• Sunday, July 14, 2024
businessday logo


Power failure: A fact of life in Nigeria (1)  

It has been acknowledged by our leaders that one of the failings of public policy in Nigeria has not been the dearth of policies but actually the non-implementation of such policies. For a long time Nigerians have been wondering why these leaders cannot do something worthwhile and commendable to ensure that policies are implemented faithfully by those saddled with the responsibility of executing them. The year 2020 is fast approaching and the nation is expected to generate 20,000 megawatts (MW) of electricity in line with Vision 20:2020. This is to enable the nation rank among top 20 economies in the world. Anyone following events in the power sector would be perturbed by incessant power failures in the country such that questions will be asked as to the sincerity of government to actualize its promise to deliver 20,000 MW to the national grid. Indeed, poor electricity supply has been alleged to be one of the several factors affecting decline in the growth of the manufacturing sector in Nigeria. It was the lacklustre performance of the economy and indeed the power sector that led to a decision at the Federal Executive Council to reform critical sectors of the economy in Nigeria.
The reform philosophy is anchored on the proposition that government should legislate, regulate and tax businesses, not to be an operator competing with citizens. Thus, privatization of the nation’s power sector became the only option to improve the performance and efficiency of the sector, although it was unpopular at inception due to public perception that it will only benefit the rich, hurt the poor, lead to loss of jobs, exacerbate wealth, income and political inequality and engender corruption. Irrespective of views expressed individually or collectively, privatization has come to stay but whether it is the best option for the power sector is a matter for critical analysis in the future. It became an option, however, because policymakers believe that the ‘private sector should be the leading engine of growth, while government should forge partnerships with the private sector and other stakeholders in policy formulation, reform and implementation’.
Accordingly, the power sector was identified as one of the critical economic sectors requiring focused reform, foreign investment and market-based competition.
Essentially, objectives of the power sector reforms include: ‘improvement in efficiency and affordability of power supply; encourage private sector participation and competition; attract investment; establishment of an independent regulatory agency to ensure a level playing field for all market participants; and provision of conducive environment for long-term development of the sector’. The areas of the power sector reform objectives which cover improvement in efficiency and affordability of power supply and provision of conducive environment for long-term development of the sector are of concern in this piece.
At the inception of privatization of the power sector in the year 1999, electricity-generating capacity was estimated to be about 1,750 MW. In the year 2005, report has it that 3,000 MW of electricity was generated, while estimated minimum demand was 8,000 MW. That is, within six years the nation was able to generate an additional 1,250 MW, which is a growth rate of 11.9 percent per annum. If the nation could only generate 3,000 MW in 2005 when the demand was 8,000 MW, it could be appreciated why there was blackout in most parts of the country and almost a total collapse of the economy with industries and households yearning for electricity which they never got. This is due to a deficit of about 5,000 MW of electricity on the national grid which disabled consumers from having uninterrupted electricity power supply.
In the year 2015, which is just five years from the time we are expected to have 20,000 MW. it is unfortunate that the power generation in the country is just about 5,000 MW as reported in some newspapers. At the time of writing this article, there were several figures in the public domain regarding the total energy delivered to electricity consumers across the country. While the minister of power, Chinedu Nebo, claimed that ‘power generation was hovering around 5,000 MW on 17 February, 2015, there was a newspaper report exactly a week after with the title ‘Nigeria loses 1,500 MW of electricity’. Furthermore, the newspaper report alleged that ‘total energy sent out to electricity consumers as of 17 February, 2015 stood at 3,424.11 MW, though the average national demand is 12,800 MW’. These figures do not tally and are consistently inconsistent. In fact, who is correct, who is wrong and why did we lose 1,500 MW of electricity? Where was 1,500 MW of electricity lost? Nigeria loses electricity almost on a daily basis, why? Some say it is due to gas pipeline vandalism amongst other frivolous reasons. It is only gas pipeline vandals who have not stated reasons for this heinous crime allegedly committed. For goodness’ sake, how do we classify a nation where some individuals have made up their minds to either overtly or covertly destroy what will benefit all? Is the Federal Government saying that it cannot evolve countermeasures to permanently stop pipeline vandals from perpetrating this act of economic sabotage in the nation?
If actually the nation is able to generate, say, 8,000 MW, with adequate measures put in place to sustain supply to consumers, the electric power supply situation in the country would have been better than what we have today. Are these figures being brandished by agents of government as a ploy to curry favour from the electorate, so that the ruling party may emerge winner at the polls during next elections? Further, any keen observer of the power sector will find out reasons behind the sluggish response of electric power output in Nigeria in response to increase in consumer demand despite huge amount expended by the Federal Government. For purposes of analysis, it is better to be fair to both the Federal Government and electricity consumers. Accordingly, it is assumed that the nation is currently generating 4,000 MW and in the past 10 years, the annual growth rate of electricity generation in Nigeria is 3.33 percent, while the annual growth rate of demand is 6.0 percent.
Currently, the nation can only boast of about 4,000 MW which is almost one-third of the estimated minimum demand of 12,800 MW. If it took the nation almost 16 years (1999-2015) to generate 4,000 MW only, it is very unlikely that by the year 2020 the nation will generate, transmit and distribute 20,000 MW of electricity. This assertion is debatable. Consequently, power failure is a fact of life in Nigeria as most companies are operating their own electricity-generating plants with attendant implications for costs and disruption of production within the economy. There are equally several households running various sizes and shapes of generators almost every day of the week throughout the year. This portends grave implications for the nation’s economy and this is disturbing. Subsequent articles on the discourse will be looking at the paralyzing effect of power failure on Nigeria’s economy in the year 2015 and beyond.
MA Johnson