TEN years after the partial privatisation of the electricity sub-sector, the report that 7.1 million consumers are still without prepaid meters is a contradiction. The latest statistics from the Nigerian Electricity Regulatory Commission says that more than half of the registered consumers are on estimated billing. This is unacceptable; a reminder that the privatised entities lack the capacity to deliver on the mandates they were given and an indication that the exercise was dubious.
There was a genuine hope of better days ahead in November 2013 when the distribution and generation companies came into existence. The DisCos, with 11 currently in operation, were mandated to provide prepaid meters, among other services. In this aspect, the DisCos have failed. A government report said South Africa had 180 municipal energy entities as of 2018.
Not only is Nigeria still suffering from chronic electricity shortages, but the DisCos have also not supplied most consumers with PPMs. In its 2023 third quarter report, NERC noted that of Nigeria’s 12.82 million registered customers, only 5.70 million or 44.51 per cent are metered. In Q3 2023, DisCos metered 148,389 consumers.
After 10 years of existence, this rate is too low, leading to extortion by DisCos staff, by-passing of meters, and low bill payment. Between July and September 2023, consumers lodged 333,947 complaints against the DisCos to NERC on metering, billing, and service disruption.
Clearly, progress on all sides is dreadful. The Federal Government’s free metering scheme, at a cost of $500 million since October 2020, is mired in delays, opacity, and corruption. Consumers protest that DisCos hoard the free meters.
Worse, NERC notes that government paid subsidies of N600 billion on behalf of consumers in 2023. Subsidy is projected at N1.6 trillion in 2024. In the three years to 2020 under President Muhammadu Buhari, the Federal Government supported the sector with N1.7 trillion. It is money not well spent.
Apart from the metering shortages, the sector is in a deep crisis. Estimated demand is 20,000 megawatts but supply hovers between 4,000MW and 4,500MW. Installed capacity is about 12,000MW.
The DisCos, who fail to provide basic equipment like transformers and cables, feel aggrieved about the “non-reflexive cost tariff.” Thus, consumers on estimated billing are subjected to arbitrarily high charges. The reliance of the GenCos and the publicly owned Transmission Company of Nigeria on the DisCos compounds the woes of the industry.
The impact is devastating. Vast swathes of the country are entombed in gross darkness. The sole national grid reportedly collapsed 12 times in 2023. This is fatal for industry, job creation, social life, and public revenue. The Manufacturers Association of Nigeria laments that alternative energy adds 40 per cent to the cost of Nigerian goods, rendering them uncompetitive against cheaper imports.
The World Bank notes that four in 10 Nigerians lack access to electricity. According to the Rural Electrification Agency, almost 90 million citizens were without electricity access in 2021. This deepens poverty in which Nigeria oscillates between first and second highest figures in the world with India.
Therefore, President Bola Tinubu and the Minister of Power, Adebayo Adelabu, must quickly reform the sector, starting with a strategic review of the 2013 privatisation exercise.
To attract the international investors with the cash and technical expertise, the Federal Government should surrender its stakes in the privatised entities to such investors. The DisCos too should relinquish some of their stakes. Government should privatise TransyCo and decentralise for the construction of more grids. This will bring in the needed FDI, increase supply and efficiency.
Tinubu and Adelabu should not entertain excuses from the DisCos anymore but compel them to immediately provide meters for consumers.
