Demand from Telecommunication Sector to Drive the Uptake of Gensets in Nigeria

A major power crisis could be underway in Nigeria, as the Power Holding Company of Nigeria (PHCN) is generating insufficient power despite the country’s increasingly dependency on diesel generated power as its primary source of energy.

The crisis, coupled with high economic growth in the country, is the main factor driving growth in the diesel genset market. High demand for gensets is coming from industries across the board, particularly from the high-growth market sectors such as telecommunications. The Nigerian genset market is therefore entering a period of steady growth.

“Growth in the Nigerian genset market will be driven by the expansion of the telecommunications sector,” notes a new Research & Markets report. “Telecommunications are among the fastest growing end user sectors of gensets in the country even as other end users such as manufacturing, commercial, construction and oil and gas sectors register strong growth.”

Telecommunications and infrastructure development, road constructions as well as expansion of industries have led to increase in the use of gensets. They are projected to remain as important sources of prime power during the medium and long terms, despite the major power plant construction projects underway and research on alternative energy sources like renewables.

A key issue is the absence of quality control regulations in the region. This is proving to be the major challenge for original equipment manufacturers (OEMs). The market is flooded with gensets of varying quality and, hence, varying prices as a direct result of the lack of quality control regulations in Nigeria. As the demand for gensets is set to gradually rise in parallel with the country’s economic growth, more equipment suppliers are entering the market.

R&M add: “Product quality and efficient after-sales services are fast replacing product price as the key differentiating factors in the genset market. Equipment suppliers that can ensure efficient service delivery, product quality and cost competitiveness are in a better position to capture and increase their market share.”

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