By Omono Okonkwo, Head of Operations at The Electricity Hub
On the last day of the Nigeria International Energy Summit (NIES) held in Abuja on March 1, 2024, the Team Lead for Power at the Office of the Special Adviser to the President on Energy, Eriye Onagoruwa, highlighted a concerning issue.
She was representing Olu Verheijen, the Special Adviser to the President on Energy, and she stated that more than 100 million Nigerians lack reliable access to electricity.
During her presentation, Onagoruwa displayed a slide comparing energy consumption per capita in various countries. In the United States, it stands at 78,754 kilowatt-hours (kWh) annually and 6,563 kWh per month.
The OECD (Organization for Economic Co-operation and Development) averages 35,211 kWh annually and 2,934 kWh per month. In Egypt, the figures are 9,639 kWh annually and 803 kWh per month.
Morocco records 7,237 kWh annually and 603 kWh per month. South Africa reports an annual, monthly consumption of 23,392 kWh and 1,949 kWh. In stark contrast, Nigeria’s statistics paint a grim picture, with only 2,548 kWh annually and 212 kWh per month.
This data shows Nigeria’s severe limitations of electricity access, hampering economic growth and stifling productivity. Addressing this critical issue is imperative for the nation’s development and the well-being of its citizens.
At some point, Onagoruwa stated, “The parallel between those living in poverty and those without access to electricity is not accidental. The link between electricity consumption and economic development is clearly well established across different countries with different income strata.”
According to her, businesses operating in Nigeria continue to struggle with high operational costs and lower productivity, making them less competitive both locally and globally. This contributes to limited job creation in the country.
What the administration is doing to tackle electricity challenges
Moving on from the challenges, Onagoruwa said that the Bola Ahmed Tinubu administration is currently tackling Nigeria’s electricity access problems through the following;
Solving foundational problems – She emphasized that resolving these issues will improve Nigerians’ access to energy. Furthermore, she elaborated that a collaborative effort is underway involving multiple government agencies, including the Ministry of Finance, the Ministry of Budget and Planning, the Ministry of Power, and the Office of the Special Adviser to the President on Energy.
This concerted team is actively engaged in implementing reforms and initiatives aimed at expanding access to electricity and optimizing its productive utilization. A significant aspect of their strategy involves addressing outstanding debts within the electricity value chain across various sectors.
The objective is to ensure a consistent and reliable power supply. The generating companies (GenCos) are expected to enhance their financial stability by settling these financial obligations. This, in turn, is anticipated to result in increased electricity production throughout the entire country.
The Presidential Metering Initiative (PMI) – Thisis centred on augmenting the widespread implementation of smart meters throughout the country. It entails the development of a metering communications system designed locally, as well as the establishment of a meter data management system specifically crafted to address significant social challenges associated with metering.
This project’s overarching goal is to enhance distribution companies’ commercial operations and financial sustainability (DisCos). This is to be achieved by fostering cost efficiency, improving collection processes, and minimizing losses.
A key emphasis of the PMI is the reduction of Aggregate Technical, Commercial, and Collection (ATC&C) losses, currently standing at approximately 47%. The objective is to bring these losses in line with globally accepted standards, ranging between 12% and 15%.
By focusing on these strategic measures, the PMI aims to significantly enhance the overall efficiency and effectiveness of the energy distribution system in the country. This, in turn, will contribute to the financial viability of distribution companies and create a more robust and reliable energy infrastructure for the benefit of the Nigerian populace.
To sum up, she underscored the importance of broadening Nigeria’s focus beyond merely providing electricity to homes. She emphasized the need to extend efforts towards energizing productive activities, such as empowering businesses, fueling industrial operations, and catalyzing innovation.
These facets are recognized as the backbone of economic growth and job creation in any thriving economy.