Financing Effects of Global Economic Crisis on Energy Investments in Nigeria: A Comparative Analysis of Pre-Crisis and Crisis Era

Abstract

The energy sector is recognised as one of the most crucial real sectors in any economy,
considering the dependent nature of other sectors' development on its growth. The
emergence of the global jinancial crisis that engulfed most African nations is one of the
greatest threats to energy development in terms of investment andjinancing options despite
the "resource curse" confronting most of the resource-endowed economies like Nigeria.
This has motivated this study to examine the impact of the global jinancial crisis on energy
investment and financing in Nigeria between the pre-crisis era (2000-2005) and the crisis
era (2006-20/0). The descriptive and graphical analysis employed revealed that between
the pre-crisis (2000-2005) and during crisis era (2006-20/0) total energy investment by
both private and public sectors declined by 75.2% andthis negatively affected most energy
development indicators such as the hydro power generation capacity from Kainji, Jebba
and Shiroro; total electricity production per capita; total electric power consumption per
capita; and net oil proceeds to national output in Nigeria. Following these findings, the
study recommends that joint partnership agreement between the private (both foreign and
local institutional investors) and public sectors should be implemented to undertake most of
the abandoned energy projects due to lack ofjinance, via a "Build, Operate, and Control
(BOC) " system in order to revamp the energy sector development by 2020.