As Nigeria’s decade-long power sector privatization nears its October 31, 2023, deadline, unease grows amidst persistent crises that have plagued the sector for over 62 years.
Initiatives like the 2005 Electric Power Sector Reform (EPSR) Act and the 2013 commencement of privatization aimed to resolve these deep-rooted issues. Despite these efforts, the sector’s ailments, particularly in distribution, generation, and transmission, continue to hinder economic progress.
According to a report by Daily Post, electricity distribution companies grapple with liquidity and low remittance, exacerbated by metering gaps. In contrast, generation companies face investment scarcity and transmission shortcomings, resulting in regular grid collapses. Consequently, providing a meager 5,000 megawatts for a burgeoning population of 200 million remains a struggle.
The Nigerian Electricity Regulatory Commission’s 2023 report highlights a dismal drop in generation capacity to 4,387.91MW across 26 power plants. Annual capacity payment losses, reaching staggering billions between 2015 and 2022, reflect the sector’s dire state.
Government interventions, including substantial financial injections in 2014, 2017, and 2019, have failed to stem the sector’s decline, impacting industries nationwide. Specifically, manufacturers report annual losses amounting to N10.1 trillion due to power inconsistencies.
Hope sparked with President Bola Ahmed Tinubu’s 2023 Electricity Bill, envisaging transformative sector-wide application. Yet, implementation remains key, urging Nigeria’s Minister of Power, Adebayo Adelabu, to provide decisive policy direction.
Experts advocate the Electricity Act’s comprehensive application, emphasizing decentralization and robust state and federal regulatory frameworks. Wumi Iledare, of the Emmanuel Egbogah Foundation, stresses the importance of law adherence for market structure optimization.
Meanwhile, stakeholders like Kunle Olubiyo and Adetayo Adegbemle highlight the privatization framework’s flaws, urging a critical review post-moratorium. Adegbemle suggests immediate, actionable solutions like consumer metering and system balancing to revitalize the sector.
As the deadline approaches, the call for a strategic overhaul intensifies, demanding accountability, effective regulation, and an open door for global investors, all aimed at rescuing a critical sector upon which Nigeria’s economic revival depends.
