Nigeria grapples with huge electricity deficit

Almost two years after the privatization of the power sector, Nigerians still depend on self generation for their power needs. The cheer which followed the transfer of the task of electricity generation and distribution to private investors has since faded.

Recently, the Africa Progress Panel disclosed that about 93 per cent of Nigerians have no access to electricity. The group therefore called on African governments to set out timetable and strategies for achieving universal energy access.

Nigeria’s electricity generation has been stagnant since August this year, when it managed to hit 4,810.70MW after several years of hovering around 2,000MW.

Industry experts have said that many of the buyers of the power firms came into the sector unprepared for the magnitude of investments required to upgrade the assets as well as bring on stream new capacities. They noted that the less-than-expected performance of the private investors also highlighted the failure of the government to address a couple of challenges bedeviling the sector before the completion of the privatisation process.

Besides the unresolved fundamental issues inherited from the era of government control and management of the power sector, experts also said that the financial challenges faced by most of the private investors slowed down investment into the Nigerian electricity supply industry one year after the privatisation.

The Africa Progress Panel believed that Africa’s leaders have no choice about tackling the region’s chronic deficits in power generation and energy access.

Kofi Annan Chairman of the panel, at the United Kingdom Department for Development (DFID) ‘Energy Africa’ campaign launch said that over 300 million will still lack access on current trends by 2040, ten years after the target date under the new development goals for universal energy access adding that Africa does not have to follow the carbon-intensive pathway and energy practices of rich countries and emerging economies that have brought the world to the brink of catastrophe.

Annan said that “621 million Africans live without access to electricity – a figure that includes 95 million people in Nigeria, the region’s energy export powerhouse. We estimate that over 300 million will still lack access on current trends by 2040 – ten years after the target date under the new development goals for universal energy access. This is intolerable, avoidable and profoundly unfair. It leaves the world’s poorest people to pay the world’s highest power prices. A woman in a rural village in northern Nigeria spends 60 to 80 times more per unit of energy than a resident of London or New York”.

“This is not just an injustice. It is a market failure of epic proportion. Households are losing out as a result of higher prices, investors are losing out on market opportunities, and countries are losing out from a failure to harness productive technologies. Furthermore, almost four in five people rely for cooking on solid biomass, mainly fuelwood and charcoal. As a result, 600,000 people in the region die each year from household air pollution”, Annan added.

He noted that too often, governments and investors are held back in their ambition by the slow pace of negotiations involving multiple aid donors, development finance institutions and multilateral agencies.

Annan believed that an enabling environment must now be created to allow this growing pool of energy investors to deliver clean energy “off grid” in a way that is simple for both investors and consumers to understand.

“This generation of African leaders has a unique opportunity to deliver on the promise of energy for all.

“For too long, governments have been content to oversee highly centralized energy systems designed to benefit the rich and bypass the poor. Power utilities have been centres of corruption, inefficiency and vested interest”, he added.

The group urged Africa government to use the region’s natural gas to provide domestic energy as well as exports, while harnessing Africa’s vast untapped renewable energy potential.

They also want the leaders to cut corruption, make utility governance more transparent, strengthen regulations, and increase public spending on energy infrastructure.

“Redirect the $21 billion spent on subsidies for loss-making utilities and electricity consumption – which benefit mainly the rich – towards connection subsidies and renewable energy investments that deliver energy to the poor”, it added.

The group also calls for strengthened international cooperation to close Africa’s energy sector financing gap, estimated to be $55 billion annually to 2030, which includes $35 billion for investments in plant, transmission and distribution, and $20 billion for the costs of universal access.

Meanwhile, the Federal Government has blamed high population growth for the country’s inability to meet the energy needs of its citizens and business outfits. Babachi Lawal, Secretary to the Government of the Federation, at the inauguration of the Nigeria Energy Calculator developed by the Energy Council of Nigeria in Abuja said effective planning was strategic to sustainable energy development in the country.

He said, “The growth in energy demand far exceeds supply principally due to high population growth rate and expansion of economic activities. It is in realisation of the dire need for enhanced energy security in the country that the Federal Government adopted the dual strategy of increasing capacity as well as diversifying the energy supply base”.

FRANK UZUEGBUNAM