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How bill to ban electricity generators will affect small businesses in Abuja

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IT was the second time the Abuja Electricity Distribution Company (AEDC) was interrupting power supply that hot afternoon –an action that produced murmurs and sighs from the customers at a photocopy shop in Sky Memorial, Wuse zone 5, Abuja.

Charles Anamichakwe hurriedly went to start the Thermocool diesel generator set, a few feet away from the shop entrance.

This incident shows that if the Generating Set Prohibition/Ban Bill is passed and gets an executive assent, Nigerians would suffer more from the epileptic power supply.

Therefore, the introduction of a new bill proposing the outright ban of generators sponsored by Bima Muhammad Enagi, a senator representing Niger South Senatorial District of Niger State last week might not be what Nigerians want-just yet.

Change that frightens

Charles manages a mega stationery shop at the popular Sky Memorial Plaza. During the peak period, he attends to 50 to 80 customers daily in his small business centre, offering services such as photocopying, laminating, direct imaging and others.

Charles. Credit/ICIR

Speaking to The ICIR, the manager vehemently opposed any plan to ban the importation or the use of fuel-powered generator sets.

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“Since you stepped into this shop, this is the second time the power has been interrupted and we do not have any inkling as to when they might restore it,” Charles said. “But business must go on.”

Despite having to spend over N20,000 on prepaid electricity billings monthly, Charles said he purchases N5,000 worth of diesel every day to keep the business running.

On a good day, the shop rakes in about N10,000 from photocopies, etc. However, in a month, about N150,000 is spent on the purchase of diesel.

Despite the obligation to pay over ten workers every day, Charles told The ICIR the availability of an alternative electricity generating source still remains the best option for him.

The use of a cleaner source of energy in Nigeria is not without challenges as most firms in the country make use of fossil fuel to generate electricity. However, Total Gas Station in Zone 5, Abuja, combines both fossil fuel and solar energy as an alternative way to generate power.

Kudu Mohammed, Assistant Manager, Total Station said though the branch is one of the pioneers of renewable energy for commercial purposes, it had to abandon the process since 2019 due to technical challenges. 

“Unfortunately, even with the installation of the solar panels, we still need to power the batteries with the diesel generator to a certain percentage before it can run effectively on its own,” he said. “And this defeats the initial intention on our part to reduce carbon emissions.”

Ambrose Ossai and Ameh Jamil
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Kudu explained that due to the unreliable supply of electricity supplied by the Abuja Electricity Distribution Company, the gas station uses over a hundred litres of diesel within two hours to run its business every day whenever the Disco interrupts power.

Meanwhile, Ambrose Ossai and Ameh Jamil, both managers at a Petroleum station also told The ICIR that the establishment uses about 50 litres of fuel in three to four hours if there is a prolonged electricity interruption.

The establishment is among the few that use prepaid metres within the vicinity and spends an average of N43,000 for the purchase of electricity units monthly.

According to a 2007 World Bank report, nearly nine million litres of diesel is consumed weekly by the Nigerian Manufacturing sector.

The managers said they would rather prefer steady electricity to the use of generators. But without cheaper and readily available options, an outright ban of generators would definitely hurt business, they said. 

“The noise from the generator is even a nuisance,” Ambrose said. “And once it is powered on, you don’t want to be anywhere close to the generator house.” 

West Africa greenhouse gas emission is barely 1.8 per cent despite being home to five per cent of the world population. Yet, Africa, according to a United Nations fact sheet on climate change,  is most vulnerable to the impacts of climate change.

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Meanwhile, not everyone subscribes to the ideology of contributing to climate change or even impacting it through whatever means.

Martha Godwin, a hairstylist, learning for the first time that Generators could be banned listed reasons why the ban would cripple the growth of small businesses like hers. 

“They cannot say I am polluting the environment and force me to stop using my generator when the main pollution is emanating from open defection due to lack of sanitary facilities. “Let them fix that one first,” the agitated stylist said.

Martha Godwin, during a pedicure session with a client. Credit/ ICIR

Although the option of a clean energy generating source was appealing to Martha, she, however, was sceptical about the effectiveness of solar panels, especially during the raining seasons.

Importation of Genset so far 

Between 2015 and 2018, the total revenue spent by the Federal Government in subsidising electricity for Nigerian consumers stood at ₦1.12 trillion, but despite the millions invested in the power sector it currently generates less than 4,000 MegaWatts to over 200 million people which is about one-third of what Singapore supplies 5.6 million people.

According to Babatunde Fashola, Minister of Power, Works and Housing, about 90 million Nigerians have no access to the electricity supply. 

Regrettably, despite boasting as Africa’s largest economy, Nigeria’s Small and Medium Enterprises have to improvise by deploying alternative means of generating their own electricity in order to ensure that business goes on as usual.

Nigeria closely follows Egypt as the second-largest market for manufacturers of generators in Africa with an importation valued at over $51 million dollars in 2014 and 2015 alone. The value is projected to hit $450 million dollars in 2020.

A study by Ciston Research, however, anticipates a rise in the stipulated amount as the sector keeps recording substantial transmission loss and deficiency of high base power required for commercial, residential, and industrial applications. 

The Bill 

The Genset ban bill is not an entirely novel proposal. In 2019, a member of the House had moved for a five-year temporary ban of the importation of generators which was voted against by majority.

Although it was pitched as a means of fixing some of the issues that riddle the Nigerian power sector, a part of the bill which calls for the conviction and imprisonment of offenders to a jail term not less than 10 years have rubbed off negatively on Nigerians who say the conditions of the bill was insensitive to the needs of the citizens.

“The ban/prohibition of generator sets shall not include generating sets used for essential services which include: Medical purposes( hospitals and nursing homes and healthcare facilities), airports, railway stations/services, elevators,(lifts), and escalators, research institutes and such institutes that require 24 hours electric power supply,” the act read in part.

 The ICIR can report based on interviews with SME’s operators that the new act did not consider small scale enterprises that depend solely on the electric power supply from the Discos.

Martha Godwin’s neighbour a barber fixing his mini generator. He also opposed the bill to ban Gensets.
Credit/ICIR

Despite a clause in the bill giving room for the application of an exclusion permit from the minister in charge of power, the stipulated price of permit-if any was not revealed in the act.

Adetayo Adegbemle, Director of Powerup a civic organisation and energy consumer rights advocate who spoke to The ICIR noted the failure of the national grid to supply the country with stable power led to high dependency on alternative electricity power source in the first instance.

“The question to ask is:  what is the bill proposing?  Is the bill Punishing people that are providing alternative sources which in the first instance was made available because the national grid is not working? And how does it affect the efficiency of the grid?

 He noted that stopping individuals from generating electricity through the use of a generator while the Senate itself utilises the provisions of the alternative was hypocritical.

Adetayo said although a shift to the use of renewable energy would be a safer and better alternative for Nigeria, the country is not ready for a complete switch yet.

 

If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

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