Allocates N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan) from 2021 budget
Spends N9bn on purchase, maintenance and fuelling of Generators from 2020 budget
Gas/solar diversification needed to escape power shortages
Nigeria’s Electricity Transmission Company (TCN) has revealed that the nation’s power industry has attained another all-time national peak of 5,459.50 Mega Watts (MW), but 70% of its 214 million households languish in unending power outage due to collapsed electricity transmission infrastructure.
Naija247news findings show that Households spend $12 billion on self-generated power and most households and businesses get an average of 6.5 hours of off and on electricity supply per day.
In order to improve the power sector, Nigeria privatised the power sector, leading to the creation of 11 distribution companies (Discos), but year in year out, both the government and the Discos have continued to blame each other for the poor power supply.
The increase shows businesses struggle to remain in business, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said in a report by The Nation.
Currently, Nigeria’s peak power supply is a quarter of the total 20,000MW demand in the country. With electricity generation per head 25% below sub-Saharan African averages, the country spends $12bn annually on diesel to power generators.
This cost comes with additional health and environmental hazards, highlighting the importance of developing a sustainable, reliable energy mix.
Economic productivity is severely impacted because of inconsistent power supply. Its resulting cost to the economy is estimated at $29bn annually.
In the context of an anticipated COVID-19-induced recession forecast to be the worst in four decades, there is an urgent need to act.
According to statement seen by Naija247news, national peak was efficiently transmitted through the nation’s transmission grid at a frequency of 50.26Hz by 8.15pm on the Oct. 28.
“The new peak surpasses the 5,420.30MW achieved on Aug. 18. by 39.20MW.
Naija247news findings shows that Nigeria allocated a whooping sum of N9bn on purchase, maintenance and fuelling of Generators across all Government Agencies , Parastatals nationwide in 2020 budget and another N75.4m to cover Generator expenses for some of its foreign missions outside the country.
For 2021 fiscal year, the Buhari administration has proposed to spend Power – N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan) from the budget proposal of N13.08 trillion for the 2021 fiscal year,
The shortage of power is one of the biggest issues Buhari faces as he tries to reform a $400 billion economy that is too dependent on oil exports, has too many inefficient state-owned enterprises and is still struggling to recover from a slump in 2016.
“Lack of access to electricity and unreliable electricity supply are key constraints to doing business in Nigeria,” the International Monetary Fund said in its latest economic report on the country.
It estimated the annual economic loss at about $29 billion. In a 2014 World Bank survey, 27% of Nigerian firms identified electricity as the main obstacle to doing business.
Households with access to on-grid electricity had an average power supply of only 6.5 hours a day in the first half of 2019, according to a survey by the country’s leading polling agency, NOI Polls.
Electricity production per capita is less than 15% of the average of emerging-market economies and less than 25% of the sub-Saharan Africa average, according to the IMF.
To keep out the darkness, households own and operate an estimated 22 million small gasoline generators, whose combined generating capacity is eight times higher than on-grid supply, according to a June 2019 presentation by Dalberg, a global policy and advisory firm.
Businesses and individuals spend about $12 billion a year, twice the country’s annual infrastructure budget, fueling these generators.
Nigeria, which also has the continent’s largest gas reserves and ranks ninth globally, consumed an average 3,713 megawatts of electricity from the grid in 2018, data published by the country’s central bank shows.
That’s about a 10th of what Eskom Holdings SOC Ltd. made available in South Africa, a country with less than a third of the population and which itself is subject to rolling blackouts.
Nigeria is only able to send about a quarter of its total power capacity to homes and businesses due to a poor and dilapidated power infrastructure, much of it installed in the 1980s.
The country’s transmission lines can “theoretically” carry about 7,500 megawatts, according to the country’s electricity regulatory authority.