AMID the severe energy crisis facing the nation, stakeholders are focusing their attention on the new Minister of Power, Adebayo Adelabu, and his pledge to overhaul the power industry through a seven-year program the government claims to be in the works. The uneven generating, transmission, and distribution infrastructures, which previous governments failed to improve, need urgent surgical intervention in the power sector. President Bola Tinubu and Adelabu should take the necessary, audacious, and innovative steps, learn from the previous mistakes, and set the economy on a new trajectory.
Nigeria continues to struggle with low electricity rates, unequal distribution, shortages, poor infrastructure, lack of investment, corruption, political and governance issues despite the billions of dollars invested in the industry by succeeding administrations. Adelabu needs to gather the resources needed to swiftly save the sector with Tinubu’s support.
The lack of appropriate electricity generation and supply has severely restricted Nigeria’s economic potential. Official data from the Nigeria Electricity System Operator showed that in March, the total power transported across the country’s single national system was close to 5,000 megawatts. 5,801.6MW was the highest generation ever produced in the nation. This is dismal for the biggest economy in Africa and the world’s 31st largest.
Some experts believe that the supply of electricity must reach 78,000 MW by 2030 in order for the economy to grow at a 10% annual rate. This necessitates a large investment throughout the power value chain.
It should be investigated whether domestic and international public-private partnerships, grants, and loans could be used to raise money for energy initiatives. For the purpose of funding sustainable energy programs, the government can create novel financing techniques, such as green bonds. To obtain technical know-how and finance, there should be effective coordination with donors and multilateral development organizations.
Experts estimate the amount of investment needed to be between $10 billion and $20 billion each year for ten years, making luring foreign direct investment essential. A short-term emergency program should be implemented to drastically improve transmission and distribution in order to double the effective supply.
The 2013 privatization should be reviewed to address any issues preventing the effective implementation of the agreements in order to produce notable results. To resolve the gas-related issues impeding the full utilization of the 21 gas-fired facilities, pragmatic measures should also be taken.
The 11 distribution businesses and 6 generating companies’ buyers lacked the technical know-how and financial means to make the investments necessary for infrastructure replacement and deployment, which would have provided the projected value. The government should take all reasonable steps to entice qualified foreign investors and FDI to the industry. It should put plans in place to give up its minority holdings in the privatized enterprises and prod the current majority investors to follow suit so that strong international power sector firms may take their place.
The Electricity Act of 2023, which gives states, businesses, and people the authority to produce, transmit, and distribute electricity, is something Tinubu should actively exploit. In order to boost local economies by supplying SMEs and rural areas with electricity, the state governments should also construct mini- and micro-grids.
Remote and underprivileged locations can be effectively electrified using off-grid and mini-grid systems. It is crucial to invest in renewable energy sources including geothermal, hydro, wind, and solar power in order to diversify the energy mix.
The cost of using diesel-powered generators for self-generation by businesses is significant. Lack of power can occasionally be fatal to small businesses.
Transparent and responsible governance is crucial to luring both domestic and foreign investment. It is time to get rid of the corrupt practices, favoritism, and lack of merit in hiring that characterized previous administrations’ regulatory and enabling agencies.
Lessons learned from other nations like Egypt, the United Arab Emirates, and Qatar show that you can significantly increase electricity capacity in a short amount of time if you have the determination, commitment, and tenacity.
For Adelabu and the Tinubu administration, getting out of the power morass is a crucial test that they shouldn’t fail.
