Assessing Energy Security in Nigeria: Analysing the Interrelationship between Energy Availability and Revenue Performance in the Electricity Sector (2016-2023)

Abstract

The cornerstone of energy security in Nigeria lies in two two-prong stands, energy availability and energy affordability. The persistent issues of electricity availability, poor infrastructure, and financial inefficiencies have undermined the country’s ability to provide reliable and affordable power to its population, with profound implications for economic development and national security. Using the Realist theory to explain how states exercise their sovereignty over energy which they perceive as primary state assets, the study employed a mixed-methods approach to analyze historical data while investigating underlying factors that could explain observed trends thereby establishing the relationship between electricity availability and revenue performance from 2016 to 2023. The findings show a collection illusion where the monetary value revenue per kilowatt has dropped from $0.24 in 2016 to $.03 in 2023. The relationship between electricity availability and revenue performance revealed a moderate positive correlation (r = 0.61) and the regressed model indicated that approximately 55% of the variance in revenue generation could be explained by electricity availability, with distribution efficiency being the most significant predictor. A 1% increase in electricity availability was associated with a 0.8% increase in revenue, although this was tempered by factors such as revenue leakage and low tariff compliance. The electricity-revenue relationship suggests that the availability of electricity directly influences the revenue performance of the sector.