Follow Us on Google
By Cosmas Omegoh and Olakunle Olafioye
Many consumers of electricity especially in Lagos do not have supply at the moment. Power distribution companies attributed this to low supply from both the generation and transmission companies in the country. 
Over the past months, power supply had sustained an unstable regime, plummeting to all-time low.
Not long ago, Transmission Company of Nigeria (TCN) disclosed that the country’s power supply dropped to 84.43GWh. It was a development industry operators feared was abysmal.
However, on Sunday, June 5, 2022, TCN said that power supply in the country recorded a rebound after crash in the days before.
According to the agency, power generation improved by 12.9 per cent last Sunday by 70,943.35MWh, compared to what obtained on Saturday, June 4, 2022, a performance put at 62,837.51MWh.
Since this year, power supply has been grossly unreliable in most places, leaving consumers groaning.
In recent times, reported cases of grid collapse, and shortage of gas supply had led to severe outages that have left every consumer in quandary.
According to industry sources, the highest average frequency these past days was put at 51.12Hz, while the lowest recorded frequency was 49.03Hz.
Ministry of Power in a statement issued and signed by the Special Assistant to the Minister of Power on Media, Malam Sanusi in penultimate Saturday, attributed the recent power dip to the partial shutdown of the Obem gas plant in Edo State.
He lamented that the incident happened “when other power plants and other gas sources were undergoing planned maintenance and capacity testing.”
But industry players are unhappy that the country’s electricity generation has dipped below the minimum 105,000MWh required to record some form of acceptable stability in power supply.
This development accounts for the incessant outages, poor, or no supply of electricity at all in most places, leaving manufacturers, and many who need regular supply of power to sustain their businesses helpless.
The situation has been made worst by the high cost of alternative sources of power. The cost of diesel, a component of alternative power now averages N670 per litre up from N350 per litre in the past months.
Reasons behind Nigeria’s power crisis
An energy analyst, Gboyega Ajayi, enumerating the reason behind Nigeria’s unending electricity crisis identified a number of reasons:
“First, there is the issue of low level of electricity generation by the generating companies.
“The generating companies complained that the cost of gas has gone up, and many of them are unable to meet their obligation to gas suppliers. I am talking about those who are generating energy from gas. So, many of them are unable to meet their obligations to the gas suppliers, and this has affected their ability to generate electricity. They also claimed that they are not getting paid by the DisCos and the Nigerian Bulk Electricity and Trading Plc (NBET), which serves as the bridge between the DisCos and the GenCos.”
The second reason, according to him, is the regular system failure. This he noted is “what we call the collapse of the grid. Sometimes it could be as a result of the vandalism of the pipelines. And sometimes it could be due to inadequate supply from generating companies. So, if there are issues with the transmission, it will definitely affect electricity.”
The third reason, he also noted, is “the capacities of the DisCos to manage the distribution of electricity. Some of them do not have the financial capacity, and some of them do not have the technical capacity. So, capacity problem is also a major issue.”
He added that “there is the issue of energy pricing. Operators will often complain that the tariff is not cost-reflective. So, they are not able to generate enough revenue to support the entire chain.
“And there is also this problem of energy theft. A lot of people including government agencies are consuming a lot of energy without paying. So, if they are not paying, how do we expect the system to be sustained?”
Poor power crisis impact on businesses
At the moment, the aggregate of poor power situation in Nigeria is aggravating the challenges of manufacturers and other businesses.
This is the lamentation of Muda Yusuf, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE) and immediate past Director General of Lagos Chamber of Commerce and Industry (LCCI).
According to him, “without public power supply, businesses will have to resort to alternative power sources,” regretting that “increasingly, the alternative sources of energy are becoming expensive.”
“Diesel,” he further lamented, “has increased by over 200 per cent in the last one year; natural gas and aviation fuel – all of these are putting a lot of pressure on costs of production. There are some production processes that do not even allow for disruptions in energy supply. And for those production processes, they can’t even use public power supply; they have to rely entirely on alternative power source.”
Yusuf is unhappy that “when cost keeps increasing, for the business to stay afloat, producers have to increase the prices of their products.”
He noted that “meanwhile it is not in all cases that manufacturers can increase prices, otherwise the consumers can completely boycott their products especially if the product is not an essential product or if it is a product that has alternative. For such categories of products, once there is an increase in their cost of production, the manufacturers will have to bear the burden. So, in this case, it will affect the profit margin of the manufacturer; it will affect the ability to sustain the business, and the ability to retain their workers.”
The situation, according to him, “is even much worse for producers because most of them are already suffering from the effect of exchange rate depreciation. It is double jeopardy for them. They are suffering from the fact that exchange rate is weak; they are suffering scarcity of foreign exchange. And on top of that, they have to contend with energy crisis.”
Impact on consumers/Nigerians
Meanwhile, Yusuf has said that the immediate impact of poor electricity supply in the country right now on the consumers is that their demands are reduced.
He noted that “once prices go up, people will begin to rationalise their demands; sales will drop, and the consumers will get more impoverished. What it means is that the purchasing power of the consumers becomes affected and get weaker with increase in price. So, this will make people poorer; it will accelerate the pace of poverty in the economy. It even affects other products because people will be compelled to prioritise. They will drop the non-essential products. It causes a lot more people to drop into poverty.”
How manufacturers cope
Apart from the impact of poor power supply on domestic consumers, small scale manufacturers have been lamenting the debacle.
One of them, Mrs Ganiyat Aderemi, the proprietor of Remy Poly Manufacturing said:
“The last few months have been very difficult for our business due to irregular power supply. We have never had it this bad because the alternative source of power available is no longer within reach. I am talking about using generators now to power the machines because the price of diesel has risen astronomically.
“If we are to power the machines with generator, now we will be compelled to increase the price of our products. And doing so is not a good option because of the competitive nature of the market. Doing so will definitely scare our customers.”
Mrs Ugochukwu who runs a small-scale bakery in Isheri, a suburb of Lagos has also been lamenting the impact of lack of power in her area.
“The situation is terrible. Over the past months, we have hardly had a cumulative 24-hour supply of electricity.
“What that means is that we use our generator to power our business – and every other thing that we need to do in our bakery.
“Initially, we were using a diesel-powered generator, but we had to abandon it due to the high cost of diesel. We had to buy a petrol-powered generator just to sustain our means of livelihood. It is sad,” she lamented.
She is unhappy that even when they get no power supply at all, Ikeja Electricity Distribution Company still brings crazy bills to them every month.
“What we pay for is darkness, and for having power cables from the grid running to our house,” she regretted.
Yusufu Aderemi, a welder in Isheri neigbourhood in Lagos, also lamented the disheartening poor power situation in his area, saying that at some point, it knocked him off business.
“When I opened my workshop newly, I was having this incessant power supply. Some days I would come to the workshop and would not be able to do anything.
“Then at some point, I began wondering how long that would last. It was at that point that I had to go borrowing money to buy a used diesel-powered generator.
“Now, I’m faced with the problem of buying diesel at the price it’s being sold, and maintaining it too; but that is by far better for me than to wait for power that does not come.”
A couple of houses away from Aderemi, a lad, Yinka Odebiyi, runs a barbing outfit. He too lamented the same poor power supply to his area.
“I put this business together with the assistance of friends and family members. But my problem has been lack of power supply.
“Here in Isheri, over the years, Ikeja Electric has been alternating our supply.
“When poor supply was fair, we used to have this one-day on, one-day off regime. So, in six months we had no power supply at all.
“Ever since we started hearing about this grid collapse, the situation has been terrible. We scarcely have one straight hour of electricity supply in a week. We see them flash it and cut it again. Sometimes, they give us supply in the dead of the night – about 2:00a.m, sustain it till 5:00a.m. At that time, what would anyone do with such service?” he asked.
How we have been managing the situation
For Aderemi, “it has been very difficult because we have been constrained to taking some drastic measures, one of which is to ask some of the staff to go pending the time the situation normalises.
“Before now, we had close to 30 workers, but now, they are about 20 or so. We can’t keep them because it’s becoming increasingly difficult to pay salaries.
“Secondly, we have also introduced night shift. Before now, our operation duration was between 7:00a.m and 7:00p.m, but we have started to run two shifts, day and night, because of the unpredictable power situation.”
Also speaking, Mrs Ugochukwu told our correspondent that “now, I have had to open up new clientele channels so that I would be able to sell more of our products to be able to earn a little more money to buy fuel. It is tasking doing all that runs. Sadly, this is what Nigeria has turned all of us to.”
Odebiyi said to be in business, he had to buy a small Honda generator. “I bought that for N35,000. Now, what I do is this: the moment we finish attending to a customer, we turn off the machine.
“We have long made them to realise that we buy fuel in other to provide our services. So, we charge a token to be able to recover the cost of buying fuel,” he said.
Lagos DisCos react
Recently, the two power distribution companies (DisCos) that cover the Lagos area have blamed the perennial drop in power generation for the outages and low supply.
They made this disclosure in their social media channels.
Eko Disco also called EKEDC said that the epileptic supply was due to the drop in power generation from an average of 3,700MW to 2,000MW per hour.
The company had attributed this to poor gas supply because of vandalism, and lately because TCN had issues with its Egbin Power Plant.
It then went to apologise “for the inconvenience this may have caused, and assure you that we are working with our generation and transmission partners to ensure that stable supply is achieved within the shortest possible time.”
Similarly, Ikeja Electric, in a statement on its official Twitter account, attributed the power outages in some areas within its jurisdiction to what it called load shedding by TCN because of a drop in power generation.
