With over N1.3 trillion borrowed by the Federal Government to finance the operations of generation companies and gas suppliers in order to boost electricity supply in the country, Nigeria has only been able to transmit an average of 4,000 megawatts for a population of 200 million.
Nigeria has Africa’s largest population and economy, but Nigerians consume 144 kwh per capita annually, only 3.5 percent as much as South Africans.
With only 12 GW installed, and typically just one-third of that delivered, Nigerian power production falls far short of demand, which is a primary constraint on economic growth.
In April, Nigeria suffered an extensive power outage with eight plants out of the 18 plants in the country suffering a breakdown, while one underwent an annual maintenance.
Seven other integrated power plants were experiencing gas constraints while one hydroelectric power plant had a water management issue, he said.
Malfunctions are common in the sector and often result in extensive blackouts across the country. The government cites gas supply issues despite Nigeria being one the world’s largest producers of gas.
According to the Minister of Power, Engr. Sale Mamman, Nigeria’s installed grid power generation capacity had grown from 8,000 MW to 13,000 MW between 2015 and 2020 while the distribution system had the capacity to evacuate 5,500 MW of power having grown from 4,500 MW in 2015.
However, the majority of homes in the country are still under palpable darkness despite the huge investment in the sector.
The N1.3trn spent in the last three years was borrowed to boost generated electricity, and according to the World Bank, if the country continues with its low tariffs, and current performance levels, the power sector will cost the Federal Government an additional N3.08 trillion within the next three years.
The Bretton Woods institution said disbursement of funds to the private power companies have been more than the capital intervention for the health sector in Nigeria.
“To ensure that Gencos and gas suppliers receive enough payments to continue generating electricity, since 2017 the FGN has borrowed a total of N1.3tn ($4.2bn).
“In 2019 total FGN support reached N524bn ($1.7bn), 0.4 per cent of GDP – higher than the N428bn budget for health and just 20 per cent less than the N650bn budgeted for education.”
The World Bank made this known in its report: ‘Resilience through Reforms’, released on Tuesday. It added that, “Every Nigerian who receives electricity from a Disco pays less for electricity than the cost of supplying it.
