HeadlineNigeria Ranks 21 In Electricity Regulatory Index

Nigeria Ranks 21 In Electricity Regulatory Index

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December 08, (THEWILL) – Nigeria’s electricity sector emerged as the 21st best regulated across a number of key metrics, according to the African Development Bank’s (AfDB) 2021 Electricity Regulatory Index.

The 2021 Electricity Regulatory Index, an annual report, covered 43 countries, up from 36 in the previous edition, and assessed their impact on the performance of their electricity sectors.

The index covered three countries in the North Africa region; 14 in West Africa; 6 in Central Africa; 7 in East Africa; and 13 in the Southern Africa region.

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According to the report, Nigeria has an index between 0.600 to 0.799 which indicates a substantial level of regulatory development. This means that many elements of a supportive regulatory framework are established, although there are weaknesses that do not permit the regulator to have a strong capacity, legal and institutional structures.

Meanwhile, the Ugandan electricity sector is the best for the fourth consecutive year while other strong performers include East African neighbours, Kenya and Tanzania, as well as Namibia and Egypt.

Among the 2021 report’s key highlights are that regulatory independence is one sub-indicator where African countries have room to improve: in 93 percent of sampled countries, governments, and stakeholders exercise influence over regulatory authorities.

In terms of regulatory substance, participating countries scored lowest on the adequacy of their tariff setting and frameworks, as well as licencing frameworks when compared with best practises.

According to the report, the average performance of economic regulation has continued to decline since 2018. A third of countries surveyed indicated they lack methodologies to determine tariffs; another 40 percent rely on tariff methodologies that do not include key attributes such as automatic tariff adjustment and tariff indexation mechanisms and schedule for major tariff reviews.

A press statement published on AfDB’s website on Wednesday, said African countries need to improve on regulatory independence.

The statement read in part, “Among the 2021 report’s key highlights are that regulatory independence is one sub-indicator where African countries have room to improve: in 93 percent of sampled countries, governments, and stakeholders exercise influence over regulatory authorities.

“In terms of regulatory substance, participating countries scored lowest on adequacy of their tariff setting and frameworks, as well as licencing frameworks when compared with best practice.”

Speaking on this, the AfDB’s Vice President for Power, Energy, Climate and Green Growth, Kevin Kariuki, said, “The unprecedented participation of so many countries shows the commitment to strengthen the countries’ regulatory environment with a view to improving the performance of the respective electricity sectors”.

On his part, AfDB Director for Energy Financial Solutions, Policy and Regulation, Wale Shonibare, commended the top-performing country.

“Uganda topping the rankings consecutively for four years comes as no surprise to many, as the regulator spends significant time on consultation and analysis, including regulatory impact assessments of key interventions and follow-through to ensure full implementation”, he said.

Since its launch in 2018, the Electricity Regulatory Index has highlighted aspects of electricity regulation that need reform, identified appropriate areas for intervention, and encouraged stakeholders to be proactive in addressing challenges. Since then, the index has been widely adopted by regulators and other stakeholders across the continent as a benchmark for the regulatory environment as well as for ongoing reforms.

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