Editorial

The nation’s worsening power supply

The federal government’s plan to increase power generation from 4,000mw to about 6,000mw in the next six months, is grossly inadequate. President Bola Tinubu had in October last year promised the business community that he would ensure that  Nigeria’s economy hit $1trillion by 2030, and even boasted that he could make it happen by 2026. The ambitious plan is not likely to succeed considering our poor electricity generation and constant grid collapse. Nigeria need more than the 6,000mw target to ramp up economic growth and development.

According to the Minister of Power, Adebayo Adelabu, government should invest at least $10billion annually in the sector for the next ten years for any meaningful improvement in the power sector value chain. He says that the government is taking steps to ensure reliable power supply, beginning with increasing power generation to 6,500mw between now and October this year.  This is a negligible benchmark considering the critical role of the power sector as a catalyst for industrial development of the country.

Sadly, successive administrations have not taken concrete measures to revamp the ailing power sector. At best, some of the measures taken, including the contentious tariff hike, are part of the World Bank’s recommendations. Despite billions of dollars invested in the sector since 1999, and the unbundling of the sector that paved the way for power Distribution Companies (Discos), Nigerians still grapple with epileptic power supply. 

Recently, governors of the 36 states of the federation signed an agreement with consultants to break the monopoly of Discos in power distribution. Before he left office last year, immediate past President Muhammadu Buhari signed into law the constitutional amendment allowing state governments to license, generate, transmit and distribute electricity. They can do that in collaboration with Independent Power Producers. President Bola Tinubu recently signed into law the Electricity Development 2023. Nigerians need an efficient power supply system. Many companies have left the country on account of poor electricity supply.           

Recently, government disclosed that henceforth, Discos should be ready to distribute at least between 90 and 95 percent of power supply to consumers within their jurisdictions or be ready to face regulatory sanctions. But that has not happened yet as most Discos are distributing far less than the government’s approved power supply to their customers. Government should find reputable new buyers for distressed Discos which have been taken over by some creditor banks and the Asset Management Corporation of Nigeria (AMCON).   

The government is yet to set a deliverable roadmap for the power sector. The Olusegun Obasanjo administration reportedly invested over $16 billion in the sector with little results to justify the huge investment. Other administrations had invested much more without achieving the set target. Now, the Tinubu administration says it needs $10billion annually to stabilize the power supply. The 6000mw plan for the next six months is less than 10 percent of that of Egypt, which has a power supply generation of 58,818mw as of 2023. 

Also, South Africa generates as much as 42,000mw, or approximately 85 per cent of the country’s energy requirement, generated largely via coal-fired power stations. Ghana currently generates over 7,000mw, of which 2,930mw are of installed generation capacity, 1,380mw of hydro and 1,550mw of thermal and 890mw from Independent Power Producers (IPPs). 

The Discos should be compelled to sit up or have their licences revoked. The non-performing ones should not be treated with kid gloves.  Discos have been more concerned with tariff hike and profitability than efficient customer service delivery.  Government should emulate countries that have stable electricity. Egypt is a classic example in Africa. The prices of renewable energy in Egypt are among the cheapest in the world. 

Without adequate electricity, Nigeria’s quest for industrialisation and investment inflows will remain a mirage. Besides Egypt and South Africa, other African countries that have affordable electricity include Zambia, Gabon, Botswana and Zimbabwe. According to 2022 World Bank report, renewable energy in Nigeria account for only 16.4 per cent of the total electricity capacity. This is considered far less than what is required to meet consumption needs.

In 2022, access to electricity in Nigeria was almost zero, a decline of 59.5 per cent from that of 2021 which was 59.50 per cent. In 2019, it was 55.40 per cent, a decline of 1.1 per cent from that of 2018. The federal government had in February this year launched “2024 Energy Demand-side Survey, with the support of the European Union (EU) and the International Energy Agency(IEA). It targeted about 5,000 households are targeted across the six geopolitical zones. 

We advise government to explore other technological models to improve power supply across the country. Higher standards in power supply are needed to meet the nation’s energy supply requirements. Nigeria should generate at least 15,000mw to witness an appreciable impact on the economy and a reduction in the cost of production. Let the government take power generation seriously.

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