Exactly a year ago, President Bola Ahmed Tinubu signed the new Electricity Act into law, repealing the EPSRA with the aim of consolidating the laws relating to the power sector in Nigeria, including the integration of renewable energy into Nigeria’s energy mix. A key feature of the law is the recognition and inculcation of the state’s serious participation in the sector.
However, the failure of state governments to embrace this opportunity could hinder national development. Relying solely on the national grid, which has long been criticised for its unreliability and lack of investment, is insufficient.
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Funny as it may be, the country’s national grid collapsed eight times in 2022, and in the first half of 2024 alone, the grid has collapsed more than eight times. Recently, Benin Electricity Plc reported that Ondo and Ekiti states will have a partial power supply for two months due to the Transmission Company of Nigeria’s routine maintenance. So, businesses that rely on daily production and manufacturing will be deeply affected by such activities. Also, the Transmission Company of Nigeria’s 132 kV line from Osogbo to Akure has an undersized cable, which regularly affects the voltage level transmitted to Ado-Ekiti and its environment. The same can be said of the national grid infrastructure, which, due to its ageing nature, cannot serve the intended purpose anymore.
Former Minister of Power, Works, and Housing, Mr Babatunde Raji Fashola, highlighted the cost-effectiveness of transmitting power within states (citing the Calabar to Jos example) compared to constructing extensive infrastructure like gas pipelines. He advocated for domesticating power plants within states to provide electricity to local communities and businesses, thereby attracting foreign direct investment (FDI).
Worthy of mention is that by keying into the provisions of the new Electricity Act, state governments will also help to fight insecurity. Criminal activities thrive in darkness, but a well-lit environment deters perpetrators. Illuminating streets and installing CCTV cameras can enhance public safety and reduce the need for extensive security investments.
Data from the Organisation for Economic Co-operation and Development (OECD) shows that in 2020, over 140 million Chinese SMEs contributed significantly to GDP, tax income, technological innovation, and job creation. In contrast, a 2021 survey in Ondo State revealed that nearly 80 percent of businesses experienced inadequate or irregular power supply, hindering economic activities. Undoubtedly, reliable electricity is crucial for SMEs to thrive, creating jobs and increasing state revenue. Today, many young people who could have contributed to the IGR of various states through various engagement initiatives are left to either ride motorcycles or remain idle. Whereas, if proper care is given, with incentives and power reliability by state governments, the revenue and value-added from the SMEs will catapult a state to a whole new level.
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Developed nations recognise the importance of reliable power. For instance, as of December 2021, Canada had about 1.2 million SMEs, accounting for 99.8 percent of all employer businesses and contributing significantly to GDP. Nigeria can achieve similar success if state governments prioritise electricity reliability.
It would, however, be unfair not to recognise the contribution of some of the states that had already keyed into the new Electricity Act—states like Enugu, Ondo, Ekiti, Lagos, and Oyo have initiated policies to leverage the new Electricity Act. Though the progress of those new policies would be subjected to further discussion, the most crucial thing is that they had taken commendable steps to have sufficient power for their own people. Lagos, for example, partnered with the Harvest Waste Consortium to build a waste-to-energy plant, converting daily waste of up to 2,250 metric tonnes into 60–75 megawatts of electricity. Oyo State could similarly harness the Ikere-Gorge Dam for power, benefiting agro-businesses in the region.
Power availability is vital for modern agricultural practices, from planting to processing. Technology enables crop production in urban areas, but this requires reliable electricity. In healthcare, state-owned hospitals often struggle due to power outages. Instances of using torch lights during childbirth and limited laboratory tests due to irregular power, especially at primary health care centres, are unacceptable. Reliable power is essential for healthcare facilities to function effectively, reducing mortality rates and improving health outcomes.
The new Act grants states regulatory oversight of mini-grid projects, provided they establish the necessary legal and institutional framework. States like Lagos, Ondo, and Ekiti have made progress, but others must follow suit. We cannot continue to have state leaders who think for themselves and do not consider the impact of making the wrong policies and decisions. For example, the Sokoto government in 2018 initiated a diesel-powered plant without considering fuel costs, despite having abundant solar resources. Understanding the primary source of electricity and conducting thorough research is crucial.
Ghana’s recent construction of Africa’s largest floating solar PV plant in Bui, which is expected to sustain so many SMEs across the country, demonstrates the potential for innovative solutions. States with abundant water resources can adopt similar projects, partnering with international companies for sustainable power solutions. These environmentally and commercially viable initiatives are welcome, going by the provisions of the Electricity Act.
Year in, year out, state governments struggle with basic responsibilities due to low internally generated revenue (IGR). Prioritising electricity reliability can transform state economies. In China and other developed nations, entrepreneurship is encouraged through the provision of essential amenities, including power.
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As a computer programmer, for example, pursuing a career without a functional computer system and reliable electricity is nearly impossible. This challenge, among others, drives young entrepreneurs to Lagos, a state committed to empowering its people by ensuring adequate power supply. Lagos’ dedication to reliable electricity creates an environment conducive to innovation and entrepreneurship, attracting talent from across the country. Reliable electricity can unlock the potential of young entrepreneurs, fostering innovation and economic growth.
States have to rise up to provide an alternative to the irreparable mess we have found ourselves in so as to promote their respective economic activities. Power generated in Ogwashi-Ukwu can serve the people of Delta North, and the same can be replicated across the state. Whatever it takes to revive the situation must be done right now, as states cannot continue to depend on the nation’s monthly cake. The people need jobs, and miracles cannot solve that. Only high initiatives from the state can ensure constant power supply and, ultimately, a conducive environment.
The success of a nation depends on the collective efforts of its sub-nationals. State participation in electricity generation and distribution is crucial for Nigeria’s development. This is a call to action for state governments to embrace the new Electricity Act and harness its benefits for their people. The potential for growth and progress is immense, but it requires commitment and strategic implementation from every state.
Oguntoye Opeyemi
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