Financial Energy Review
…..by Victor Egbo….
The Nigeria Senate has expressed dissatisfaction over the huge financial losses occasioned by incessant grid collapses in the electric power sector. The Senate also noted the deep frustration over the continued failures of the power distribution companies (DisCos) and the Transmission Company of Nigeria (TCN).
The lawmakers revealed that they were seriously considering legislative measures to reverse the privatization of the power industry due to ongoing inefficiencies and the inability of private operators to meet the power needs of Nigerians.
The discussion was sparked by the submission of a report from the Senate Committee on Power, chaired by Senator Eyinnaya Abaribe. The committee’s findings laid bare the immense financial losses incurred each time the national power grid collapses, a recurring event that has plagued the country for years.
Presenting the report, Senator Abaribe highlighted that restarting a power plant after a grid collapse costs approximately $7.5 million. With three plants currently in operation, he noted that each grid failure amounts to a staggering $25 million in losses. The Senator’s presentation also underscored the devastating impact of these collapses on both the economy and daily life, as power outages disrupt businesses, healthcare services, and educational institutions.
“I observed that the DisCos have largely failed to deliver reliable electricity to Nigerian consumers. These frequent grid failures and power cuts have become intolerable. It is imperative that we reassess the privatization policy,” Abaribe said, his voice laced with frustration.
As the debate unfolded, several lawmakers weighed in, voicing concerns about the efficiency of the privatized electricity sector. Senate President, Godswill Akpabio, joined the criticism of the power privatization that began in 2013 under former President Goodluck Jonathan. Akpabio questioned the effectiveness of the reforms, which were intended to improve electricity generation, transmission, and distribution through privatization. However, he pointed out that the DisCos have yet to fulfill their obligations to consumers.
“Why do governors and individuals have to buy transformers and then hand them over to the DisCos, only to still pay for installation?” Akpabio quipped, highlighting the absurdity of citizens taking on the financial burden of a service that should be provided by the power companies.
The Senate President’s remarks resonated with many other lawmakers who were equally disillusioned with the power sector’s privatization. Senator Adams Oshiomhole, a former president of the Nigeria Labour Congress (NLC) and former governor of Edo State, expressed regret over his past support for the privatization of the power sector. Oshiomhole called the privatization process “ill-conceived and ill-executed,” lamenting that consumers are being forced to pay for services that are either subpar or non-existent.
“Consumers are suffering. They are paying for services they are not getting, and this situation is completely unacceptable,” Oshiomhole said. His sentiments were echoed by several other Senators, who argued that privatization has failed to deliver on its promises and has instead exacerbated the challenges facing the Nigerian power sector.
As the Senate session progressed, some Senators proposed declaring a state of emergency in the power sector, citing the persistent inefficiencies and the urgent need for systemic changes. Others suggested that the federal government may need to revisit the entire privatization framework to ensure that Nigerians receive the electricity they have long been promised.
In response to the mounting concerns, the Senate decided to withdraw the motion for consideration of the Committee’s report to allow for a more thorough investigation into the sector’s failures. The decision came after a heated exchange, as lawmakers agreed that there was a need for more actionable and comprehensive recommendations to address the challenges facing the power industry.
Senate Spokesperson, Senator Ajibola Basiru, announced that the Red Chamber had tasked the Committee on Power with expanding the scope of their inquiry to include an investigation into the taxpayer funds that have been injected into the power sector over the past 10 to 20 years. The goal is to determine how these funds have been utilized and whether they have been effectively applied to improving the sector.
“There is a need to examine why DisCos are underperforming and failing to meet their obligations to energy consumers. We must also seek answers to the frequent grid collapses that continue to plague the nation,” Basiru explained. He also called for a review of the laws that established the privatization process, hinting that legislative changes might be on the horizon.
The Senate has given the Committee on Power six weeks to come up with more robust recommendations to address the failures of the TCN and the electricity DisCos. The committee has been tasked with producing a report that includes not only the reasons for the sector’s underperformance but also strategies to reverse the growing crisis in Nigeria’s electricity supply.
The ongoing deliberations have raised doubts about the future of the privatized power sector, which was initiated by the Goodluck Jonathan administration in 2013 as part of efforts to improve the country’s electricity generation and distribution infrastructure. The privatization aimed to boost efficiency and attract private sector investments. However, nearly a decade later, the sector continues to face challenges such as frequent grid collapses, unreliable service, and escalating costs for consumers.
For many Nigerians, the power sector remains a symbol of unfulfilled promises, and with the Senate’s growing discontent, it appears that the privatization experiment may be on the verge of being reconsidered. The outcome of the ongoing investigation and deliberations will likely determine the future direction of Nigeria’s electricity sector and its ability to meet the energy needs of its citizens.
