Forum decries inefficiencies in power sector

Participants at a breakfast meeting organised by Time Economics in collaboration with BusinessDay, on Wednesday, decried the many deficiencies inherent in Nigeria’s power sector.

This is even as Ogho Okiti, CEO of Time Economics, an economics consulting firm, urged the Federal Government to diversify the nation’s energy mix so as to create room for optimal utilisation of other energy sources like coal.

Taking turns to air their experiences and observations about the nation’s unstable power generation, transmission and distribution system the participants drawn from different fields said the inefficiency of the power structure was seriously back-pedalling the nation’s economic development.

Tope Fasua, an economist and president of Institute for Service Excellence and Good Governance in his reaction after a presentation by Okiti, posited that there was need for Nigeria to imitate what China was doing in their power sector.

Fasua, while advocating for energy efficiency in the country, submitted that China despite its huge industrial economy was still able to provide sufficient energy for its large consumers, adding that there must be some level of energy efficiency system there worth Nigeria’s emulation.

Several participants at the November edition of the monthly meeting, which provides a platform for robust discourse on the nation’s economy, decried the high level of extortion and poor resolution of customer complaints, especially as related to the infamous estimated billing system, unstable power supply and a myriad of other problems.

In his presentation, which focused on the nation’s power sector, Okiti highlighted some of the problems of the power sector as: Inadequate generation capacity, inefficient utilisation of generation capacity, inadequate transmission capabilities, low bill collection rate and under-pricing.

He stated that according to a World Bank estimation, “losses due to under-pricing of power, compared to an efficient pricing benchmark are 0.13% of Nigeria’s GDP,” adding however that customers are unlikely to tolerate higher tariffs unless supply reliability improves.

The Time Economics boss further stressed that another big problem with the sector is the over centralization of power system. While calling for the decentralization of the system, he added that there is need to create more off-grid power generation system.

Proffering further solutions to the problems he earlier highlighted, Okiti advised “the regulatory and operating environment should continue to be made as favourable as possible in order to attract more private capital and investment to the sector.”

“Bill collection rates need to be improved as well as power theft reduction. Closing the bill collection gap will provide the sector with the resources and confidence needed to make investments in increasing capacity.

“All government agencies should endeavour to clear their outstanding bills. Also equipment and facilities need to be properly maintained in order to ensure capacity is preserved.

“In addition to increasing capacity, the industry need to improve on predictability and reliability of power supply, also all available and cost effective sources of energy particularly coal, need to be utilized in order to diversify the energy mix and reduce reliance on natural gas,” Okiti advocated.