Every Nigerian understands that the energy sector in our country has many weaknesses. There is a constant instability, electricity is often cut off, and as a result, the standard of living is deteriorating and conclusions are emerging about the government’s low efficiency. What are the reasons for this situation? Let’s try to figure this out together by considering the basic challenges of power generation and distribution in Nigeria.
It can’t be said that the state of the energy sector is getting worse. Privatization of the sphere of power generation in Nigeria has brought some positive results. At the same time, the state subsidies were maintained for some users.
Nevertheless, tariffs continue to increase. This can be explained mostly by the fall in prices of the oil market. The administration has to convince frustrated citizens that they have to pay more if they want stable and constant electricity.
The problem of shortage of electricity generation in Nigeria is painful, as different governments have tried to solve it for decades. For a long time, a monopoly was maintained.
After returning to civilian rule in 1999, the government had to spend 2 million dollars annually to improve weak power sector in Nigeria and improve service. In 2010, the electric power industry was transferred to the private regime on the initiative of the President Goodluck Jonathan. Then the holding company PHCN was privatized. In 2013, 6 plants and 11 electricity distribution companies in Nigeria were sold. The population expected things to get better.
Some improvements have been noticed, but this is still far from what should have been obtained. This progress can be compared to a drop of water in a huge sea. Although the production of electricity reached the level of 6.4 thousand mW, this is still a very weak result. The supply is much less than demand. Let’s look at Slovakia, for instance. This country produces more electricity even though its population is only 3% of that of Nigerian.
The owners are new, but the problems are still the same
In spite of the fact that the electric power enterprises are relieved of the bureaucratic pressure, which previously hampered their activity, there is still a lot of structural problems. They impede the orderly provision of Nigerians with utilities and hinder the growth of the energy sector.
A serious problem is the shortage of the gas used by thermal power plants.
The number of unpaid bills continues to grow.
The transmission network has long been obsolete and poorly maintained. Even if more electricity was produced now, there would be no way to process it. This explains the efforts of many energy operators to stimulate progress. To expand and modernize the means of energy distribution, considerable investments are needed.
Measures for the development of the energy sector
To improve the situation of the companies, the Central Bank worked on their stabilization in 2015. A $1.1 billion strategy was launched. Operators were able to use preferential loans. In addition, tariffs were raised in accordance with the long-term plan approved in 2012. The cost of electricity had to be gradually increased in order to encourage private investment. Reports say there has been an increase of 45%.
The organizations struggling to overcome poverty in Nigeria and trade unions condemned this decision and argued that it was unreasonable since the services did not improve significantly. Therefore, they don’t know what the money gotten from the people was spent on. If progress has occurred, the overwhelming majority of the population has not felt it. The only real effect is the deterioration of the quality of life against the background of low income.
Large-scale protests aimed at abolishing the increase of tariffs were organized in major cities of Nigeria. The Senate also argued for this, calling such actions extortion and exploitation of citizens.
Criticism reflected the needs and opinions of consumers. Households and enterprises had to face difficulties that they were not prepared to accept. Failures in the supply of electricity disrupt their work, reduce production and worsen situations.
The statement that the price increase should follow the improvement of services sounds logical enough and has a moral basis. However, such an approach is incompatible with the complex conditions of a market