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No to Reverse Privatisation of Nigerian Power Sector By Keem Abdul



One of the common factors we notice about great people, great organisations and great nations is that they are often maligned by those who do not mean well for the generality of a society. Also, many people take for granted the numerous sacrifices that successful people and organisations make in order to attain and maintain greatness. It is especially so with great business organisations. Their leaders make tremendous sacrifices and motivate others in their employ to do the same towards the attainment of outlined goals and visions. Others from the outside looking in may mock, deride or dismiss the efforts made, and sometimes even people who ought to be stakeholders do so and end up pulling down those trying to help them and who they ought to help.


As Nigeria adjusts to the realities of the effects of the novel coronavirus (COVID 19) pandemic on its citizens and economy, perhaps one of the sectors that will be hit the hardest is the country’s electricity sector. Nigeria has a population of approximately 200 million people (the largest in Africa). About 40% of the country’s population have no access to electricity and even for those who have access, the supply is usually epileptic as the country’s current operational capacity stands at less than 4,000MW. Power is critical to the country’s economy and especially so in light of the Nigerian government’s quest to diversify the economy away from dependency on crude oil and stimulate the growth of its agricultural and manufacturing sectors. According to a 2019 report on Nigeria’s power sector by the acclaimed Price Waterhouse Coopers (PwC), “Economic diversification is needed to ensure inclusive growth that would provide jobs for the rising unemployed Nigerians and check against the escalating number of extremely poor people in the country. The success of any economic diversification and inclusive growth strategy is anchored on industrialisation, In turn, massive industrialisation depends on a robust, sound and highly efficient power sector which will ultimately bring about the needed economic transformation envisaged. PwC estimates that for Nigeria to combat poverty and under- and unemployment, the economy would need to grow at 6% – 8%.”


Even though many challenges such as insufficient gas supply and variability in rainfall and water level at hydro plants continue to hamper power generation in Nigeria, many private sector entities are committed to Nigeria’s efforts to improve its power situation. Beyond power supply to the most populous black nation in the world, the private sector through their company’s strong Corporate Social Responsibility has significantly bettered the communities where its power generation work is done. Some of the private sector company’s CSR interventions focus on areas like: Education, Health, Community Empowerment and Environment. Notably, since the advent of the COVID 19 pandemic, and like many other companies in Nigeria,  The power generating companies has been at the frontline of private sector efforts to mitigate the pandemic’s spread, donating  cash and equipment despite all odds, the debts owed this companies  are humongous yet they have kept faith with their commitments to their host communities, as well as to staff and the citizenry of Nigeria.


As if that isn’t bad enough, there is a well-oiled campaign by certain unscrupulous, unpatriotic entities to get the Nigerian government to undo the successful power sector privatization of 2013. Some politicians are now calling for reverse privatization but they are merely the face of those behind the scenes, plotting to annex valuable assets and undo the progress made by those who have invested heavily in the sector. If the government were to yield to their pressure, it would severely damage not just existing agreements and investments, it would scare off future investments of any kind into any sector of the Nigerian economy. It would be sadder still because the power generation companies are steadily increasing their capacity to produce power. Right now, their combined capacity stands at about 13,000 MW but they put out about 7,500 MW, of which the TCN and the distribution companies can only deliver 4,000 MW to Nigerians. Even as demand is greater than supply, the distribution companies’ remittances to the Nigerian Bulk Electricity Trading PLC (NBET) is less than 50%. NBET in turn is unable to remit to the market operators and generation companies, thus resulting in a liquidity crisis in the sector.


That liquidity crisis is compounded by the fact that electricity charges to consumers largely are disproportionate to the costs of generating, transmitting and distributing power. A 15-year tariff path tagged the “Multi Year Tariff Order” (MYTO) was created by the Nigerian Electricity Regulatory Commission (NERC) and it was a bit fairer to the generation, transmission and distribution companies and other industry stakeholders. The MYTO was supposed to have minor upward reviews twice a year and major reviews once in five years but even this has not been followed. An upward review was supposed to have taken place this year and was scheduled for the 1st of July 2020. It has now been postponed to the first quarter of 2021 due to appeals from the National Assembly for consideration of the economic plight of Nigerians due to the ongoing coronavirus pandemic. The generating companies agreed to this concession in good faith despite the setbacks this would inflict to the financing of loans taken and repayment plans already agreed with investors and financiers. To now reverse the privatization of the power sector would be a grave injustice indeed especially considering how the generating companies have upped their capacity, maintained world class operational standards and followed through on CSR commitments even in the face of a mountain of unpaid invoices.


Thankfully, many stakeholders including the Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) are aware of these sacrifices made by the “gencos” and have displayed an impressive commitment to do what is right. Nigerians must be alert to the clear and present danger of the suggested reverse privatisation of the power sector. It is not only the labours of our past heroes who have gone on to the great beyond that should not be in vain. The labour of living Nigerians who have given their blood, sweat and tears towards the greatness of the nation must also not be allowed to be in vain.

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