Business challenges in nigeria what is bta

bettervest magazine

Why is the electrification of rural areas in Nigeria so fertile? In connection with the bettervest projects in the Nigerian villages of GbamuGbmau and Tunga Jika, we would like to give you an overview of Nigeria's situation and explain the important role decentralized electricity plays.



Nigeria, the most populous country in Africa, faces many challenges: the urban-rural gap is growing, the northeast of the country is marked by religious tension and political unrest, and then there is dependence on the oil industry. But the country also has many sunny sides. Nigeria has the highest gross domestic product in the entire continent, making it the largest African economy. Compared to the rest of Sub-Saharan Africa, Nigeria has a relatively high per capita income of USD 6,003.9 (measured in purchasing power standards). In general, the country has positive prospects for the future.


From the cultural center to the flourishing science

We have taken a closer look and show you that there is, for example, exciting things to report on both a cultural and a scientific level.

The Nigerian film industry is booming. The volume of the so-called “Nollywood” overtook its North American forerunner on the other side of the Atlantic in 2009 and was thus crowned the second largest film industry in the world. Thanks to Nigerian ingenuity and low production costs, around 2,500 films a year can be produced at turbo speed. With stories about a pre-colonial past and a present caught between village life and urban modernity, Nollywood is resonating across Africa.

Nigeria can also shine in science. A new innovation was discovered by observing the Mimosa Pudica plant. The leaves of the plant open at sunrise and close at sunset. Professor Justus Nwaoga, from the University of Nigeria, investigated this natural phenomenon and researched the cause of this photovoltaic behavior in order to isolate the responsible material. As a result, the chemical component "black silicon" was discovered, which is already used in the first prototypes to generate clean energy.

Nigeria is a country full of entrepreneurship and ingenuity, which is particularly fruitful in the cities. But there is a lack of sufficient infrastructure and targeted capital to allow these properties to come into their own in rural areas.


Strong urban-rural divide

Of the more than 180 million inhabitants, 52% live in rural areas. In contrast to other emerging economies, Nigeria's rural population has grown by 2.7% annually since 2000 (McKinsey, 2014). It is alarming that Nigerian children from the city are allowed to go to school almost 5 years longer than children from rural areas. It is therefore not surprising that, according to UNESCO, 35% of 15-25 year olds in rural areas are illiterate. In the city, however, it is only 7%.

The fact that more than half of the population lives in rural areas is only a problem if their chances of advancement continue to be reduced by denied access to education and a lack of infrastructure.

Overall productivity needs to improve a lot

Agriculture is Nigeria's largest industry with 20.9%. More than 85% of the arable land in Nigeria is cultivated by small farmers who do not cultivate more than 2 hectares. There is a lack of the necessary infrastructure to store fresh goods and to bring them quickly to the buyer via good roads and reliable train lines. Due to the lack of cooling technology and the inefficient supply chain, 20-50% of the products spoil on the way to the market.

Many farmers do not own processing, storage and marketing facilities. For this reason, farmers usually do not convert the harvested raw materials into high-quality products themselves, but sell them to middlemen. Thus, they are at the lower end of the value chain and only capture a fraction of the final value, while the middlemen and processing companies capture the high margins. The manufacturing and manufacturing industries represent only 9.6% of the gross domestic product. This is rather small compared to other emerging markets such as Thailand, Brazil or India.

This area is therefore extremely in need of expansion. In order to operate small workshops and factories, a reliable power supply is a must. Due to the insufficient range, rural residents can currently only be supplied with electricity from the public grid to a very limited extent. In 2016, only 45% of Nigeria's population had access to electricity. A decentralized power supply for villages is a key factor on the way to more economic autonomy and a higher quality of life for the local population.

The path from black gold to green electricity

The country's unmistakable oil dependency often makes negative headlines. With a share of 71%, crude oil is the country's most exported good (2015). Still, the Nigerian is not just an oil dominated economy. In addition to agriculture, trade (19.2%) and the information and communication sector (11.5%) are their biggest drivers. With the spread of solar power, these sectors could grow and expand even faster. Nigeria would then be less dependent on oil exports and at the same time could make a major contribution to climate protection and the global energy transition. This is exactly the goal that Rubitec Ltd and Nayo Tropical Technologies in GbamuGbamu and Tunga Jika want to achieve with the help of the crowd.

Tunga Jika, GbamuGbamu and the renewable revolution



Tunga Jika is located in the western part of the Niger state and has a very high solar potential with a solar radiation of 1900 - 2100 kWh / m2 in one year. The village is a lively and relatively prosperous center with around 4,000 inhabitants, a large market that supplies the surrounding villages and with many productive manufacturing facilities such as mills for processing agricultural products. All of these and others, such as local welders and restaurants, are to be supplied by the new solar system.

GbamuGbamu also has a relatively large market, which supplies the village and the surrounding areas with goods and food. The village is located in the southwest of the country and has over 3,000 inhabitants. GbamuGbamu has a high application potential through milling activities, mills and machines that are currently still operated by diesel generators. A conversion of this to green electricity will take place with the installation of the solar grids. In this way, not only is the sun's potential exhausted, but also the efficiency is expanded.

Both projects ensure that companies can do without expensive and dirty fuel in the future. They will increase their productivity, expand their businesses and thus be more competitive. With the use of solar grids, life will also change enormously for the residents of the two villages. Cell phones can be conveniently charged at home, your wallet will no longer be burdened by expensive fuel, the risk of fire is greatly reduced and food can be stored fresh in cooling systems. Families can enjoy Nollywood films together in the evening and the children can, even when it gets dark, continue to work diligently on their homework so that they can later become entrepreneurs, inventors, teachers or doctors.

The projects are intended to contribute to a small renewable revolution. They are intended to serve as pioneers for a whole range of other mini-grid solutions (small island grid solutions) that will contribute to the electrification of rural areas in Nigeria and thus supply over 150,000 people in over 30 counties with energy and career opportunities over the next ten years.