Structure, biggest challenge of Nigeria’s power sector

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Lack of proper structure has been identified as the biggest challenge of the power sector in Nigeria. Over the years, pre-privatization and post-privatization period, the challenge of an adequate structure has been recurrent, and instead of replacing, it is always repaired, either due to inadequate finance or some sort.

Roseann Casey, Representative of the United States Power Africa, a U.S. government-led initiative coordinated by the U.S. Agency for International Development (USAID) on Technical partnership, stated this at the signing of its Memorandum of Understanding, MoU, with Ibadan Electricity Distribution Company, IBEDC, at the Obasanjo Presidential library at Abeokuta in Ogun state.

Casey stated: “There are so many debts in the system. There are a lot of mentalities that people, institutions should not pay for power. If no one is paying for power, the companies cannot provide power supply, and it is a circular problem. “So, if there were functional institutions and mindset changed, the power sector would be improved but it takes a little bit of trust at a time when nobody wants to trust because of the past experience. But also the sector went through a huge transformation process that brought in a lot of different players. It wasn’t totally smooth as there is a lot of complicated difference that is needed to be worked on. And so, working some of these systemic issues between institutions is so important. Nigeria has a functioning power sector.”

Meanwhile, the management of IBEDC said it entered into the partnership with Power Africa, in a bid to advance power delivery across the network coverage. Managing Director/ Chief Executive Officer, CEO, IBEDC, Mr John Donnachie, said the partnership is aimed at developing the company’s capacity. His word: “The first two months of the partnership is really looking good for us and so we are going to be training, hiring people and having better customer service across our network areas. We strongly believe that with the partnership we had today, it would drive local performance into local regions that we are looking at. We have seen the results of the capacity building, improvement in performance. If we collect more, we would be able to do more.”

Earlier in her presentation, Casey stated: “Aggregate energy losses have been reduced at some of the DISCOs which had received their partnership (Abuja Electricity Distribution Company, AEDC Benin Electricity Distribution Company, BEDC, Eko Electricity Distribution Company, EKEDC), and revenue collection increased by N27 billion (approximately $75 million) in 2017. “Enhancing technical and operational efficiency, reducing losses, and making it easier to collect payment will boost the bottom line at DISCOs, inject cash into the energy value chain, and attract investment for electricity expansion projects that will benefit people and businesses across the country.” Power Africa’s support to the four distribution companies represents a $12 million investment in the self-reliance and resilience of Nigeria’s energy sector and demonstrates USAID’s position as the world’s premier international development agency.

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