Electricity Crisis in Nigeria: The keys to improved service delivery

The electricity crisis in Nigeria has defied various attempts at solving the problem and giving Nigerians the benefits of enjoying stable electricity and a good quality of life for more than half a century. It is no secret that the nation’s power infrastructures were abandoned for several decades, by successive governments notwithstanding the exponential growth in population, until the civilian administration of Chief Olu Obasanjo instituted series of reforms aimed at not only addressing the low capacity power generation, but also improve electricity delivery to the people.

However, despite the huge investments in billions of U.S. dollars to date, the efforts have not yielded the desired results or returns on the investments. Successive administrations since 1999 have continued the privatizations of National Electric Power Authority (NEPA), Power Holding Company of Nigeria (PHCN) including their unbundling into power generation, power distribution and power transmission entities along with the creation of the National Electric Regulatory Council (NERC) and the bulk power purchasing entity to name a few, with really nothing to show by way of tangible improvements in outcome. Essentially the initial privatization In a nutshell the privatization efforts which started in 1999 has failed to date, because no matter how well intentioned the efforts were at the onset, it did not fundamentally address the root cause of failures in the industry, which aside from the systemic corruption, patronage and lack of transparency and unethical conducts was the monopoly the parent company and succeeding entities have enjoyed to date in their various operating regions.

We have taken a clinical look at the various reforms, while also examining some of the challenges that are well known and thus have arrived at the logical conclusions that the absence of competition in the industry and within the DisCo’s operating regions is the major impediment to improved power delivery in the country.
The absence of genuine leadership, coupled with incompetent and fraudulent entities begotten through dubious privatization exercises have produced failed entities that were not designed for optimal service delivery, but as fee collecting entities to cronies of government officials, retired generals, politicians and senior bank executives. The recent policy announcement by NERC of segregating customers into band A, B, C and revising the rates charged per Kilowatts hour is an effort at managing the constraints on available power capacity and improving the DisCos’s revenue generation and not about overall improved service delivery in the nation.

However, solving the power crisis in Nigeria requires breaking up the monopoly enjoyed by the various iterations of the NEPA/PHCN organizations, that is the generating, distributing and transmission companies to ensure improved service delivery. The breakup should ensure the presence of multiple players within operating regions as this will introduce competition to the marketplace and incentivize investments to boost service delivery.
In all seriousness how can we privatize NEPA/PHCN and create exactly succeeding entities that looks, act, operate and are configured like NEPA/PHCN? Who are we fooling? Because, if we are deadly serious about improving electricity access, then the power architecture must be reconfigured to allow for true competition in the marketplace which exactly is what will drive service delivery and competitive pricing.

The recent changes to our existing laws that allow each state to invest, develop and transmit their own electricity now will in the long run help to improve power service delivery in Nigeria if they are in direct competition with existing players in the industry.

While one is not opposed to implementing segregated power delivery and competitive pricing regime for now as a stop gap measure based on customer needs, but the long-term solutions at improving overall electricity service delivery and transforming the industry includes the following:

1. Enabling through legislation an end to the monopoly enjoyed by the various power entities especially the GenCo’s and Disco’s by providing for multiple providers in each operating zone.
2. ⁠Passing felony legislation and the mandatory 20 years jail term for tampering with electricity infrastructures.
3. Impose stiff penalties including serious jail time, immediate firing and loss of pension’s on employees of power utilities who collude with customers to bypass meters and temper with electricity infrastructures.
4. ⁠Mandating immediate deployment of prepaid meters across the nation while prohibiting estimated billing’s.
5. ⁠Approving multiple prepaid meter vendors.
6. ⁠Enabling competition by giving consumers choice of electricity provider in their respective regions.
7. ⁠Completely disposing government ownership stakes and focusing on regulating the industry to ensure improved market space and service delivery.
8. ⁠Strengthening existing legislation that streamline the steps for revocation of licenses due to nonperformance across the sector.

The importance of adequate electricity in the life of any nation cannot be overemphasized, given the additional and indirect tax burden it imposes on businesses and families through their purchases of generators, gasoline and diesel to meet their power supply needs. While the nation has wasted billions of dollars to date, implementing most or all of the aforementioned steps will move Nigeria closer to meeting her electricity needs. Finally, it is critical for the federal government, the National Assembly and state governments to collaborate further and pass required legislations suggested in the above proposed reforms in order to transform our nation and improve the quality of life of our people.

Osaikhuiwu is a U.S. based service delivery manager, a certified project manager with expertise in process improvements, change management and elimination of waste, fraud and abuse.