The Federal Government acknowledged on Monday that the Nigerian Electricity Supply Industry (NESI) has not achieved its goals ten years after it was partially privatized.
At the 2023 NESI Market Participants and Stakeholders Roundtable in Abuja, President Bola Tinubu expressed disappointment in the current generation, transmission, and distribution capacity, which stands at just over 4,000 Megawatts.
He highlighted the concerning fact that, despite a decade of privatization, approximately 90 million Nigerians still lack access to reliable power supply. Emphasizing the unfulfilled expectations from the private sector, Tinubu, represented by Mr. Sodiq Wanka, Special Adviser, Energy and Infrastructure, Office of the Vice President, underscored the failure of the privatization efforts to achieve the desired objectives of enhancing power sector efficiency, attracting private investments, and stimulating economic growth.
“There are more than 90 million Nigerians without access to power. The country’s demand is only met by 15% of the national grid. Due to this, factories and homes are now forced to rely on costly self-generation, which meets an astounding 40% of the nation’s demand.
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Worse, over the past ten years, the total amount of electricity that can be moved over the national grid has stayed largely unchanged.
From just over 3000Mw to usually slightly over 4,000Mw today, the grid capacity has grown. Compared to a pre-privatization objective of 40,000Mw set by the Federal Government by 2020.
In response to the past government’s decision to pursue privatization, Minister of Power Adebayo Adelabu expressed reservations, suggesting that commercialization would have been a more favorable alternative.
He emphasized that the licenses granted to asset investors would not be automatically renewed unless they can demonstrate compliance with the terms outlined in the original license agreement. Adelabu highlighted the need for a comprehensive industry discussion to address the failures in achieving the privatization objectives, urging all stakeholders to collaborate and strategize solutions to rectify the situation.
Adelabu highlighted that the power sector should have been commercialized back in 2013. He emphasized that many countries worldwide do not privatize their entire electricity supply chains, including generation, transmission, and distribution. Addressing the current situation, he stressed the importance of collective efforts from all stakeholders to achieve the sector’s priorities and objectives.
Adelabu further cautioned that when the operational licenses of distribution companies (DisCos) expire, renewals will not be automatic. He emphasized that companies failing to meet expectations would not have their licenses renewed, emphasizing the need for accountability and adherence to performance standards in the sector.
Senator Godswill Akpabio, represented by Chairman of the Senate Committee on Power, Eyinaya Abaribe, acknowledged the significance of the power sector in the country’s economic growth, emphasizing that substantial progress remains elusive. While recognizing some advancements, the objective of enhancing power supply for Nigerians has yet to be fully realized.
Akpabio affirmed the parliament’s dedication to enacting laws that would foster an optimal business environment within the sector. He highlighted the ongoing process of amending the 2023 Electricity Act, ensuring its alignment with the latest developments in the industry.
The Chairman of the Conference Organizing Committee, Prof. Stephen Ogaji, highlighted the formidable challenges encountered by the power sector. Stressing the pivotal role of the energy sector in any thriving economy, he underscored the collective commitment demonstrated through the NESI Roundtable in advancing this crucial sector.
“As representatives from a range of sectors, including the public and private sectors, regulatory agencies, investors, technocrats, and visionaries, we have come together today with the common goal of improving and directing Nigeria’s energy future.”
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