Way out of the electricity dilemma
The level of frustration of Nigerians over worsening power supply problems lately is better imagined than experienced, following in particular, the collapse of several power plants in the country, coupled with constraints of procuring gas to run some others. Although the Minister of Power, Saleh Mamman “sincerely regret” the resultant power outage and the serious dislocation it is causing the average Nigerian, the Federal Government ought to be concerned that the present situation is not a one-off incident, but rather a continuation of disdainful services, occasioned by crass inefficiency that has attended the sector over many years. Mamman ought not to treat the matter with the usual run-of-the-mills excuses that his predecessors had always offered Nigerians. The grave situation now requires the minister to start thinking out of the box for a more enduring solution to power generation and distribution.
The frustration engendered by poor electricity supply in the country cannot be underestimated. The situation has adversely impacted on industrial productivity and worsened unemployment. Cost of production escalates when firms rely on self generation. Industries are folding up as a result of the dire situation. And domestically, many Nigerians are deprived of basic utilities such as fridges, fans, air conditioners and even catching up with the news on television. More annoying is that most Nigerians pay heavily for the epileptic power supply because the companies in charge have refused or failed to provide them with pre-paid meters that would relate their bills to services rendered.
Announcing the extensive power outage that Nigeria has been suffering for weeks, sometimes months, Mamman said 18 plants accounting for most of the electricity the country generates had faced operational problems. According to the Minister, eight plants suffered a “breakdown” while one underwent an annual maintenance. Seven other integrated power plants were experiencing gas constraints while one hydroelectric power plant has water management issue. These are enough to ground the nation but the problems did not start yesterday. It does seem that government has been content to manage the power situation rather than address it drastically, even for a country that has perpetually performed below par in terms of generating, transmitting and distributing electricity. For many years, Nigeria has managed to generate just about 4,000 megawatts for the whole country, consisting of more than 200 million people,
Lack of reliable power, according to the World Bank, is a significant constraint for citizens and businesses, resulting in yearly economic losses estimated at $26.2 billion (N10.1 trillion), which is equivalent to about two per cent of GDP. The World Bank says 85 million Nigerians, representing 43 per cent of the country’s population, do not have access to grid electricity. This makes Nigeria the country with the largest energy access deficit in the world.
Barely two months ago in February, the World Bank reportedly approved $600 million to support the Federal Government in improving the electricity distribution sector. So far, there is no impact of the funds on power supply, raising questions on whether or not it was judiciously spent. Last year alone, Nigerian manufacturers’ expenditure on alternative energy reportedly rose by 33 per cent from what was spent in 2019 according to data from the Manufacturers Association of Nigeria (MAN).
Although, self generation guarantees continuous business operation, lowering the adverse economic impact of grid supply interruptions, it remains an expensive alternative for local production and many households. MAN president, Mansur Ahmed, recently lamented that epileptic power supply and high cost of self-generated electricity, were key issues hurting the growth of manufacturing companies in the country. The implication is that it impedes the growth and development of the manufacturing sector, thereby affecting the attainment of the sector’s full potential of mass job and wealth creation, Mansur said, and this should surprise no one. He noted that when there is steady energy supply, operating costs of manufacturing fall, leading to the production of cheaper and high quality products that can compete in the local and global markets.
That Nigeria has failed woefully to deliver on electricity is glaring and that is at the root of the country’s economic woes. Being the power house that propels the economy, nothing else would work until electricity is fixed. There are no two ways about the electricity enigma other than to fix it. The current dilemma of the power sector is inconceivable.
It is confounding that the country, despite tinkering extensively with the electricity sector over the past 50 years, changing the name of the relevant agency from Electricity Corporation of Nigeria (ECN), National Electric Power Authority (NEPA), Power Holding Company of Nigeria (PHCN) and finally unbundling this to several private companies, the sector has steadily gone down in services. Obviously the name changes were not accompanied with sufficient policy review geared towards achieving the desired objective. Consequently, the situation further deteriorated.
The private companies that finally emerged from the privatisation exercise have shown no capacity to effect any improvement. And government, along with the regulating agency it established, appears clueless as to the way forward. Again, the Minister of Power must take charge and compel the GENCOS and the DISCOS to perform or quit the stage for better qualified and more competent organisations. Given the gross mismanagement that has trailed the electricity sub-sector, it is time to hold those responsible for the colossal failure in power supply to account. The distribution companies must firstly be compelled to meter all their subscribers. So far, this task is taking eternity despite huge government’s financial and material encouragement, coupled with the fact that the subscribers ultimately pay for the meters’ procurement.
In addition, government must encourage a switch to alternative energy sources, which is the global trend. Solar power, wind energy and hydro-power generation should be given the necessary attention and integrated into the country’s power strategic plan. Energy mix is the in thing and should be pursued with vigour.
Importantly, there should be energy democracy. Electricity should not be in the exclusive list. Let those who can provide power, be it states, corporate bodies or individuals, be allowed to produce power and sell to consumers. Decades of dependence on one omnibus, centralised power behemoth has failed and should be discarded. Improving access to reliable power supply is the key to reducing poverty and unlocking economic growth in the country.
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