A new report by GlobalData claims that insufficient power supply and infrastructure are damaging the growth of many African economies, but are driving the revenues of diesel and gas generator (genset) manufacturers.
According to the company’s latest research, the inability of countries across the African continent to meet the power demands of their expanding industries is resulting in the large scale employment of electricity gensets, with Nigeria at the forefront of the market.
Despite reassurances by president Goodluck Johnson over a year ago, Africa’s most populous country still suffers from two major issues regarding power supply. Firstly, the Power Holding Company of Nigeria (PHCN), the governing body for the use of electricity in the country, generates insufficient power to meet usage levels. Secondly, transmission and distribution (T&D) networks in the country are poor and sorely in need of improvement.
Only 45% of Nigeria’s population has access to electricity, and only 30% of demand is currently being met. 90% of industrial customers, and a considerable percentage of residential and non-residential customers, have their own means of power generation.
The corresponding unavailability of power has led to consumers turning to diesel and gas gensets – exhibited by a 2011 market value of $450m. Climbing at a Compound Annual Growth Rate (CAGR) of 8.7% over the period 2012-2020, this figure is predicted to reach $950.7m by 2020.
As the reliability of electricity in many African countries is low, and the demand for power high, other nations including South Africa, Egypt, Angola and Algeria are also expected to display strong genset growth in the future. The telecom, manufacturing and commercial sectors of these countries are currently experiencing robust growth and increasing the need for continuous power.
GlobalData predicts that if little is done to improve power networks across Africa, the continent could become the next major growth destination for international genset manufacturers.
