Market News
Tariff will drop with more industries on national grid – Adeshina
By Faruk Shuaibu
A former President of the African Development Bank (AfDB), Dr Akinwumi Adeshina, has stated that the low level of industries on the national grid is making Nigerians pay more for electricity.
Speaking during the 20th anniversary of the Nigerian Electricity Regulatory Commission (NERC) yesterday in Abuja, Adeshina said in most climes where there is 24-hour electricity supply, commercial users make up 80 per cent of consumers while residential customers make up 20 percent.
Adeshina who was represented by the Group Managing Director of Sahara Group, Kola Adesina, added that the reverse is the case in Nigeria where power utilities’ companies rely on highbrow areas for their revenue.
“The higher the number of commercial and industrial consumers the better because most residential customers are not paying for power, they are stealing it. The more industries, the more power will be available and accessible, and the cheaper ultimately the tariff. However, how are we bringing in more industries to Nigeria? What guarantees are we putting in place to bring the biggest of the biggest in terms of energy consumption into Nigeria?”
He also linked this to the reason the national grid has not improved in comparison to the country’s population expansion.
He said the situation has made owners of generation plants not to invest as they can’t make profit from their investments.
He, however, said the planned payment of the N4trn debt payment owed to the power plant owners will stimulate interest for investments on expansion of the grid.
On his part, the Country Director World Bank, Mathew Verghis, said Nigeria is the country with the most significant electricity access deficit in absolute terms in the world.
He said the largely privatized private sector has struggled with inefficiencies, high losses, and limited investments since its privatization in 2013.
“Despite that, Nigeria represents a country with significant energy resources, huge growth potential, and an untapped demographic dividend. In the off-grid space, NERC’s forward-looking regulations have helped catalyze private sector investments into distributed renewable energy solutions, resulting in over 7.8 million Nigerians gaining access to electricity in the past five years, a truly remarkable achievement.”
The Vice Chairman of NERC, Dr Musiliu Oseni, said the commission has had a fair share of challenges and often opposition from stakeholders in the course of delivering on its constitutional mandates.
He said despite the challenges, the commission has recorded significant achievements in its two decades of existence.
“The Commission oversaw the privatisation and unbundling of the hitherto state owned vertically integrated monopoly. We have developed standard regulatory instruments to strengthen the electricity market, improve reliability of supply and enhance consumer protection. Relative to 20 years ago, not less than 30% of the electricity consumers have experienced significant improvement in their electricity services.
Through effective regulation, the Commission has saved the Federal Government several trillion of naira in subsidies thereby contributing to the improved fiscal position of the FGN.”
