Countries With Cheapest Electricity Tariff In West Africa

Despite the recent surge in electricity tariffs, Nigeria maintains one of the lowest rates in West Africa. Recall that the Nigerian Electricity Regulatory Commission (NERC) raised the cost to N225 per kilowatt-hour (kWh) for Band A consumers, those receiving up to 20 hours of power daily, starting April 3, 2024. This adjustment from the previous rate of N66/kWh has sparked widespread discontent, significantly affecting the operational costs of various sectors and the general populace.

The hike, representing a 240 percent increase, has necessitated a more cautious approach to electricity consumption across Nigerian households and businesses. Many are considering reducing the use of electrical appliances to manage the heightened financial burden the tariff imposes. Nevertheless, a comparison by BusinessDay, utilizing the exchange rate of N1,330/$, indicates that Nigeria’s current electricity tariff of $0.20/kWh remains comparatively low in the West African context.

This analysis, based on data from Global Petrol Prices, highlights the relatively affordable nature of Nigeria’s electricity despite the substantial tariff increment. The contrast in electricity pricing within the region underscores the complex dynamics of energy economics, where factors like operational costs, government subsidies, and infrastructural investments play pivotal roles.

The adjustment in electricity tariffs has prompted concerns about its impact on various sectors, including manufacturing, agriculture, and small businesses, which heavily rely on consistent and affordable power supply to operate efficiently. Some stakeholders argue that the tariff hike could potentially stifle economic growth and exacerbate the challenges faced by businesses already grappling with high operating costs and infrastructural deficiencies.

However, proponents of the tariff adjustment contend that it is necessary to address the longstanding issues plaguing the Nigerian power sector, such as inadequate investment in infrastructure, inefficient service delivery, and widespread electricity theft. They argue that the increase in tariffs will provide the much-needed revenue to upgrade and modernize the country’s aging power infrastructure, ultimately leading to improved service delivery and reliability.

Furthermore, the Nigerian government has emphasized the need for tariff reforms to attract private investment in the power sector and stimulate competition, which is vital for driving efficiency and innovation.

The government has also pledged to implement measures to mitigate the impact of the tariff hike on vulnerable households, such as targeted subsidy programs and initiatives to promote energy efficiency and conservation.

Despite the challenges posed by the tariff adjustment, some analysts view it as a step in the right direction toward achieving a sustainable and reliable power supply in Nigeria.

They argue that without adequate investment in infrastructure and reforms in the power sector, Nigeria will continue to grapple with energy shortages, blackouts, and economic stagnation. Therefore, while the tariff hike may present short-term challenges, it could pave the way for long-term benefits by catalyzing much-needed reforms and investments in the Nigerian power sector.

Here are 5 West African countries with higher electricity tariffs than Nigeria:

1. Mali

Mali, officially recognized as the Republic of Mali, stands as a landlocked nation situated in West Africa. It ranks as the eighth-largest country on the African continent, sharing borders with Algeria to the north, Niger to the east, Burkina Faso and Ivory Coast to the south, Guinea to the southwest, and Senegal and Mauritania to the west.

The electricity tariff in Mali is recorded at $0.215/kWh, highlighting a considerable disparity when compared to Nigeria’s tariff. Specifically, the percentage difference in tariffs between Mali and Nigeria stands at approximately 1164 percent. This significant variance underscores the diverse economic dynamics and energy pricing structures prevalent within the West African region.

Such distinctions in electricity tariffs not only reflect the varying economic conditions and energy infrastructures across countries but also play a crucial role in shaping industrial competitiveness, investment attractiveness, and overall economic development within each respective nation.

Understanding and analyzing these tariff differentials can provide valuable insights for policymakers, energy stakeholders, and investors seeking to navigate and engage with the diverse energy landscapes present across West Africa and beyond.

2. Togo

Situated in West Africa, Togo shares its borders with Ghana to the west, Benin to the east, and Burkina Faso to the north. Spanning an area of approximately 57,000 square kilometers, Togo is home to an estimated population of around 8 million people.

The accessibility of electricity in Togo stands at 55.7 percent of the population. Currently, the country’s electricity tariff is recorded at $0.215/kWh, mirroring the tariff rate observed in Mali.

This similarity in electricity tariffs between Togo and Mali suggests a parallel in the energy pricing structures and economic factors influencing electricity costs within the West African region.

The alignment in electricity tariffs underscores the interconnectedness of energy policies, economic conditions, and infrastructural developments across neighboring countries in West Africa. Analyzing these tariff rates and their corresponding energy access levels can provide valuable insights for policymakers, energy stakeholders, and development organizations seeking to address energy access challenges and promote sustainable development in the region.

3. Senegal

In recent years, Senegal’s power sector has undergone notable advancements, with reports indicating that approximately 70 percent of the population now has access to electricity. Spearheading the nation’s power operations is the state-owned entity Senelec, responsible for the production, distribution, and transmission of electricity.

As Senegal continues to make strides in expanding its electricity infrastructure and enhancing access to power, the country’s electricity tariff stands at $0.180/kWh. This rate positions Senegal as the third West African country with one of the highest electricity tariffs, reflecting the economic factors and energy policies influencing electricity pricing within the region.

The presence of Senelec as the primary authority overseeing Senegal’s power operations underscores the role of state-owned utilities in shaping the energy landscape and determining electricity tariffs. Additionally, the relatively higher electricity tariff in Senegal compared to other West African nations highlights the diverse pricing structures and regulatory frameworks prevalent across the region.

Understanding Senegal’s progress in the power sector, coupled with its electricity tariff dynamics, offers valuable insights into the country’s energy landscape and its efforts to promote sustainable development, improve energy access, and drive economic growth.

4. Ghana

Ghana’s electricity sector has witnessed notable progress in recent years, with recent statistics indicating that 85 percent of the population now enjoys access to electricity. Despite this achievement, ongoing efforts are underway to bolster electricity accessibility even further, reflecting the nation’s commitment to enhancing energy infrastructure and extending power services to more communities.

At present, Ghana maintains an electricity tariff of $0.125/kWh. This rate underscores the country’s efforts to balance affordability with the need to sustainably finance its energy sector operations and investments. Ghana’s relatively moderate electricity tariff, coupled with its high electricity access rate, showcases the nation’s strides in achieving a balance between affordability and energy accessibility for its citizens.

The combination of expanding electricity access and maintaining a reasonable electricity tariff in Ghana highlights the country’s commitment to fostering inclusive economic growth, promoting social development, and ensuring sustainable energy practices. These efforts position Ghana as a noteworthy example within the region and provide valuable insights for other nations striving to address energy access challenges while maintaining fiscal sustainability in their electricity sectors.

5. Ivory Coast

Officially recognized as the Republic of Côte d’Ivoire, Ivory Coast has implemented a range of initiatives aimed at enhancing electricity access. These efforts have resulted in significant progress, with over 66 percent of the population now having access to electricity.

Ivory Coast’s commitment to expanding energy infrastructure underscores its dedication to improving the quality of life for its citizens and driving economic development across the nation.

Presently, Ivory Coast maintains an electricity tariff of $0.119/kWh. This rate reflects the country’s efforts to balance affordability with the need to sustainably finance its electricity sector operations and investments. Ivory Coast’s relatively modest electricity tariff, coupled with its substantial electricity access rate, highlights its proactive approach to ensuring energy accessibility while maintaining financial viability within the sector.

The combination of increased electricity access and a reasonable electricity tariff in Ivory Coast showcases the country’s strides towards achieving energy security, fostering socioeconomic progress, and promoting sustainable development. These initiatives position the Ivory Coast as a notable example within the region and offer valuable insights for other nations seeking to address energy access challenges while ensuring the long-term sustainability of their electricity sectors.