Eight years after the privatisation of the power sector, concerns are mounting over the worsening state of electricity supply in the country. Power generation is yet to match the installed capacity of 13, 014 MW. Energy generation to the national grid as at November 1, 2021, was as low as 3,844.3MW. Recent data from the Nigerian Bulk Electricity Trading (NBET) company showed that in eight years, electricity consumers had spent about N5.7trillion on tariffs. This represents an average of N720 billion worth of electricity, with some subsidy from the Federal Government. In real terms, the amount can be described as paying for darkness.
This is not what Nigerians expected eight years ago when the privatisation of the power sector was consummated amid much celebration. By 2022, the 15-year Multi-Year Tariff Order (MYTO) will be up for review, yet NBET that oversees the implementation of MYTO does not seem to have the capacity to fulfill its main mandate. By that period also, the 11 electricity distribution companies (Discos) will have a new deadline to review their monthly bills.
The Central Bank of Nigeria (CBN) had also provided critical intervention funds of over N1.5trillion to the ailing power sector. On its part, the Federal Government has reportedly spent about N1.7 trillion on the sector, with plans to spend additional $3billion. Without these interventions, the power sector would have collapsed. It is sad that after showing initial promise, the Discos have failed to inject into the sector the required capital. That is why they have always complained of obsolete equipment and paucity of funds. Apart from change in ownership, the privatisation of the sector has not changed much.
Though liberated from state bureaucracy, the power sector still contends with numerous challenges. These include shortage of gas, inadequate metering, unpaid electricity bills and ailing transmission network. Also, corruption and lack of political will limit the power sector reforms from meeting the target objectives. The high cost of electricity has also raised the cost of production and prices of goods.
Many electricity consumers are yet to get prepaid meters despite efforts by the Nigerian Electricity Regulatory Commission (NERC) to bridge the metering gap and humongous amount spent on the project. We urge the government to address the power challenge. The slow pace of our industrial development can be linked to the nation’s epileptic power supply. It appears that the privatisation of the sector has not ensured steady power supply. That is why many homes and businesses are often without power. Many companies provide their own power. The same is applicable to many homes and small scale businesses.
Despite huge investments in the sector since 1999, the failure of the private owners to perform is inexplicable. Unfortunately, Nigeria is listed among the top 20 countries in the world that lack access to clear fuel technology for cooking and industrial uses. That is an indicator of underdevelopment.
For instance, in May this year, many homes, factories and shops across the country were plunged into darkness. As at August this year, the national grid collapsed for the fourth time, causing a nationwide blackout. According to statistics from the Ministry of Power, the highest peak power ever generated and transmitted in the country was 5,802MW. That was in March 2021.
The frequent power outage does not augur well for industrialisation. In 2019, about 320 firms reportedly shut down production, and some relocated to neighbouring West African countries as a result of unstable power supply. Nigerians are said to be have spent about $14billion on generators and other power technologies as a result of the nation’s erratic power supply.
Government must revamp the sector and shore up power supply. It can explore other sources of energy such as solar and wind. The thermal plants and turbines across the country are often short of gas supply, as gas producers prioritise selling to industries which can readily settle the bills. Perhaps, government should revisit the privatisation programme and make it work. Investors go to places where power supply is steady. Therefore, the government must strive to overcome the present power challenge. Enhancing the nation’s power supply is the best way to ensure that the economy grows beyond the projected annual rate of two per cent.