Power Outages Ruin Nigerian Businesses

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Nigerians are suffering as their businesses collapse due to worsening power outages in the country as electricity generation drops to about 3000 megawatts while tariff has been increased to an all-time high

By Anayo Ezugwu  |  Dec. 22, 2014 @ 01:00 GMT  |

DESPITE the recent increase in the Multi-Year Tariff Order, MYTO, by the Nigerian Electricity Regulatory Commission, NERC, power supply in the country has deteriorated. Realnews investigations show that the power situation has gone from bad to worse since the federal government increased the tariff and that Nigerian businesses are dying because of incessant power outages and its attendant hike in production cost.

Moses Diugwu, a hair-cutter at Ajuwon, said the power supply has been terrible in his area since two after the increase in tariff started. He complained about the amount of money he spends fuelling his generator on a daily basis. “I spent N1000 on a daily basis to power my generator. On the average, I charge N200 per haircut and how many hairs do you think I would cut in a day to break even? Many of us operate at a loss, we are in the business not because of its turn-over but because we have no alternative. That we have to spend so much on generator is greatly affecting our profit. Imagine if there is stability in power supply, nothing will stop us from living a comfortable life. I will implore the government to urgently tackle whatever it is that is hindering stability in electricity generation for businesses and Nigerians to thrive,” he said.

Isioma Ogana, a shop owner at Ojo, said her experience in the past three weeks is terrible. According to her, no day will past without the area having electricity even for a second. “But what I found difficult to comprehend is the mystery behind Nigerians not having electricity supply when Ghana, a country that is not as advantage as Nigeria can provide stable electricity for its citizen. I believe the issue has to do with bad leadership and mismanagement of fund and innocent Nigerians are made to bear the grunt in the way of insecurity, joblessness and substandard living. Even those that require electricity for their businesses cannot afford to cope with the high cost of fuelling their generators.”

According to her, with power outage, the over-head of operating businesses in Nigeria is far too high to the extent that it is affecting service delivery and staff remuneration. “So, how do the government hope to combat poverty, crime and other social ills when constant electricity supply which is the ingredient for business growth and adequate security is impossible to actualise? I think the provision of electricity to the populace is the easiest of all national task, it is just that our leaders are not ready for it,” she said.

Sam Amadi
Amadi

The timing for the current increase in electricity tariff came at the wrong time when the quality of service delivery has been at its lowest point. Even though the economy and the nation’s population have increased geometrically over the years, the power generation capacity of only 3,000 megawatts is not encouraging. Besides, due to poor facilities’ maintenance arising mainly from the lack of investment and inadequate gas supply, there is hardly up to 4,000MW available for distribution through the national grid on a regular basis.

The NERC had on December 1, increased the tariff to meet the demands of the generation companies which stated that the increase in gas price by $1/mmbtu would warrant a rise in electricity bills. According to the regulatory body, the gas component in the power value chain is a major factor that cannot be ignored. “I doubt if a rise in gas price by about 40 per cent per mmbtu won’t warrant a corresponding increase in tariffs considering the significance of gas to power plants in Nigeria. This is because most power plants in Nigeria today are gas-fired,” an official of NERC said.

Data from the systems operations of the Transmission Company of Nigeria, TCN, showed that available generation on six months average ending September 30, was 3,675.41 megawatts. The gross capacity was therefore estimated to be 5,556MW but the last available generation capacity was 3,424MW.

Chinedu Nebo, minister of power, said Nigeria has to increase the maximisation of gas utilisation capacity if the country is to experience stability in electricity supply. Nebo, who was speaking in Uyo during a retreat organised and facilitated by Noel Akpata of Stratex Pro Services Limited, noted that the power ministry would continue to work with the ministry of petroleum to create an enabling environment for private and public sector investments and partnerships.

He said that there would be a robust procurement process for coal utilisation, leading to bankable feasibility studies driven by the ministry of power in the country, adding that a private investor like Zuma Energy is at an advanced stage in building collaborations to execute a coal power plant in the south-eastern part of Nigeria. While asserting that the transmission infrastructure requires huge financial resources, he stated clearly that government may not on its own have such funds to invest but would create enabling policies that could attract the organised private sector to support government in expanding its transmission capacity.

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