AMID the country’s dire energy crisis, stakeholders are fixing attention on the new Minister of Power, Adebayo Adelabu, and on his promise to transform the power sector via a seven-year programme the government says it is minting. The power industry requires urgent surgical action to revive the patchy generation, transmission and distribution systems which previous administrations failed to fix. President Bola Tinubu and Adelabu should take the necessary, bold and creative measures, avoid past mistakes, and chart a new course for the economy.
Despite the billions of dollars sunk into the sector by successive administrations, Nigeria still grapples with low electrification rates, uneven distribution, shortages, inadequate infrastructure, lack of investment, corruption, political and governance challenges. Adelabu, with Tinubu’s backing, must muster the capacity required to quickly rescue the sector.
Nigeria’s economic potential has been largely chained down by inadequate power generation and supply. Total power transmitted through the sole national grid neared 5,000 megawatts in March, official data from the Nigeria Electricity System Operator showed. The all-time peak generation ever attained in the country was 5,801.6MW. For Africa’s largest economy and world’s 31st largest, this is abysmal.
For the economy to grow at 10 per cent yearly, some experts reckon that electricity power supply must reach 78,000MW by 2030. Achieving this requires significant investment across the power value chain.
Mobilising domestic and international financing for energy projects through public-private partnerships, grants, and loans should be explored. The government can develop innovative financing mechanisms, such as green bonds, to fund sustainable energy initiatives. There should be effective collaboration with multilateral development agencies, and donors to access technical expertise, and funding.
The quantum of investment required–$10 billion-$20 billion each year for a decade according to experts – makes attracting foreign direct investment indispensable. In the short-term, there should be an emergency programme to double effective supply by radical upgrades in transmission and distribution.
The 2013 privatisation should be revisited to resolve all the impediments to the efficient implementation of the agreements to deliver dramatic outcomes. Pragmatic initiatives should also be adopted to end the gas-related challenges stalling the full utilisation of the 21 gas-fired plants.
Those who acquired the 11 distribution and six generating companies lacked the technical know-how and the financial ability to deliver expected value by way of investment and infrastructure replacement and rollout. The government should do everything possible to attract capable foreign investors and FDI to the sector. It should make arrangements to relinquish its minority stakes in the privatised companies, and nudge the current majority stockholders to do the same and make way for formidable global power sector firms.
Tinubu should rally state governors to enthusiastically take advantage of the Electricity Act 2023 which authorises states, companies and individuals to generate, transmit and distribute electricity. The state governments should also build mini-grids and micro-grids to stimulate their economies by powering SMEs and rural communities.
Off-grid and mini-grid solutions can suitably electrify remote and underserved areas. Investment in renewable energy sources such as solar, wind, hydro, and geothermal power to diversify the energy mix is also imperative.
Businesses’ reliance on self-generation via diesel-powered generators adds greatly to costs. For small businesses, lack of power sometimes kills off enterprises.
To attract domestic and foreign investment, transparent and accountable governance is essential. Corruption, cronyism, lack of merit in appointments of personnel to regulatory and facilitating agencies that characterised past administrations should be jettisoned.
Lessons from other countries such as Egypt, United Arab Emirates, and Qatar prove that with the will, commitment and doggedness, you can radically upgrade power capacity within a short time.
Solving the power quagmire is a major test for Adelabu and the Tinubu administration; they should not fail.
