President Bola Ahmed Tinubu, speaking at the Nigerian Electricity Supply Industry (NESI) Roundtable in Abuja on Monday, October 30, expressed concerns over the state of Nigeria’s power sector. He noted that the national grid currently serves only 15% of the country’s power demand, leaving over 90 million Nigerians without access to electricity.
Represented by Sodiq Wanka, the Special Adviser for Energy and Infrastructure from the Office of the Vice President, President Tinubu discussed the underwhelming outcomes of the power sector privatization that took place over a decade ago. He pointed out that the sector has fallen short of its objectives and expectations.
He stated, “10 years on, I believe it is fair to say that the objectives of sector privatization have, by and large, not been met. Over 90 million Nigerians lack access to electricity. The national grid only serves about 15% of the country’s demand. This has left households and factories relying on expensive self-generation, which supplies 40% of the country’s demand.”
President Tinubu also highlighted the stagnant progress in grid capacity over the past decade, noting that it has only increased from just over 3,000 megawatts (MW) to roughly 4,000 MW today. This is significantly below the 40,000MW target set by the Federal Government pre-privatization.
The President emphasized the urgent need for recapitalization of distribution companies and acknowledged that electricity tariffs are not cost-reflective. He assured that ongoing efforts aim to reconcile outstanding debts, activate investments, and address financial capacity challenges.
He explained, “As of Q2 2023, for every kWh (kilowatt-hour) of electricity sent to the grid, only 60% is paid for. But as we know, even the tariff paid for that unit of electricity is far from being cost-reflective, especially in light of the recent devaluation of the naira.”
President Tinubu recognized the sector’s chronic underinvestment, particularly in transmission and distribution, and attributed the failure to meet performance improvement targets to technical and financial capacity issues. He stressed that the power sector is currently stuck in a cycle of under-performance and under-investment, and the focus should now be on finding solutions to these challenges.
President Tinubu called for a clear path to extinguishing historic sector debts, emphasizing that a reconciliation exercise is already underway.
