity of the infrastructures and seizing the benefits associated with their presence at sea, in order to enhance specific ecological functions and marine biodiversity is also an area of opportunity in the maritime industry in Nigeria. These services include the design, construction, and supply of solutions for the restoration and enhancement of marine biodiversity, ecological integration of maritime infrastructures, support of fisheries and leisure activities, ecological restoration of damaged marine areas and coastal adaptation to climate change. These opportunities would be driven by improved policy development in terms of remediation for safety and management. Till date any discussion of the Nigerian ocean economy is narrowed down to the traditional domain of shipping, fishing and offshore oil and gas. Critical issues for the next three years in this regard, include:
ii. Mapping and Development of Marine Ecosystems
iii. Mapping and Development of Ocean Economy Intermediaries
Find out more…
The table below shows indicative freight rates of laden containers to and from major trading routes.
SIZE OF CONTAINER 10FT 15FT 20FT 40FT
|North/West Africa||$392||$413||$782||$817||$782||$817||$2,202||$ 1,595|
|South America/ Mexico||$1,203||$903||$2,405||$1,805||2,405||$1,805||$3,805||$ 2,380|
|North America/ Canada||$1,405||$988||$2,810||$1,975||2,810||$1,975||$4,135||$3,263|
|Far East/ China, Japan||$1,544||$282||$3,088||$1,657||3,088||$1,657||$4,736||$2,829|
|Far East/ India, Australia||$1,916||$3,835||$3,835||$1,760||3,835||$1,760||$6,086||$3,300|
The Cost of Living in Nigeria varies from city to city, with Lagos, Abuja and Port Harcourt being the most expensive. Prices in the table below would generally apply to these cities, and are accurate as at November 2017.
|Eggs||USD||1.68||2018||Pack of 12 eggs|
|Chicken Breasts||USD||3.54||2018||1 kg|
|Beef Round||USD||3.95||2018||1 kg|
|Bottled water||USD||0.45||2018||1.5 litres|
|Domestic beer||USD||0.84||2018||0.5 litre bottle|
|Imported beer||USD||1.77||2018||0.33 litre bottle|
|Coca Cola||USD||1.18||2018||2 litre bottle|
What Investors Think
Investors expressed the desire for a more consistent and predictable government policy as regards to infrastructure development. They stressed the need for speedy improvement in the power generation and distribution to reduce operating costs and create competititve market.