The recently released Energy Progress Report 2022, in collaboration with international organizations, has revealed the grim reality of Nigeria’s power sector. The report states that Nigeria has the lowest access to electricity globally, with a staggering 92 million people out of the country’s population of 200 million lacking access to power. This dire situation poses significant challenges to the country’s industrial growth, commercial ventures, and the overall well-being of its people.
Barrister Sunday Oduntan, the Executive Director for Research and Advocacy of the Association of Nigerian Electricity Distributors (ANED), recently shed light on the issue, stating that Nigerians spend an estimated N12 trillion annually on self-power generation. This staggering figure highlights the extent to which citizens are forced to rely on alternative means to meet their electricity needs due to the inadequacies of the national grid. Nigerian homes and businesses collectively produce around 40,000 megawatts (MW) of electricity using diesel and petrol generators each year.
The primary driver behind the prevalence of self-power generation is the low power generation capacity in the country. Nigeria requires an estimated 40,000MW to ensure a stable electricity supply, but the current infrastructure falls significantly short of meeting this demand. Various factors contribute to this failure, including corruption, energy theft, regulatory inconsistency and confusion, liquidity crises, non-cost reflective tariffs, and limited power generation. Additionally, the non-payment of debts by Ministries, Departments, and Agencies (MDAs) further exacerbates the financial challenges faced by the power sector, with outstanding debts amounting to a staggering N203.819 billion.
The report highlights that electrification advances in Nigeria have failed to keep pace with population growth, leading to the country’s abysmal access to electricity. In contrast, countries like Kenya and Uganda have made significant progress in electrification due to annualized increases of more than three percentage points between 2010 and 2020. Nigeria’s slow progress in electrification, coupled with population growth, has resulted in an increase of three million people annually without access to electricity.
The consequences of Nigeria’s power crisis are profound. The lack of a stable power supply stifles industrial growth, limits the expansion and profitability of commercial ventures, and hampers the overall well-being of the population. To address this issue, the government established the Rural Electrification Agency in 2005, tasked with electrifying rural and unserved communities. However, the progress in electrification has been insufficient to meet the needs of the growing population.
Fragility, underdevelopment, and conflict have further hindered progress in Nigeria’s electrification efforts. The Energy Progress Report identifies Nigeria, the Democratic Republic of Congo, Ethiopia, and Pakistan as the countries with the largest access deficits. Nigeria alone accounts for 92 million people without electricity, making it the worst globally.
To address this dire situation, comprehensive reforms, and substantial investments are urgently needed in Nigeria’s power sector. The government must prioritize the development of infrastructure, promote renewable energy sources, and create a conducive regulatory environment to attract private investment. Addressing corruption, improving governance, and ensuring the cost-reflective tariffs are also crucial to revitalizing the power sector.
The power crisis in Nigeria is not only a challenge but also an opportunity for the government to prioritize the well-being and economic development of its citizens. By taking decisive actions, Nigeria can transform its power sector, provide access to electricity for all, and unlock the immense potential for industrial growth and improved living standards.
Commenting on the country’s electricity problems, an expert who works with the Transmission Company of Nigeria, Paul Ashibogwu, said addressing Nigeria’s poor electricity problem requires a comprehensive approach that tackles various aspects of the power sector.
He said the government should prioritize investment in power infrastructure, including the construction of new power plants, upgrading transmission and distribution networks, and implementing smart grid technologies. He cited that adequate funding is crucial to expand the capacity and reliability of the country’s power system.
Also, an investor in Geregu Power Plant, Dr. Niyi Adegbesan, noted that Nigeria has abundant renewable energy resources, such as solar, wind, and hydro. He said the government should incentivize and attract private investment in renewable energy projects.” Expanding the share of renewable energy in the electricity mix can reduce dependence on fossil fuels, improve environmental sustainability, and enhance energy security,” he said.
He cited that, “Corruption and mismanagement have plagued the power sector in Nigeria. Strengthening governance structures, promoting transparency, and implementing anti-corruption measures are essential to ensure the efficient use of resources, attract investment, and build public trust. Regulatory agencies should enforce compliance and hold accountable those engaged in fraudulent activities.”
On his part, a lecturer at Nnamdi Azikiwe University, Awka, Dr. Felix Echekoba, said promoting energy efficiency measures can help reduce overall electricity demand and alleviate strain on the power system. He stated that this includes encouraging the use of energy-efficient appliances, implementing energy conservation programs, and promoting energy management practices in industries and buildings.
He further said, “Ensuring that electricity tariffs are cost-reflective is crucial for the financial sustainability of the power sector. Tariffs should be set at levels that cover operational costs, maintenance, and infrastructure investments. This will incentivize private sector participation, improve service delivery, and attract capital for further development.”
Further proffering solutions to Nigeria’s power conundrum, a lecturer at Ebonyi State University, Dr. Nelson Nkwo, said the distribution network plays a critical role in delivering electricity to end-users. He added that investment should be made to upgrade and modernize distribution infrastructure, reduce technical and commercial losses, and improve metering systems. He said this will enhance the reliability and quality of electricity supply.
Also speaking with NATIONAL ECONOMY, Engineer Sam Agbaso, a manager at Nigerian Bulk Electricity Trading (NBET), said “Collaborating with the private sector through public-private partnerships (PPPs) can bring in technical expertise, financing, and efficiency in the power sector. PPPs can support the development of new power plants, transmission lines, and distribution infrastructure, leading to improved electricity access and service quality.
“Exploring decentralized power generation options, such as mini-grids and off-grid solutions, can help bring electricity to remote and underserved areas. Engaging local communities and empowering them to participate in renewable energy projects can enhance energy access and promote local economic development,” he said.
NATIONAL ECONOMY notes that access to affordable financing is vital for power sector development. The government should work with financial institutions to create favorable lending conditions for power projects, provide guarantees, and establish dedicated funding mechanisms for the sector. This will attract private investment and facilitate the implementation of new projects.
Implementing these solutions will require strong political will, effective coordination among stakeholders, and sustained commitment to power sector reform. By addressing the root causes of Nigeria’s electricity problem and adopting a holistic approach, the country can overcome its power challenges and pave the way for sustainable economic growth and improved quality of life for its citizens.
