POWER SECTOR REFORMS IN NIGERIA
By Paul Oke
Power and energy is the backbone for the development of any nation and in particular, electricity is more critical to the development of economies of the world. This is so because every facet of socio-economic and industrial development is linked to the availability of power.
With a population of about 150 million people, Nigeria has a long history of electricity supply challenges. Sources of electricity in Nigeria vary from gas, oil, hydro, solar to coal-powered station with hydroelectric and gas systems taking the precedence.
Under the National Electric Power Authority (NEPA), the agency charged with the responsibility of generation, transmission and distribution of electricity, the country witnessed persistent power outages as a result of inefficiency and corruption in the system. It was against this backdrop that in the year 2000, the administration of the President Olusegun Obasanjo embarked on power sector reforms by unbundling NEPA, privatized its units and established a regulatory agency.
With the reforms, NEPA gave way to what is now known as Power Holding Company of Nigeria, (PHCN) with seven generation companies, one transmission company, eleven distribution companies and the entry of Independent power Producers.
The whole essence of the reforms was to eliminate corruption in the system, make the sector more efficient, effective and responsive to the yearnings of Nigerians.
Secondly, the reforms were geared towards reducing the scope of monopoly of control of the nation’s power industry and encourage private sector investment.
Statistics from the Nigerian Electricity Regulatory Commission indicate that over thirty independent power producers have so far been licensed.
Despite these reforms, there has been no significant improvement in the generation and distribution of electricity. Even the target set by the late President Umaru Musa Yar’Adua administration to generate, transmit and distribute six thousand megawatts by December 31, 2009 was not achieved. The current power generation capacity is about three thousand megawatts, a far cry from the nation’s minimum requirement of ten thousand megawatts. Although, the installed capacity of electricity is much greater than three thousand megawatts, infrastructure utilization has been very poor.
However, for the reform programme to bring about positive changes in the power sector; first government must ensure level playing field for the independent power producers and other genuine investors in the power business.
Secondly, the regulatory agency must be truly independent and must be effective, efficient, unbiased in its role while consumers pay their bills promptly to ensure that the electricity providers remain in business.
It is gratifying to note that government has been able to overcome the challenge of frequent disruptions in gas supply, which has been a hindrance to electricity supply.
The government has not only found solution to the restiveness in the Niger-Delta region where militants disrupt gas flow, it has also successfully negotiated with major oil companies for improved gas supply.
Stakeholders must support the ongoing reforms in the sector because in the long run, it will usher in a competitive energy market, transfer of knowledge and skills as well as ensure improved efficiency and reliability of service and create employment opportunities.
The fact that President Goodluck Jonathan assigned the Ministry of Power to himself is a demonstration of the present government’s commitment to tackling the challenges in the power sector. Expectations are high that the end of Nigeria’s energy crisis is in sight.
This news feature was broadcast on Voice of Nigeria, on Friday 28th May, 2010.
