BusinessDay

Power outage deepening Nigerians’ woes

... Aso Rock, MDAs in darkness, run on generators ... Experts warn of economic consequences ... Gencos say N1trn debt crippling generation

Nigerian households and businesses have been hard hit by a double whammy of a lingering fuel crisis and worsening power outage, with economic activities being crippled across vital sectors.

In Abuja, private and public offices, including the Federal Secretariat, which houses most of the Ministries, Department and Agencies (MDAs), had resorted to spending huge funds on alternative power sources, especially generators, amid high petrol and diesel prices.

BusinessDay reliably gathered on Monday that the nation’s seat of power – Aso Rock Presidential Villa – was not spared from blackout as it ran on power generators for most of the day.

This comes at a time President Muhammadu Buhari is vacating in London for a medical check-up.

A Presidency source told BusinessDay that the State House Conference Centre had been running on diesel-powered generators in recent times.

“People are complaining about power supply. The Presidential Villa is not different; the place runs on generators daily,” the source said.

According to the source, the power system is run by Julius Berger staff, which also supplies diesel fuel for the generator.

When contacted, Garba Shehu, senior special assistant to the President on media and publicity, referred one of our reporters to the recent media briefing addressed by Abubakar Aliyu, minister of power.

“The minister just briefed you last week. I have nothing new to tell you for now; no, nothing,” he said.

BusinessDay observed that several ministries at the Federal Secretariat, Abuja were in partial or total blackout.

Civil servants, who were seen idle in their offices, said they could not execute their tasks due to the power outage, and that activities had generally slowed down.

BusinessDay gathered that the blackout at these ministries could last for up to 20 hours a day.

At the office of the head of civil service, it was gathered that there was a severe power outage throughout last week. A staff member, who, at about 1pm, had already closed for the day and was on her way home, said she had not been able to do anything since resuming work Monday morning. “We can’t do anything. We can’t make payments, make orders or any transaction,” she lamented.

Another staff member said, “The light situation is a complete mess. No light at home, no light at work. Last week, there was no light from Monday to Friday at the service; currently there is no light. Whenever they decide to bring the light, it’s usually very late, when workers have already closed.”

Read also: Power cuts exposes Nigeria’s diesel-dependent economy

At the Ministry of Health, including the office of the minister, there was a complete blackout. A staff member at one of the departments said the light situation had been unreliable. “The situation even crippled a meeting at the minister’s conference room and nothing happened,” he said.

An official at the SERVICOM department in the ministry said, “This light situation is worse now. They brought the light very briefly this morning, and we won’t see this light till tomorrow. It’s affecting our work seriously. The offices are not conducive to work due to the heat and that’s why you see us standing here. I work with the Servicom office; just look at the entire building, there is no light.”

The situation is no different at the Ministry of Education. “Work has stopped because the light situation has been very very bad, and the generator can only power the first to third floor. From the fourth floor upward has no light,” a staff member told BusinessDay.

At phase one of the Federal Secretariat, workers lamented the same issue. An administrative officer at the Office of the Secretary of the Government of the Federation, who identified himself as Mr Friday, said, “The situation has persisted for close to two months and is causing a lot of problems and confusion. The worst part is that they take it during work hours and bring it mostly at night when it’s basically useless.”

BusinessDay also learnt that the National Assembly had been running mostly on a generator in recent weeks due to poor power supply.

Recently, a panel of the House of Representatives investigating “alleged cases of indiscriminate and unlawful administrative charges on contracts and percentage charges on projects implementation by MDAs” had its activities stalled by blackout.

The power outage, which lasted for more than 45 minutes, led to an abrupt halt of the proceedings at the Committee Room 414 of the House wing, forcing the lawmakers to vacate the venue angrily.

But as the situation persists, authorities continue to trade blame on who and what is responsible for the worsening power outage across the country which has seen businesses crumbling and Nigerians suffer terrible heat waves.

On March 3, 2022, Aliyu, power minister, blamed the situation on low hydro capacity during dry season and maintenance work at gas plants.

“I would like to discuss the increased load shedding you may have observed in Abuja and other areas in the country. With the reduction in hydro capacity during the dry season, additional load needs to be taken up by our gas plants,” he had said.

Last week, Aliyu blamed the situation on a myriad of issues, including poor gas delivery, poor access to forex insufficient/weak transmission infrastructure to adequately evacuate/wheel power, and issues of Right of Way, among others.

He also accused the MDAs of non-payment of electricity bills as contributing to the huge debt profile of the power distribution companies (DisCos).

Transmission Company of Nigeria (TCN), in its reaction, said the nation-wide load shedding was as a result of very low power generation by the generation companies (GenCos) for it to wheel through the transmission grid to the DisCos nationwide.

But in a reaction to TCN’s claims, the Gencos said the N1.644 trillion owed them by the Nigerian Bulk Electricity Trading Plc (NBET) was crippling their operations.

Joy Ogaji, executive secretary of Association of Power Generation Companies, who addressed a press conference, said the amount was as a result of accumulated unused capacity, which spread through 2015 to 2022.

At the time of filing this report, the power minister was convening an emergency meeting with all power sector stakeholders to find solutions to the problem.

While the blame game continues, experts warn of the negative economic consequences of this development for inflation and output growth, especially coupled with the impact of shortage of supply of petroleum products.

They noted that businesses – mostly the small ones – had continued to suffer escalating costs, and some of them would hardly survive the next week if the situation persisted.

Last week, BusinessDay witnessed how Jane and her husband, Thomas, who jointly run a hair and nail salon around the very popular Wuse market, ran a generator to service their customers all through last week Wednesday.

“The light situation has been horrible for the most of three weeks now,” Jane said.

Also, Elizabeth Chirkpi, a resident of APO Area of Abuja and CEO of Cacia Concept, lamented that it had been unbearable for her to run her home and business as a result of the power outage.

Chirkpi told BusinessDay that she had to buy fuel from black marketers to power her home and shop to avoid wastage of foodstuff and to keep her business moving, saying her expenses had tripled.

“I must say that it has not been funny. At home, one can hardly sleep and you know what that means to someone that is working.”

John Umar, an Abuja-based financial analyst, said, “The concern really is of a possible higher inflationary pressures in the next couple of months as households and businesses dependency on petrol and diesel have increased significantly in the last month.

“This significant rise in fuel costs, in addition to the lingering fuel scarcity, will cause a significant rise in utility costs. Given that the utility sub-basket constitutes 32.6 percent of the core inflation, core inflation may likely continue to rise in the short term.”

He said the increase in commodity prices as a result of the current poor power situation and high fuel costs would have a negative pass-through effect on food prices from higher transport costs.

Food inflation has been one major driver of headline inflation in the last five years. The last couple of months witnessed a decline in food Inflation and by extension headline inflation.

Umar said, “However, should this current mix of power epilepsy and high petrol cost persist, we could see food inflation rising as high as 19-20 percent, with headline inflation settling at 17-18 percent in the medium term as a result.

“Businesses would be hit the hardest as initial budgets might have to be restructured as the current price increase of commodities would leave them at the mercy of either shutting down or transferring the cost to the general economy via their customer base.”

Speaking with BusinessDay, Odutayo Oluseyi, assistant director of press for the power ministry, said efforts were ongoing to resolve the electricity issues across the country.

“Just as the government has said before, we are having issues with power generation, but it will soon be over because necessary actions are being taken by all relevant agencies,” he added.

Get real time updates directly on you device, subscribe now.