Six years into the life of the present administration and eight years after the unbundling of the state-owned electricity company, Power Holding Company of Nigeria (PHCN), Nigerians are still far from enjoying regular and uninterrupted electricity supply.
Sadly, no meaningful achievements have been recorded in the eight years that the power sector has been under private ownership (since November 2013). Several policy measures by the government have failed to yield the desired results as the corrupt system has succeeded in generating more cash for the players than electricity for consumers.
But for the Central Bank of Nigeria (CBN) N300 billion Power and Aviation Intervention Fund (PAIF), the beleaguered electricity sector would have totally collapsed.
The DisCos have failed to inject the required funds to boost their working capital and lift the needed infrastructure for the nation’s power distribution network. The DisCos are also accused of diverting their bill revenues to personal vaults instead of settling their debts and improving their working capital. They are said to be holding on to decaying assets, which sink their performance while they feed fat on their helpless consumers through the notorious estimated billing system.
As a way out, the government intervened by launching the Meter Asset Provider (MAP) scheme in 2013, which allowed the manufacturers/vendors to procure and install pre-paid meters for consumers. The Federal Government through the CBN has provided intervention funding for the sector up to the tune of N1.6 trillion with the involvement in MAP.
The government later launched the National Mass Metering Project (NMMP), under Mr Raji Fashola as then minister of Power, Works and Housing. The NMMP is a five-year project meant to fast-track the provision of metres to over six million households within the period. The slow pace of MAP led to allowing both schemes to run concurrently with the joint purpose of closing the huge metering gap in the country’s electricity sector. Sadly, little has been achieved on this.
The Senate at its committee level on March 26, 2021 blasted the Electricity Regulatory Commission (NERC) and the DISCOs for poor performance of the mass metering project with a whopping N33.4 billion sunk into it by the CBN. Despite this huge intervention, the meters have remained an elusive commodity. Many consumers, who paid for them, are yet to be supplied. Officials of the DisCos and meter supply companies have been reported to be involved in fleecing unsuspecting consumers eager to obtain the pre-paid meter and escape the scourge of estimated billing.
In this milieu, the Nigerian Electricity Regulatory Commission (NERC) recently announced an increase in price of meters effective November 15, 2021. The new price regime raised the price of a single-phase meter from N44,896.17 to a revised rate of N58,661.69, while the price of a three-phase meter was increased from N82,855.19 to a revised rate of N109,684.36
It is unfortunate that Nigerians have to bear the brunt of such an inefficient, corrupt and exploitative system. It has been reported that Nigerian businesses and households spent $12 billion and $14 in 2019 and 2020, respectively, to fuel their generators to remain in business. This has huge implications on their business in particular and the economy in general. The high rate of inflation and the continued double digit monetary policy rate of the CBN – a benchmark for the interest rates that banks charge on loans to their customers, are principally based on this anomaly.
Electricity is the bedrock of modern industrialisation. Its production and consumption have a direct relationship with wealth creation in every economy. No economy has made progress without adequate and uninterrupted supply of electricity. That pre-paid meters have remained elusive eight years after the mass metering project was launched points to huge leadership failure. it must not be allowed to continue. The power sector needs an urgent reform – one that will add value to the economy and uplift the standard of living of the people. Government should fast-track the move to amend the Electricity Sector Power Reform Act, the law upon which the 2013 privatisation was based. This will put a check on the ugly activities of the GenCos and DisCos.
With the planned full withdrawal of electricity and petrol subsidies in 2022, Nigerians are in for a long walk in the economic valley of death. Labour unions should work with the government to achieve a useful purpose on this matter. The APC-led government under President Muhammadu Buhari should consider an overhauled power sector as a suitable parting gift to Nigerians who have suffered enough in these six years of unbearable darkness. Let the pre-paid meters be made available.
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