Call for review of power sector privatisation heightens as epileptic electricity supply persists

CONCERNED  by epileptic power supply in Nigeria, energy stakeholders are intensifying calls for the review of the privatisation of the power sector.

The stakeholders say that the privatisation has failed to bolster the power sector and light up Nigeria.

“Privatisation exercise in 2013 is ordinarily envisaged to take care of the power chain of generation, transmission and distribution. The entire privatisation is due for review. Most importantly, there is a need for the decentralization of the grid since there are lots of technical aggregate and commercial losses for the grid power,” President of Nigeria Consumer Protection Network Kunle Olubiyo told The ICIR.

Olubiyo further noted that there was a need to encourage eligible customer status that would allow direct transmission of power to cities and industrial clusters paying for power costs, rather than having everyone in centralised grid power.


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“Nigeria has several industrial clusters, there is a need to enable grid decentralisation since the grid is currently overstretched with several technical, aggregate and commercial losses which affect what the Discos get for distribution. The Transmission Company of Nigeria also needs to be unbundled.”

Nigeria’s power sector was privatised in 2013. It was described by most energy analysts as ‘a bold step’ in opening up the nation’s electricity market for private sector-led participation while allowing investments into the generation, transmission and distribution value chains.

However, eight years down the line, the Nigerian government still pays subsidy to the tune of N120 billion monthly to sustain liquidity flow for the privatised sector, having engineered a ‘political rather than economical’ halting of appropriate tariff pricing and efficient cost recovery mechanism for the sector.

Also, although Nigeria has attracted several funding and technical support from the World Bank and the African Development Bank (AfDB), available data show that energy poverty is still on the rise in the country.

Power failure in Nigeria
A man and a young boy work on a “Better pass My Neighbour” power generator set late in the night in Lagos, Nigeria. Image credit: Ajibola Fasola/Wikimedia Commons

Vice President Yemi Osinbajo had once explained that the Nigerian government had, through the Central Bank of Nigeria (CBN), pumped about N1.5 trillion into power sector intervention funds in the last two years.






     

     

    However, these interventions have failed to lift Nigeria from energy poverty as World Bank, in its recent report on Nigeria’s power sector, indicated that over 78 per cent of electricity consumers in Nigeria received less than 12 hours of electricity supply daily.

    The bank, a key financial and technical supporter of Nigeria’s power sector, also noted in a recent meeting with newsmen that a total of 74 per cent of power users in Nigeria were dissatisfied with the supply of electricity across the country.

    Nigeria’s power generation has continued to hover around 4,000 megawatts for years, rising to 5,000 megawatts at few peak periods, despite the government’s target to grow it to 7,000 megawatts.

    “The power sector has not improved. It is not improving because the process that led us to the privatisation is faulty, very faulty. There is no proper trackable performance agreement that helps us know the level of progress such that if they are not met, the government could take up its infrastructure. This has been challenging to the sector,” Associate Consultant to the British Department of International Development (DFID) Celestine Okeke told The ICIR.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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