Africa’s biggest economy is among the five countries in the continent’s ranking of the most vulnerable to energy shocks, a new survey by a global market research firm has said.
Euromonitor International’s first global energy vulnerability index shows that Nigeria ranked fourth in Africa, behind Angola, Cameroon, and Ghana. The country also ranked 42nd out of 100 countries.
The 2023 index which revealed individual countries’ exposure to energy shocks used six groups of indicators to measure each country’s level of energy vulnerability.
The indicators are energy self-sufficiency, alternatives to fossils, energy reserves potential, energy accessibility, energy efficiency, and economic resilience.
Higher ranking corresponds to greater vulnerability to energy pressures while lower values reflect stronger resilience
“Nigeria scores relatively high in two pillars energy self-sufficiency (21st) and energy reserves (16th), thanks to its rich oil resources and production of natural gas,” Lan Ha, head of Practice for Economies Research at Euromonitor International, said.
She said however, the country’s performance is low in the category of energy accessibility (98th – reflecting its low share of the population with access to electricity – 59 percent of the total population) and economic resilience (96th – reflecting a lack of economic strength to withstand energy shocks given its lower income level).
“Energy efficiency (94th – In 2022, the value of gross domestic product produced per tonne of oil equivalent of energy supply stood at $2,852, significantly lower than the average of $3,727 for the Middle East and Africa region),” she added.
The index also revealed that Norway, Canada, Australia and the US ranked at the top of the index due to their strong energy self-sufficiency, ample energy resources, diverse energy mix, and high economic resilience.
“At the other end of the table ̧ Belarus and Lebanon rank at the bottom as both countries lack energy resources and struggle with poor energy efficiency and economic uncertainty,” it said.
According to Euromonitor, Singapore and Hong Kong also rank among the bottom 10 performers because of heavy reliance on energy imports despite their good scores in energy efficiency and economic stability.
“The smaller size of Singapore and Hong Kong also limits renewables capacity, adding to the city-states’ weaknesses.”
Overall, economies that are heavily reliant on imports, with low adoption of renewables, weak energy efficiency and economic instability are more vulnerable to energy risks, according to Aleksandra Svidler, consultant for economies at Euromonitor International.
“Many African countries continue to grapple with underdeveloped infrastructure, poor access to reliable and affordable energy and low investment while developing Asian economies continue to struggle with low self-sufficiency rates, high dependency on fossil fuels and limited access to capital,” she said.
The index is designed to help leaders and businesses assess and benchmark a country’s energy security, providing insights into potential risks, challenges, and opportunities in the markets where they operate or plan to expand into in the future.