President Bola Ahmed Tinubu has stated that despite the privatisation 10 years ago, over 90 million Nigerians still lack access to electricity.
Speaking at the 10th year anniversary of the Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders Roundtable yesterday in Abuja, the president lamented that the national grid only serves about 15 percent of the country’s demand, leaving households and factories to rely on expensive self-generation.
The president who was represented by his Special Adviser on Power Infrastructure, Sadiq Wanka, stated this has left households and factories to rely on expensive self-generation, which supplies a staggering 40% 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 3000MW to typically just over 4,000MW today. Versus a 40,000MW target by 2020 that the Federal Government had set pre-privatization.”
He also decried for every kWh of electricity sent to the grid, only 60 percent 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.”
He noted that the reasons for the underperformance of the sector in the last decade are well known as there are deep commercial, governance and operational issues that have beleaguered the sector.
“Only around 45 percent of NESI customers are metered today, with wide variations across DisCos. The scale of investment needed to meter current and new customers and replace obsolete meters is not trivial. The Government is committed to supporting the metering drive through the World Bank DISREP programme which should add at least 1.25 million meters, while activating the Meter Acquisition Fund to procure another 4 million meters. But we must also realize that long-term sustainable metering should be within the remit of DisCos and their partners.”
He added that there needs to be a clear plan to rebase tariffs to recognize the real costs and loss levels of the entire value chain, while allowing adequate cost recovery for investments.
On his part, the Minister of Power, Adebayo Adelabu, said licences given to the private sector during the privatisation of the electricity supply chain in 2013 would not be renewed without some indices met by the companies awarded the license.
Adelabu stated that with the licences expected to expire very soon, the federal government would scrutinize the investments and infrastructure that have been made in the sector by the companies.
While stating that the country has achieved little progress in the sector since the privatisation, he said it is shameful Nigeria is still stuck in the generation of 4,000 megawatt of power.
He also stated that, in his opinion, the privatisation of the sector was not good for the country, rather commercialisation should have been conducted with the government heavily involved in the sector.
He premised this on the fact that private investors are not patient enough with the time it would take for the sector to yield profits they intend to make.