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In the absence of
hard data, all manner of conclusions recommend themselves. And nowhere
is this plainer to see than in the economic sphere. Despite the
readiness of the more granular amongst us to take exceptions with
attempts by economists’ to elevate their calling into a science, I
don’t think one can argue against the need to assign responsibility to
some authority to regularly churn out data on the performance of
economies.

Comparisons across
economies based on such statistics allow assessments of the relative
efficiency of resource use. And within economies, they make it possible
to allocate resources more efficiently. While we may yet be reluctant
to grant the sacredness of “truth” to such data, one cannot but note
that in their absence, the commentariat is wont to run riot.

For illustration,
look no further than the Nigerian economy. The sense that most data on
this economy are available, as if from some sorcerer’s hat, has
encouraged all manner of claims, including what has become the most
laughable of the lot – that somehow, there is something in our
constitution that entitles us to be “the giant of Africa.”

Those who cavil at
this claim quickly direct attention to data on the power sector across
the continent. Three years ago, South Africa (with 4,447 kWh/capita)
had the continent’s highest numbers for “electric power (grid)
consumption per capita”. Egypt (1,375 kWh/capita), Algeria (849
kWh/capita), and Kenya (148 kWh/capita) followed in that order.
Nigeria, the slumbering giant, managed 134 kWh/capita.

In terms of the
usefulness of economic data, this set is especially intriguing.
Cross-country comparisons have meaning when you look at other
supporting data. In this case, both the numbers for population and
economic output help. With a population a whisker less than 50 million,
South Africa’s GDP (calculated at purchasing power parity) in 2007 was
estimated at US$496.2bn. Egypt (population, circa 78m) had GDP of
US$418.5bn. Algeria (population, circa 34m) had GDP of US$229.7bn.
Kenya (population, circa 39m) had GDP of US$59.94bn. “The Giant”, on
the other hand, with 149 million people, had GDP of US$303.4bn.

What to make of all
this? Obviously, the South African economy is much larger than the
Nigerian one, in spite of the latter having three times as many people.
Evidently, certain numbers may not matter as much! However, in terms of
the energy efficiency of the different economies, the Nigerian economy
might just be the better one. On the strength of these numbers, we are
doing about 61% of the South African economy while consuming a little
over 3% of the electricity generated there.

It is difficult not
to enter several caveats here. But is it the case that with all that
number ours might be a less efficient economy; throwing so much at the
development problem, and achieving a fraction of the performance of a
much more efficient economy. Put differently, how much does the power
sector add to economic performance?

“A lot!” is the
popular response. However, if we assume, as the organised private
sector is wont to, that the manufacturing sector will be the main
beneficiary of any increase in power supply in the country, then our
hopes in the redeeming power of more electricity might just be
misplaced. At least, this was the impression I got last week, listening
to Bismarck Rewane speak at the monthly business breakfast of the Lagos
Business School. Even if we had all the electricity infrastructure
running at full capacity, what would this amount to, if all
manufacturing activity in the country accounts for about 3% of GDP?

Another way to look
at this problem is to hazard a response to the hypothetical question,
“whether the manufacturing sector would not have accounted for more of
GDP if it had access to steadier supply of electricity from the mains”.
And what about the boost to other sectors of the economy from better
supply of electricity?

I imagine that
telecoms, wholesale and retail trade, and the services sector generally
will benefit from access to better electricity supply from the mains.
Not to talk of the small and medium enterprises subsector. One other
supporting number: one of the leading telcos in the country is reputed
to be the country’s leading seller of pre-owned power generating sets.
It is easy to see how this particular cost head plays, were the power
sector up to scratch.