Generator sales in Nigeria to hit N151bn by 2020

Importation of generator sets in
Nigeria is expected to grow to
about N151.16 billion ($950.7
million) by the year 2020
according to data published by a
global research firm, GBI
Research.
According to the research firm,
Nigeria which is the largest market
for diesel and gas generator sets
in Africa, is forecast to see growth
rates of 8.7 per cent driving up
market volume from N71.55
billion ($450 million) in 2011, to
reach N151.16 billion ($950.7
million) by 2020.
The research firm expects the
growth in the Nigerian generator
sets market to be driven by the
epileptic power situation in the
country going by the current state
of power generation, power
transmission and distribution
networks, along with the
economic growth in the country.
Aman Madhok, Energy Analyst,
GBI Research, said, “Sustained
growth is driven by increasing
electricity consumption, which has
been growing at eight per cent per
annum over recent years, and the
inability of the Power Holding
Company of Nigeria (PHCN) to
supply adequate power to meet
demand.”
He stated that Nigeria is seen as
providing a profitable market for
manufacturers of generator sets,
especially with imports of the
products increasingly coming from
China and the United Kingdom.
He said, “The Nigerian market
provides considerable
opportunities for generator set
manufacturers, with good growth
recorded between 2006 and 2011,
although it experienced a slight
decline in 2009 after reaching a
peak of N65.476 billion ($411.8
million) in 2008.
“The extent of market growth for
gas generator sets in Nigeria
depends upon the timely
implementation of a gas
infrastructure in the country.”
According to the report, in 2007,
only around 15 of the 79 power
stations in Nigeria were fully
functioning, disclosing that most of
the power stations were built in
the 1970s and 1980s.
The report said low gas prices and
an abundance of available gas are
two major drivers for gas
generator sets in Nigeria, adding,
however, that a lack of adequate
gas infrastructure in the country
acts as a major hindrance for gas
generator sets in Nigeria.
It added that despite the fact that
the use of gas generators is on the
rise, the Nigerian generator set
market is still dominated by diesel
generators.
Madhok noted that gas generators
currently contribute only a fraction
of market total revenues in the
Nigerian market.
He said, “Nigeria’s generator
market grew at a Cumulative
Annual Growth Rate (CAGR) of 5.6
per cent between 2006 and 2011,
reaching $450 million, despite
experiencing a slight decline in
2009 due to the global economic
recession. Growth of the market,
however, improved in 2010 and
2011.”