Toba Owojaiye Reporting
Nigeria’s power sector is on the brink of uncertainty as the decade-long privatization deal, initiated in 2013, nears its expiration on October 31, 2023. Despite government efforts, the country’s power industry remains beset by persistent issues that have hampered its growth for over 60 years.
The privatization process was launched as a solution to Nigeria’s longstanding electricity woes, driven by the 2005 Electric Power Sector Reform (EPSR) Act. However, after ten years, these problems persist, posing a significant barrier to the nation’s economic development.
One of the most glaring issues is the chronic lack of electricity supply. Nigeria, with a population exceeding 200 million, struggles to generate a mere 5,000 megawatts daily. Recent reports from the Nigerian Electricity Regulatory Commission (NERC) reveal that the generation capacity of 26 power plants has dwindled to 4,387.91MW, further compounding the issue.
Financial woes have plagued the sector, with substantial annual capacity payment losses totaling billions in Nigerian Naira. Despite government interventions, these losses continue to mount, impacting the country’s economy negatively. Industries, particularly manufacturing, have suffered annual losses in the trillions of naira due to the unreliable power supply.
In a bid to address these challenges, President Bola Ahmed Tinubu signed the 2023 Electricity Bill on June 9, raising hopes for much-needed change in the sector. However, the success of this bill’s implementation hinges on Nigeria’s Minister of Power, Adebayo Adelabu, who must provide the necessary policy direction to transform the sector.
Experts and stakeholders emphasize that effective implementation of the Electricity Act is critical. They advocate for decentralization and the establishment of robust regulatory institutions at both state and federal levels to enhance oversight.
Critics of the privatization framework, like Kunle Olubiyo, President of Nigeria Consumer Protection Network, call for a comprehensive appraisal of licensees’ performance and key performance indicators, urging the government to take action as the 10-year moratorium expires.
Adetayo Adegbemle, Convener and Executive Director of PowerUp Nigeria, highlights the urgency of addressing fundamental issues, including metering and the balance between generation, transmission, and distribution. A review of the regulatory framework will ultimately shape the Nigerian government’s response to the power sector’s persistent challenges.
In conclusion, as Nigeria’s power sector privatization deal approaches its expiration, the nation stands at a critical juncture. The successful implementation of the 2023 Electricity Bill and comprehensive regulatory reforms will determine the sector’s fate, impacting not only the country’s economic development but also the lives of its citizens.