Sustainable development, which connotes advancement that meets present needs without compromising the satisfaction of future generations, is lacking in Nigeria. The challenge of sustainability in the country’s development has stalled due to the lack of local content development in critical sectors over the years. For instance, Many engineering students graduate from Nigerian universities and polytechnics yearly after working on various technical projects. Some of these projects have strong potential to be relevant in Nigeria’s off-grid industry but end up in the archives without further development, exploration and support needed to become actual products that support the growth of locally made off-grid energy technologies. Similarly, many local engineers only end up as artisans because of the lack of manufacturing opportunities since utilities import most components used in industries, including off-grid electricity.
Nigeria’s growing off-grid industry still has a chance to break the mould of unsustainable development by building local capacity. Data from the United States African Development Foundation shows that over 900 million Africans live without regular electricity access, 120 million living in Nigeria. As a leverage point to address this power deficit, solution providers resort to spending approximately $1.3 billion in solar equipment importation, and this increases yearly.
Sustaining affordable and low cost off-grid renewable energy solutions require the input of local manufacturing of solar equipment. Asides from affordability and low sales price, the future of maintenance and transition to new technologies are at stake. Reliance on foreign imported products has not only tainted our forex and human capital development, but it has also ridiculed our maintenance culture for the deployed solar energy systems. This situation, although bleak, presents an opportunity to power the population through local content materials instead of the continuous total dependence on importation.
We can Learn from Existing Manufacturing Giants.
It is convenient to only opt for near-term solutions to solving electricity challenges by relying solely on imported devices. However, it might be worthwhile to study the development strategies and successes of a classic development case study of localisation of technologies like China and adapt where possible.
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Henry Byers’ analysis of China’s economic shift says a lot about how the localisation of technologies can be a game-changer. In 1985, Deng Xiaoping, the then leader of China, began working on the country’s vital economic reforms by capitalising on the Chinese low-cost labour force, paving the way for direct foreign investment. As a result, China’s economic growth became massive from that point onwards. Consequently, many United States companies chose to outsource production to China as it helped them save a significant amount of money on labour. These actions and consequent investments snowballed into positive effects for the Asian giant. By 2018, China was officially the world’s second-largest economy by GDP and has remained the number one in Asia by GDP, having overtaken Japan.
Today, Nigeria and several African countries are in the same discourse as China in 1985. Then, the typical indicators of low-cost labour, numerous natural resources, a vibrant young population and patriotic citizens could be observed in both cases. But, unfortunately, we have been dwelling on the inefficiencies of the variables in our discourse for years, with few notable changes. The same is beginning to play out in the renewable energy industry.
Some Local Manufacturers are Breaking the Mold.
Many Nigerian renewable energy companies and stakeholders import even minor components that can be mass-produced in Nigeria. However, all hope is not lost as a few Nigerian innovators are working to break the mould. Greenage Technologies is a key example of such innovators.
Greenage Technologies, Enugu, researched and developed to mass-produce solar energy equipment in 2017. Mostly supported by local patriots, The company developed competitive inverters with capacities from 1.5 to 30 kilovolts Amperes (kVA). In addition, they have developed a semi-automated production unit capable of producing over 100 units of inverters and charge controllers daily.
Through local partnerships and sales, Greenage Technologies has provided over 550 units of the made in Nigeria inverters across 22 states in Nigeria since market entry in 2019. In addition, the company has contributed 2.3 megawatt-hours of solar to the ecosystem, providing solar energy solutions for several hospitals, schools, homes and businesses.
Auxano solar is another example of repute for local content in Nigeria’s off-grid renewable energy space. Located in Lagos-Nigeria, Auxano assembles locally and boasts significant sales from some renewable energy developers across the country. In addition, the company recently received $1.5 million in funding from All On, an impact investment company, to improve the capacity of its assembly plant.
Although these local manufacturing/assembly companies exist and have obtained some support, they are only scratching the tip of the iceberg regarding the potentials of local capacity in Nigeria. With the right support from other stakeholders in the off-grid energy industry, including the Government, local manufacturing of components in Nigeria will outgrow their current production capacities and even provide components for foreign off-grid companies providing electricity solutions in Nigeria.
Way Forward for Building Local Capacity.
As a glimpse of encouragement, the country has announced its 5 million new solar-based connections in communities that are not connected to the grid with an expectation to generate over NGN7 billion increase in tax revenues per annum and $10 million in annual import substitution. However, going through the framework for implementation reminds many of the Nigerian Enterprises Promotion Decree or NEPD of 1972 as amended in 1977, which failed to keep us on the development track.
Many ask; how many of the local manufacturers have been visited since releasing the framework in September 2020? How many negotiations have included manufacturers in the discussion for direct funding as the United States government did in December 2008 (the US government invested $51 billion in General Motors in 2008 and 2009)? Instead, we are still towing the old ways that yielded less than optimum result. We are still ready to sign out more cheques and cash to unsustainable practices with no solid developmental base for future growth of the sector.
The truth is, if the CBN solar connectivity fund sought through the Rural Electrification Agency isn’t channelled directly through local manufacturing companies without typical government bureaucracies and biddings, all the solar connections made will be as dilapidated within 5-10 years. This trend was previously observed with abandoned Nigerianrailway, or become the ever “undergoing construction caricature” on Nigeria roads by the Government annually and on election campaigns.
Given the above context, I will therefore suggest the following as the growth pathways for off-grid energy deployment:
a. Total local content deployment for off-grid renewable energy equipment by government agencies such as REA, other government projects by MDAs while also making the bit commercially competitive. In addition, this will create local engineers and technologies readily available for continuous maintenance and sustainability.
b. Direct funding of local manufacturing companies in the off-grid sector with production targets and carefully listed strong performance indices. This approach will keep our local companies fully engaged while retaining our money within the country with mass employment creation. In this light, Greenage Technologies has launched the Hardware Garage STARTHARD innovation call, seeking hardware startups in the off-grid energy space to support. The STARTHARD initiative will help fund selected projects/innovations and provide them with engineering and development capacity to get their products from the idea/prototype stage to commercialisation. The Government should consider embarking on or supporting such projects like the Hardware Garage initiatives, Magic House Nigeria and few others.
Conclusively, no country can grow beyond the qualities of its people. David and James, in their book, “Why Nations fail: The Origins of Power, Prosperity and Poverty (2013)”, summarises it as follows; Nations fail today because their extractive institutions do not create the incentives to save, invest and innovate. It is our choice to make. Today, the choice is ours, and supporting local manufacturing would contribute to a sustainable future in the off-grid sector and renewable energy in general.
