In a powerful address on Monday 30th October 2023, President Bola Tinubu raised a resounding alarm over the state of Nigeria’s power sector privatization, marking its 10-year anniversary as a stark reminder of unmet expectations.
Speaking at the Nigeria Electricity Supply Industry market participants and stakeholder roundtable, the President called for a revitalization of the nation’s electricity landscape.
Tinubu’s words struck a chord as he emphasized that the power sector, despite privatization, was serving just 15 percent of the country’s insatiable electricity demand.
A stark contrast to the ambitious goals set a decade ago, which aimed for 40,000MW by 2020 but have fallen far short with a national grid capacity hovering around 4,000MW.
His concern was noticeable as he highlighted that over 90 million Nigerians still lacked access to electricity, leaving households and industries reliant on costly self-generation, accounting for 40 percent of the nation’s power needs.
The President didn’t mince words, acknowledging the sector’s well-documented woes – commercial, governance, and operational challenges that have plagued progress.
And he exposed the painful truth that for every kilowatt-hour of electricity sent to the grid, only 60 percent is paid for, with tariffs far from reflecting the actual costs, especially in light of the naira’s devaluation.
Nigeria’s power sector finds itself caught in a vicious cycle of underinvestment and underperformance, leaving room for endless blame games among industry players. Tinubu’s message was clear: “How do we move forward from here?”
In the short term, he wants stakeholders to address commercial issues and enhance the sector’s total for investors.
He emphasized the need for a comprehensive plan to rebase tariffs, ensuring cost recovery across the value chain while addressing shortfalls and historic sector debts.
On the governance front, the President stressed the importance of creating an environment that doesn’t tolerate poor performers dragging the sector down.
He called for a vital reorganization and recapitalization process for distribution companies, acknowledging that they are significantly under-capitalized.
Tinubu’s address resonates as a call to action, a plea for a brighter future for Nigeria’s power sector.
The road ahead may be challenging the promise of delivering essential electricity to millions of Nigerians and propelling the nation towards a brighter, more electrified future.
