Over 90 million Nigerians lack access to electricity.

President Bola Tinubu of Nigeria has said that the objectives of the privatisation of the country’s power sector, which was carried out in 2013, have not been met.

Tinubu spoke on Monday at the 10th anniversary of the privatisation of Nigeria’s power sector and the 1st Nigerian Electricity Supply Industry (NESI) market participants and stakeholders roundtable (NMPSR) held in Abuja.

He said that 10 years after the privatisation, over 90 million Nigerians still lack access to electricity. He added that the national grid only serves about 15% of the country’s demand, and that households and factories have to rely on expensive self-generation, which supplies a staggering 40% of the country’s demand.

Tinubu said that the reasons for the underperformance of the sector in the last decade are well known. He said that there are deep commercial, governance, and operational issues that have beleaguered the sector.

He added that only around 45% of NESI customers are metered today, with wide variations across DISCOS. He said that the scale of investment needed to meter current and new customers and replace obsolete meters is not trivial.

Tinubu said that the government is committed to supporting the metering drive through the World Bank DISREP programme, which should add at least 1.25 million meters, while activating the meter acquisition fund to procure another 4 million meters.

However, he said that we must also realise that long-term sustainable metering should be within the remit of DISCOS and their partners.

Tinubu said that we need to have a clear plan to rebase tariffs, so we recognise the real costs and loss levels of the entire value chain, and we allow for adequate cost recovery for investments. He added that we need to be clear on what shortfalls are and how we will finance them.

He also said that there must be a clear path to extinguishing historic sector debts to various value chain stakeholders. He said that a reconciliation exercise in this regard is already underway.

Tinubu’s comments come at a time when Nigeria is grappling with a severe power shortage. The country’s power generation capacity is about 13,000 MW, but the actual generation is often below 5,000 MW. This has led to widespread blackouts and power rationing.

The privatisation of the power sector was expected to improve the efficiency and reliability of the sector, but it has not had the desired effect. The sector is still plagued by a number of problems, including tariffs that are below cost-reflective levels, inadequate investment in transmission and distribution, and poor governance.

It is unclear how the government plans to address these challenges. However, Tinubu’s comments suggest that the government is aware of the problems and is committed to finding solutions.

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