Power: Juxtaposing minister’s apology with investment ruin

Beyond the apology tendered by the Minister of Power, Saleh Mamman, global lenders say the electricity supply epilepsy in Nigeria has landed small, medium and large scale businesses in $58 billion loss in the last two years, ADEOLA YUSUF reports




Businesses in Nigeria lost $58 billion in two years due to the power supply epilepsy rocking the country. The World Bank, which said this in an estimate about the Africa’s biggest crude oil exporter, maintained that businessmen in the country were losing around $29 billion yearly due to unreliable power supply.


Like the World Bank, the International Monetary Fund (IMF) also carpeted the country’s power sector, insisting that there won’t be economic prosperity if there is no reform in the sector. Before this, the Minister of Power, Saleh Mamma, had tendered an apology to Nigerians over power outages resulting from 17 plants that are in comatose.


Customers are not kings


Six in 10 of registered customers are not metered, and their electricity bills are not transparent and clear, World Bank says in the damning report about Nigeria’s electricity sector. “Businesses in Nigeria lose about $29b billion annually because of unreliable electricity. Nigerian utilities get paid for only a half of electricity they receive,” the World Bank said in a presentation at a virtual meeting with journalists.

Loss by DisCos


Power distribution companies lose money on the electricity they receive as part of loss to poor distribution infrastructure and power theft, while another part is lost to customers not paying their bills, the World Bank said.


Stating that bills were also not transparent and clear, the global bank added in its Power Sector Recovery Programme fact sheet that “this contributes to resistance to pay electricity bills.” Despite being a major producer of oil and gas, Nigeria is the country with the largest energy access deficit in the world, the World Bank has estimated.


Majority still off-grid


A total of 85 million Nigerians do not have access to grid electricity, which means that 43 per cent of the population is without  access to the grid.


According to the 2020 World Bank Doing Business report, Nigeria ranks 171 out of 190 countries in getting electricity and electricity access is seen as one of the major constraints for the private sector, the bank said in February this year. Back then, the World Bank approved $500 million to support the government of Nigeria in improving the country’s electricity distribution sector.


The project funded by the bank is expected to boost electricity access by improving the performance of the electricity distribution companies through a large-scale metering program desired by Nigerians for a long time.


Like World Bank like IMF


IMF carpeted Nigeria’s power sector, saying outages were impediments to growth. The cost of doing business in Nigeria, the agency said, was very high on account of famous recourse to highly inefficient and harmful generator use up and down the country, adding that Nigeria would have to implement key reforms in its power sector if the country is to record strong economic growth this year


. Director, IMF’s African Department, Mr. Abebe Aemro Selassie, stated this at a press briefing on the release of the fund’s latest Regional Economic Outlook for sub-Saharan Africa.


Responding to a question on whether the IMF’s 2.5 per cent  growth forecast for Nigeria this year was not too ambitious given the country’s current challenges, Selassie said: “In the case of Nigeria, ensuring that the country enjoys — unleashes its tremendous potential requires reforms in three areas in our view.


“I think first and foremost, is that more fiscal space needs to be created through domestic revenue mobilization to pay for investments in health, in education, in infrastructure, which Nigeria swiftly needs, so that’s really. “Second, I think reforms in the energy sector are going to be paramount.


The cost of doing business is very high on account of the inefficiencies in the energy sector, power supply interruptions, and the famous recourse of the use of highly inefficient and harmful generator use up and down the country. Again, getting power supply, getting policies to make sure that Nigeria resolves this problem once and for all, I think, is also paramount.


“And thirdly, macroeconomic policy calibration, things like creating deep and liquid foreign exchange markets will be important.”


Minister’s apology


As Nigeria suffers frequent nationwide power outages due to 17 power plants in disarray, the minister appointed to fix the problem tendered an apology. Nigeria, Africa’s biggest  economy, was, again, thrown into another nationwide power outage buoyed by 16 thermal and hydroelectric plants that are now hit by serious problems.


While eight of the plants have broken down, one hydro is shut, seven integrated plants suffered gas constraint and one other hydro has water management problems.


Mamman, who confirmed this in a statement on Thursday, maintained that he was “not unaware of the current power outages/shortages bedeviling many parts of the country.” The problem, Mamman said in a statement, by Aaron Artimas, his media aide, “is caused by the breakdown of some National Integrated Power Plants supplying electricity to the national grid.


The plants in comatose


The plants are Sapele, Afam,Olonrunsogo, Omotosho, Ibom, Egbin, Alaoji and Ihovbor. The Jebba Power Plant was shut down for annual maintenance. Seven other integrated power plants, namely Geregu, Sepele, Omotosho, Gbarain, Omuku, Paras and Alaoji, are experiencing gas constraints while the Shiroro plant has water management problems. This unfortunate development has drastically affected power generation, thus effectively minimising the national grid.


The apology


In view of this, Mamman regretted the unfortunate situation and offered his sincere apology to affected Nigerians on the inconveniences the power shortages are causing. He assured that the ministry, through the appropriate agencies, was working assiduously to rectify the technical problems affecting the plants as well as resolving the gas issues to the others.


He further assured that the national grid would be restored to its previous historic distribution peak of about 5,600MW of electricity achieved early this year, so as to relieve Nigerians from the current harsh climatic conditions and restore full economic activities.


Last line


Beyond tendering an apology, concrete efforts should be made to fix the problems of power, which is not only killing the businesses but also the businessmen. The minister of power and his technicians should make use of useful advice rendered to them by the World Bank and the IMF.


Like the popular Chinese axiom, the best time to plant a tree was 10 years ago, the second best time is now, the best time to fix the power problem was 10 years ago, and the second best time now.




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