Tinubu labels power sector privatization a failure

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A decade after the partial privatization of Nigeria’s Electricity Supply Industry (NESI), the Federal Government has acknowledged its failure to meet intended objectives. During the 2023 NESI Market Participants and Stakeholders Roundtable in Abuja, President Bola Tinubu, represented by Mr. Sodiq Wanka, the Special Adviser for Energy and Infrastructure, expressed disappointment in the current state of the power sector.

The government described the current generation, transmission, and distribution levels of just over 4,000 Megawatts as shameful. Despite a 10-year effort, more than 90 million Nigerians still lack access to a reliable power supply. The conference, with the theme ‘NESI Privatization and Its 10-Year Milestone: The Journey So Far, Opportunities, and Prospects,’ gathered industry players, government officials, and experts to discuss the challenges and prospects of the power sector.

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President Tinubu lamented the absence of expected investments from the private sector, which were intended to improve the power sector’s efficiency and energize the nation’s economy. He highlighted the fact that over 90 million Nigerians lack access to electricity, and the national grid serves only about 15% of the country’s demand. This has forced many households and factories to rely on expensive self-generation, which now accounts for 40% of the country’s power demand. Furthermore, the total electricity capacity transmitted through the national grid has seen little growth in the past decade, falling significantly short of the 40,000 Megawatts target set by the government before privatization.

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The Minister of Power, Mr. Adebayo Adelabu, expressed reservations about the decision to privatize the power sector, suggesting that commercialization might have been a more suitable approach. He emphasized that operational licenses for investors would not be automatically renewed unless they meet the terms outlined in the original licenses. Adelabu stressed the need for industry stakeholders to collaborate and address the challenges to remedy the sector’s failures.

Senator Godswill Akpabio, representing the Senate, acknowledged the critical role the power sector plays in Nigeria’s economic growth. Despite some progress, the objective of improving power supply remains unmet. The parliament is committed to enacting laws that create a conducive business environment for the power sector, with plans to amend the 2023 Electricity Act to account for the latest industry developments.

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Prof. Stephen Ogaji, Chairman of the Conference Organizing Committee, acknowledged the formidable challenges facing the power sector and emphasized the importance of the energy sector in driving economic growth. The NESI Roundtable brought together representatives from various sectors, including public and private stakeholders, regulatory bodies, investors, technocrats, and visionaries, all sharing a common goal of enhancing and shaping Nigeria’s energy future.

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