Disco blames high cost, others for slow industrialisation
Lamenting over Nigeria’s economic woes, the Chairman of Kaduna Electric Company (KADEC), Alhaji Yusuf Hamisu Abubakar has said that failure by the nation to industrialize is as a result of, among other factors, unreliable and costly access to energy.
Abubakar explained that the failure was more visible in the industrialisation programmes of past governments in the 1970s and early 1980s, particularly as it affected the northern region.
The Chairman of the Board of Directors of Kaduna Electric, made the assertion in a paper titled: “Electricity as an Essential Component for Economic Growth in Nigeria: Challenges and Prospects” was delivered on last Saturday night in Kaduna during the farewell dinner organized by Kaduna Chamber of Commerce, industry, mines and agriculture in honour of exhibitors in the just concluded 38th Kaduna International Trade Fair.
Alhaji Abubakar who called for a holistic review of the challenges confronting the participants of the Nigerian Electricity Supply Industry,
stressed the need for a balance between cost reflective tariff and affordability of electricity in Nigeria.
According to him, unless the contending issues of provision of qualitative and reliable supply through the adoption of cost reflective tariff and affordability of electricity by the citizenry, while small and medium enterprises as well as big industrial organisation is urgently addressed, the country’s desire for industrialisation will continue to suffer serious setback.
The KADEC boss maintained that the Nigerian Electricity Regulatory Commission, (NERC) which is the umpire in the Nigerian Electricity Supply
Industry, (NESI) “tries to strike a balance, albeit unsuccessfully, by adopting the sculpting measure, where distribution licensees were directed to charge less than their cost reflective tariff in the interim hoping that they can be able to charge appropriate tariff later”.
Said Abubakar: “Nigeria Electricity Regulatory Commission (NERC), being the regulator for the industry has the mandate to approve tariffs. In an effort to make electricity tariffs more affordable, NERC adopted sculpting of the tariff such that Discos are required to under-recover now (by charging less than the cost reflective tariff) and are allowed to recover in the future. This model, while bringing temporary ease on the retail tariff, comes with attendant challenge of how to manage the huge shortfall resulting from the sculpted tariff.”