NIGERIA’S power sector post-privatisation has failed to light up Nigeria despite over N7 trillion intervention to uplift the sector.
This was disclosed by the Electricity Consumer Protection Forum (ECPA), National Coordinator, Ademola Samuel Ilori.
Ilori told The ICIR on the sidelines of the just concluded Nigeria Electricity Supply Industry (NESI) Market Participants and Stakeholder Roundtable (NMPSR), held on Wednesday, November 1, in Abuja, that consumers were not benefiting optimally from the privatisation.
“The government is still sinking money into the privatised power sector. This is not a good development. Already, N3.3 trillion was put into the sector under President Buhari without appreciable progress. We’re not far from 4,000MW despite these trillions. Consumers are not also getting the best of service.
“Banks are gradually taking over the bank’s acquisition due to illiquidity and huge debts by distribution companies (discos). We need to go back to the drawing board and review the licensing of the discos,” he said.
The power sector was privatised on November 1 2013. However, it still relies on intervention support from the World Bank, the Federal Government and the Central Bank of Nigeria (CBN) to survive.
After privatisation, the sector was projected to grow its on-grid power to 40,000 MW in 2020. But as of 2023, on-grid power is slightly above 4,000MW, raising concerns about the efficiency of the privatisation.
Also, the Special Adviser on Energy and Infrastructure, Office of the Vice President, Sodiq Wanka, said ten years on, the objectives of the nation’s power privatisation had not been met as, according to him, about 90 million Nigerians still live in darkness due to a lack of access to grid electricity.
He noted that the key objectives of the privatisation were to improve the efficiency of the power sector, unlock private sector investments, and unleash the nation’s potential through an energized economy.
“I believe it is fair to say that the objectives of sector privatisation have, by and large, not been met. Over 90 million Nigerians lack access to electricity.
He further said the national grid only served about 15 per cent of the country’s demand. This, he said, left households and factories to rely on expensive self-generation, which supplies a staggering 40 per cent of the country’s demand.
“What is worse, is that the total amount of electricity that can be wheeled through the national grid has remained relatively flat in the last 10 years.
“The grid capacity has increased from just over 3,000MW to typically just over 4,000MW today. Versus a 40,000MW target by 2020 that the Federal Government had set for the pre-privatisation”, he said.
He also said that liquidity problems in the sector could be averted if cost-reflective tariffs were enforced while different stakeholders honour their commitments to terms of contracts entered into with the Nigerian Electricity Regulatory Commission (NERC) .
“As of the second quarter of 2023, for every kWh of electricity sent to the grid, only 60 per cent of it is paid for. But as we know, even the tariff paid for that unit of electricity is far from being cost-reflective, especially in light of the recent devaluation of the naira.
“The sector has suffered from chronic underinvestment, especially in transmission and distribution. Many of the successor utilities of the Power Holding Company of Nigeria (PHCN), have failed to meet their performance improvement targets due to technical and financial capacity issues,” he added.
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.