Nigeria’s electricity sector dates back to the colonial era when the electricity supply was mainly from diesel generators owned by industrial establishments including factories and mines as well as other institutions such as hospitals and schools. Nigeria’s national electricity grid has collapsed many times in the past years resulting in blackouts throughout the country. The blackouts, which prevent people from meeting routine business and household needs, result in huge economic and social costs.
Studies from the World Bank indicates that, in sub-Saharan Africa, every 1% increase in power outages (in terms of hours) has been associated with a 2.86% decrease in gross domestic product (GDP). This translates to a loss of billions of dollars in Nigeria’s GDP.
Power outages has remained an annual problem in Nigeria, which has been ongoing for decades, hindering the country’s industrial growth, restricting the commercial venture’s expansion, profitability and wellbeing of its people. At best, average power supply daily is estimated at four hours, most of the time, days can go by without any power supply at all. And this difficulty has crippled the industrial, agricultural and mining sectors, hindering Nigeria’s ongoing economic development.
There are also health risks from the emissions of inefficient petrol generators, which are widely used in Nigeria. It is estimated that electricity generator sets consume $22 billion worth of fuel yearly. This has contributed to incessant shortage of fuel for vehicles at filling stations across the country.
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Since 2005, Nigeria’s power reforms focused on the privatizing generation and distribution of power and encouraging private investment in the power sector. Reports also have it that between 2010 and 2020, electrification proceeded slowly in Nigeria but that as population growth outpaced gains in assets, the number of people without electricity grew by three million in a year which attributed thus to fragility and underdevelopment.
The country’s grid requires upgrades to help meet the needs of electricity consumers. One of the major problems hindering the performance of electricity distribution in Nigeria is load rejection. Load rejection occurs when the distribution companies reject electricity transmitted by the transmission companies. The rejection is partly due to the poor state of the transmission and distribution network and faulty power lines.
Another problem facing power generation in Nigeria is non-payment by consumers. For example, consumers in communities hosting power generation plants perceive that they own the electricity generated in their locality and refuse to pay for the power consumed.
Other challenges plaguing the sector include high levels of distribution losses, lack of revenue due to the non-payment of bills and also poor tariff structure, which makes it difficult for power utilities to make significant investments to improve the sector due to financial constraints.
Opportunities, however, remain in the sector for the introduction of renewable energy sources into the generation mix, seeing that the country has potential for solar power generation and other renewable energy sources. The country should also introduce more competition into the sector to improve performance.
Fatima Dauda Salihu of the Mass Communication Department, of Bayero University, Kano
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