The inauguration of President Bola Ahmed Tinubu on Monday heralds a new era for the country after an unsuccessful attempt by the immediate past President Muhammadu Buhari to break the jinx facing Nigeria’s power sector.
In 2015, when Buhari assumed power, he promised to revamp Nigeria’s transmission, distribution and generation subsectors of the power industry.
Eight years later, he exited the seat of power, leaving the sector unchanged.
According to data by the Nigerian Electricity Regulatory Agency, NERC, available power generation capacity stood at 4,712.34MW in the First Quarter of 2022.
The Nation had continued to hover around the generation capacity of 4,000MW to 5,000MW in a country with over 200 million population. Meanwhile, of the generated electricity capacity, the Electricity Distribution Companies, DisCos, could only absorb less than 3, 802MW per day in July 2022. However, Nigeria needs a massive 25,000–40,000 megawatts (MW) of power supply.
Challenges in Nigeria’s Power Sector
The challenges in Nigeria’s power sector cut across the transmission, distribution and generation sectors.
The continued collapse of the National grid had characterised the power sector in the eight years of Buhari’s administration. On 15 May, the grid collapsed for the 99th time since 2015.
Report has it that in May 15, 2023, the national grid dropped to 221MW out of over 4,500MW routine available capacity. Accordingly, of over 16 active plants in the country, only three were on the grid at the time; Omotosho was on the grid with 132.90MW, Omotosho NIPP was also on the grid with 78MW, while Rivers IPP was on the grid with a generation of 10MW.
Since privatising the power sector in 2013, the national grid has collapsed 130 times.
In a report by NERC, the national grid collapses in 2015 were 10. That rose to 28 in 2016, while 21 cases were recorded in 2017. NERC listed the cases in 2018, 2019, 2020, and 2021 as 13, 11, four and four, respectively. Last year, the grid failed seven times, among others that the commission did not capture.
As a solution to addressing the challenges in the power sector, Buhari’s government in 2020 launched the $2.3 billion Siemens deal, dubbed the Presidential Power Initiative (PPI), to unlock Nigeria’s electricity generation to 25,000 MW in six years; however five years down the line, the project has not impacted the industry.
The challenges led Buhari into a cabinet reshuffle, with a focus on the Ministry of Power. Babatunde Fashola, who served from 2015 to 2019, had the ministry removed from his portfolio and given to Mammah Saleh (August 2019 to September 2021) and then Abubakar Aliyu whose tenure ended on Monday. However, despite the efforts of Buhari and his men, the sector continued to suffer setbacks.
Speaking on Monday, the President of Network of Energy Reforms Nigeria, Nigeria Consumer Protection Network, Mr Kunle Olubiyo, stated that the power success had failed on all fronts under the Buhari administration.
He said electricity tariffs were increased by 500 per cent in the eight years of Buhari’s government without a commensurate improvement in the quality of services to consumers.
“Between 2016-2023, there was about a 500 per cent increase in electricity tariff without a corresponding increase in power generation, transmission, and distribution via the national electricity grid.
“Power sector’s failure in maximising the inherent potentials of the sector was largely due to failure of institutions and overbearing political interferences in the day to day business operations of the sector, resulting in a decline in power supply to Nigerians in the most unprecedented and embarrassing manners.
“In the years under review, there were largely pronounced failures of regulatory institutions in charge of enforcing market rules, extant operational rules and general failure of enforcement of regulatory framework”, he stated.
Also, Bode Fadipe, Global Power & energy sector policy analyst, said Buhari had not significantly impacted the Nation’s power sector.
He decried that the state of things in the market had remained convoluted under Buhari.
He noted that most of the challenges Buhari met in 2015 were eminently available after his exit on Monday.
“For operations, the Buhari administration did not depart remarkably from what it met on the ground. The state of things in the market continued to remain convoluted.
“From generation to distribution, the challenges that the administration met when it took over power in 2015 – three years into the privatisation were still visible even in the administration’s twilight.
“The number of grid system outages, the inability of the Siemens project to address operational issues and bring the necessary succour to end users of Electricity, the takeover of 6 of the DisCos (Abuja, Kaduna, Kano, Ibadan, Benin & Port Harcourt) by financial institutions for lending delinquency, the notice of withdrawal of the licence of Kaduna DisCo, the periodic threat by generation companies to withdraw their service, the disturbing silence from the regulator even with the new policy direction provided by the 1999 Constitution are all indicators of a market that requires more than a mere glance by an administration that came on the mantra with a mountainous promise to make a difference within the Constitutionally allowed time to make a change”, he stated.
Similarly, Mr Joseph Eleojo, an energy expert, reiterated that nothing changed in the power sector under Buhari’s government except the increase in electricity tariffs.
He noted that Buhari’s administration only paid lip service to electricity generation in Nigeria.
“Foremost, nothing has changed in the electricity sector despite the so-called reforms. The generation has not crossed 6,000 Megawatts for a Country of over 200m people since the Military regime.
“What has changed in the electricity sector? He just increased tariffs without corresponding service. The Buhari Government only paid lip service to electricity generation”, he said.
Can Tinubu break the jinx in the power sector?
Tinubu, during his inaugural speech on Monday, had promised that his administration would undo the many challenges facing the country’s power sector.
He said, “Electricity will become more accessible and affordable to businesses and homes alike. Power generation should nearly double, and transmission and distribution networks should be improved. We will encourage states to develop local sources as well”.
The specifics of how Tinubu would achieve the above feat in the power sector have remained to be determined.
It was not all bad during Buhari’s government as it completed the Kashimbila Multipurpose Dam, 40MW Hydropower Station and Associated 132KV Switchyard, Transmission Line and Distribution Substation located in Taraba state, 50 megawatts (MW) Maiduguri emergency power project and other projects.
Olubiyo advised Tinubu to review the entire gamut of the power sector.
According to him, the privatisation project of the country’s power sector had failed to achieve its desired outcome, hence the need for a drastic turnaround.
“The incoming administration should review the entire gamut of the power sector privatisation in its present state, which has failed to achieve the desired results despite huge investments.
“Electricity is a major enabler for job creation, industrialization, sustainable growth and development. The need for the incoming administration to get it right with electricity can not be over-emphasised,” he said.
Eleojo said Tinubu must prioritise electricity generation and distribution if he must succeed on the economic front.
He stated that Tinubu must undertake drastic reforms beyond rhetoric.
He particularly advised that the privatisation of the DisCos should be reviewed and the national grid disbanded.
“The incoming administration should make electricity generation and distribution its number one priority. It should carry out more drastic reforms, review the privatisation process of the DisCos and disband the national grid.
“Let private estates, local governments and other interested entrepreneurs generate and distribute electricity without getting a licence from NERC. The guidelines and regulations of NERC are one of the major bottlenecks to power generation in Nigeria”, he stated.
On his part, Fadipe said Tinubu’s government must walk the talk on the subnational government taking advantage of the liberalised power sector.
The government must intentionally hit the ground running in the transmission, distribution and generation sectors.
“It is also vital that the Tinubu administration takes deliberate steps to work with subnational governments to exploit the liberalised power sector.
“It is very important because if the national government provides that technical support, the subnational governments may be able to take advantage of the provisions of the 1999 Constitution.
“The Tinubu administration also needs to look very closely at the principal regulator of the sector to exorcize from it what is called the 1st Born Syndrome. Frequently, 1st borns are usually timid with a yes sir mentality. 1st borns are more managers than leaders. They are often quiet with an intention not to rock the boat.
“We have seen this syndrome in the principal regulator of the market. The regulator needs to lead the market from the front. A sector that is ten years old should have become stronger and better by now with a steady climb into higher altitudes. Unfortunately, we are still dealing with take-off issues in the market.
“As tantalising as it seems, asking for scrutiny of projects executed in the last 8 years will be distracting. That notwithstanding, past managers must be held accountable for their deeds as soon as there are discoveries”, he stated.
Like other past administrations, Tinubu’s government has started with hope and expectations; certainly, Nigerians are optimistic that the rhetoric would translate into fundamental changes required to curb the menace in Nigeria’s power sector.