In order for any country to experience sustainable growth, there is an underlying need for consistent, affordable, and environmentally-friendly energy.

Electricity plays a fundamental role in the socio-economic progress and development of every nation.

It facilitates the provision of basic amenities, essential health care, food, communication and transport.

It is also responsible for powering industries; from manufacturing to mining to agriculture to e-commerce to real estate and much more.

The Nigerian energy industry is arguably one of the most inefficient in meeting the energy needs of its consumers.

The persisting energy crises has weakened the progress of industrialization, hindered development, and contributed negatively to the quality of life in a country where majority of the populace live on less than $2 a day.

According to the Gas exporting countries forum, Nigeria has proven reserves of well over 5 trillion m³, the largest proven gas reserves in Africa.

With gas reserves far greater than our oil reserves, gas not only has the potential to power Nigeria for the next 50+ years, it also offers a comparably cheaper and cleaner way of generating energy.

Nigeria has reportedly flared more gas than any other country in the world despite the fact that the benefits of gas go beyond the socio-economic.

Gas discoveries in Nigeria have, for the most part, been incidental oil exploration and production activities.

As a result, despite the associated environmental hazards of gas flaring, experts say Nigeria used to flare about 1.2 billion cubic feet of gas a day (bcf/d), which could fuel about 7000MW of efficient thermal electric power, over 1,400 agro-processing facilities, 350 textile plants, and 70 fertilizer plants with a plethora of opportunities to create over one million jobs.

This amount of gas flared represents 12.5 percent of all globally flared gas. Between January and September 2014, Nigeria lost about $1billion as oil companies operating in the country flared a large proportion of the gas produced. This figure has now reduced by almost 50%, due to a realisation of the value of gas.

IOCs such as Shell recently announced they will focus their future investments in Nigeria on gas. Indigenous companies have also increased their own focus on the gas industry. For example, the indigenous oil and gas firm, Seplat Petroleum Development Company has invested $300m in the gas business.

The company also expanded its gas processing facility in Oben, Edo State to boost power generation in the region.

Oando PLC is another example. Their mid-stream subsidiary has begun the expansion of the Trans Amadi gas pipeline located in Port Harcourt, as well as a further extensive build-out of its vast Lagos gas grid to connect off-takers located on the Ijora-Marina-Bonny Camp axis.

The company has earmarked its approach as part of a long-term strategy to drive gas production and supply in every industrial centre in Nigeria. Oando has also announced plans to invest $36 million, in the construction of three gas-compression plants in the country within the next year.

A final example can be found in Seven Energy who recently secured a $495 million loan from a consortium of Nigerian and international lenders to help fund its spending to supply gas to the domestic market.

Seven has already invested $1 billion in related projects in the southeast gas fields along with the related infrastructure and pipelines so it can sell gas into the domestic market for use in power generation and industrial consumption.

These projects are all timely especially considering that domestic gas demand is projected to reach 5 billion cubic feet daily in the next two years.

The International Energy Agency (IEA) forecasts overall power generation in Africa to increase its current level of 17% to above 25% by 2040, further spurring an economy such as Nigeria’s, which is projected to grow to $4.2-trillion by 2040 and take its place as the world’s 4th largest economy.

This clearly outlines the trajectory of the global energy industry.

Undoubtedly, the transformation of Nigeria’s power sector is key in order to drive economic growth.

The power privatisation process, and the simultaneous process of divestment by major IOCs from gas rich, onshore Nigeria Delta assets heralded a period of investment in gas processing and distribution infrastructure that is vital to the long term success of the power industry, but much work remains to be done.

It is imperative that the government commits to accelerating and finishing the work that has been started in this area.

In certain areas, incentives, concessions, and enabling policies are still required. Institutions such as the World Bank have recognised this; its Partial Risk Guarantee Scheme in Nigeria is the largest such scheme in the world.

To provide the guarantees many investors are seeking, there has to be a regulatory process to enhance the creditworthiness of gas off-takers, along with the bankability and enforceability of domestic supply contracts as well as the gas price regime.

The benefits, if a viable framework is implemented, are exponential and indisputable. It is a simple fact that improving power generation and supply will have a considerable impact on our annual economic growth.

At a time when the Naira has devalued significantly and our overreliance on imported petroleum products has driven the currency even further down, import substitution is vital to power plants and industries to drive inclusive economic growth.

It is very clear that Nigeria’s energy requirements are very high while supply remains inadequate, insecure, and irregular.

Nonetheless, there is a firm belief in the future of the Nigerian gas industry and its potential to have a positive and tangible impact on energy provision, the economy and quality of life of every Nigerian.

Dawn Dimowo is a consultant with africapractice providing political and business intelligence, analysis and communications support to local and international clients in different industries including extractives, agriculture, ICT and finance. She worked formerly at the office of Legal Affairs of INTERPOL in Lyon and more recently with a government agency in Abuja.  Dawn is a qualified lawyer and speaks English and French fluently