Nigeria spends about $13 billion (about N1.95 trillion) every year to provide electricity from generators, President Goodluck Jonathan said yesterday in Abuja.

Mr. Jonathan, who was speaking at the presidential retreat for power investors at the presidential villa, observed that even at this rate, less than half the population of the country has access to electricity.

“With a population of more than 140 million people, and as the seventh largest deposits of natural gas, a major fuel for power in the world, we (Nigerians) are ready for business,” the president declared.

Reiterating that Nigeria requires just about $10 billion (N1.5 trillion) per year in investment over the next few years to develop her power generation, distribution, and transmission capacities, the president said the retreat was to gain a better understanding of the investor’s concerns, as well as gain insights from their experiences in other markets “so that we can build a power supply industry that works for all and grows as fast as possible.”

Costly venture

He lamented that, “Generating power from generators adds more than 40 percent to the cost of goods and services in Nigeria, and this we can ill-afford. Our mission, therefore, is for Nigeria to reach power reliability and sustainability within the shortest possible time so as to catalyze the much needed development.

“We know what is at stake, hence, the creation of the Presidential Action Committee on Power (PACP), which has finally birthed the roadmap for the reforms.”

Mr. Jonathan said his administration is determined “to implement the reform of Nigeria’s power sector in a way that Nigerians shall be proud of. We are determined to attract high quality investors with the record that ensures they will bring world class expertise and the industry’s best practices to our evolving power supply industry.”

Expansion plans

Following this, he said the federal government is now looking for companies that can efficiently and rapidly expand services to undeserved parts of the country, adding that in a country with tens of millions of potential new power consumers, “We need firms that can grow quickly. Our national interest dictates that we encourage investors who are willing to stand with us for the long term, not those without the requisite pedigree in the sector.”

He said a recent opinion poll sponsored by the World Bank confirmed that Nigerians are willing to pay cost reflective tariffs for electricity, due to the fact that even some of the poorest citizens, including artisans and small business people, spend considerable amounts on petrol-powered generators.

With the support of Nigerians, the president said his administration is committed to transforming decades of paralysing government monopoly into private sector efficiency.

“All we need to ensure its abundant supply is the investment transparency and efficiency management. We are determined to make the power sector reform fair to all concerned. In this reform, there will be no losers, and the Nigerian people, including workers, will be the beneficiaries.

“No one is in doubt that the biggest casualty of our epileptic power sector is our manufacturing sector and the jobs that could have been created for thousands and thousands of our citizens. The work of building a prosperous Nigeria cannot be done if our factories continue to run on generator,” Mr. Jonathan added.

He disclosed that the reforms allow investors to become involved under concessions or privatisation. From next year, the federal government will cease investment in power generation and distribution while planning to concession the management of the transmission company of Nigeria. Federal government will complete processes for already initiated hydro power projects, he added.

More spending

Minister of state for power, Nuhu Wye, said government has already calculated that about $10 billion per year needs to be invested throughout the power supply chain in order to achieve the relatively modest (by international capacity) target capacity of 40,000 mega watts (MW) by 2020.

Special adviser to the president on power, Barth Nnaji , said the Central Bank of Nigeria (CBN) has established a N300 billion intervention fund that can be accessed by prospective investors in the power sector to help in the private sector development of the sector.

He added that with the unbundling of Power Holding Company of Nigeria (PHCN), establishment of Nigerian Electricity Regulatory Commission (NERC), and the launch of the roadmap to power sector reform, the coast is now clear for private sector involvement, assuring prospective investors of the introduction of full cost reflective tariffs.

The lack of power has led to the closure of several businesses while those still open for business struggle to stay afloat. On Wednesday, the executive secretary (West) of the Manufacturers Association of Nigeria (MAN), Wole Akeukekere, told the News Agency of Nigeria (NAN) that over 70 manufacturing firms had closed down in the southwest in the last one year.

He said the membership of the association in 2002 was 120, but has now shrunk to 50 in Oyo, Osun, Ondo, and Ekiti States that made up the zone.

According to him, “Things are not rosy at all; the situation is getting worse every day and the major challenge confronting the manufacturing sector is electricity. It is not possible to manufacture manually.”

http://234next.com/csp/cms/sites/Next/News/National/Economy/5630661-146/nigeria_spends____n1.95tr.csp

This is the most pragmatic approach to solving the electricity debacle I've ever seen.

let us hope these are more than just election year promises

we heard a lot of this back in 2007

oyb:

let us hope these are more than just election year promises

we heard a lot of this back in 2007

Yes we heard a lot but not in this dimension.

If he says he will invest another $18bn in the sector, do you think that money will ever get to do the job?

This is a practical plan that even a idiot can implement. The critical part is the plan and that is what he has done

We have heard it All Before, It is not lack of funds that is holding us back from having enough MW to power the country, Its is basically lack on Political Will, From the above One can deduce that if that an Investment of $10 Billion= 10000 MW, which translates to twice our current capacity, When the Presidency and the Cabals keeping us in darkness decides that they now want us to have enough light , then we will,

They will just be calling billion, billion dollars but nothing on ground to show for it.

Whoever gave Mr. President these figures did not do their homework at all.

In Lagos State alone, the spend on power is over N900 billion per month. Sounds fantastic?? I thought it did too, until someone more knowledgeable than me on the subject sat me down to analyse it:

1. Banks: There are 23 licensed banks in Nigeria, and there's an average of 120 branches per bank in Lagos State. Each of those branches spends a minimum of N650,000 per month on diesel alone. That comes to N1.65 billion/month.
The head offices of each of the 23 banks will spend a minimum of N20 million per month on their giant generators. That comes to N460,000,000 per month, bringing banks' spend to a total of just over N2b per month in Lagos State alone.

2. Petrol Stations: There are over 4000, and counting, of these in Lagos State and they cannot operate without electricity. Average spend for a PFS is about N500,000 per month on diesel alone. Total of about N2 billion.

3. Eateries: Another fast growing industry. We're looking at an average of about N1m/month. Given that there are around 2000 of these all over Lagos State, we're looking at about another N2b/m.

4. Hospitals: Private hospitals, numbering in the hundreds, from the really swish to quack hospitals, all expend huge amounts on diesel. We can pro-rate based on the conservative figure of 1000 hospitals in Lagos state, and assume a spend of about N1b/m for ALL hospitals in Lagos State

5. Industries: The industries in Apapa, Ikeja, Ikorodu, Amuwo-Odofin, Ilupeju, will each spend not less than N5m/m on diesel, with some spending as much as N20m/m. On Oba Akran Road alone, Berger and Nigerite spend not less than N5m/m each on power, talk less of all the other industries on that road.

6. Telecoms: Every single telecoms mast in Lagos State has at least two 20kva generators, running on permanent 12 hour cycles. Each site consumes about N276k/m in diesel alone. There are over 1000 cell sites in Lagos State

7. Residences: VGC has about 5,000 residents, each consuming about N200k/m in diesel alone. That comes to about N1b/m. If we extrapolate this over Ajah, Badore, Northern foreshore, Jakande, Lekki Phase I, Oniru, Victoria Island, Ikoyi, Obalende, Lagos Island, with all its tower blocks, Ikeja (residential), Surulere, Aguda, FESTAC town, and so on, plus all the I-better-pass-my-neighbor in between,

Lagos State alone spends over N100 trillion per annum. Anybody with a better figure can supply it here. These people are trying to embarrass the President with such stupid and wildly inaccurate figures, Imagine, the whole of Nigeria, N1.9 trillion, when Lagos alone is spending over 50 times that!!! Maybe their agenda is to make the thing look better than it actually is.

Mr. President, ask them to break down their figures, or better still, create a database-driven website and ask everyone to visit it to input their monthly spend on power, you'll be shocked!

Lagos State is spendi

You're the one giving uninformed estimates and jumping illogical conclusions.

Even if you assume Lagos spends N900m on private power generation, isn't Lagos alone 60% of Nigeria's economy?

However, its not even the estimates that matter but the will to stop Nigerians from paying through their noses to generate power

felele:

Whoever gave Mr. President these figures did not do their homework at all.

In Lagos State alone, the spend on power is over N900 billion per month. Sounds fantastic?? I thought it did too, until someone more knowledgeable than me on the subject sat me down to analyse it:

1. Banks: There are 23 licensed banks in Nigeria, and there's an average of 120 branches per bank in Lagos State. Each of those branches spends a minimum of N650,000 per month on diesel alone. That comes to N1.65 billion/month.
The head offices of each of the 23 banks will spend a minimum of N20 million per month on their giant generators. That comes to N460,000,000 per month, bringing banks' spend to a total of just over N2b per month in Lagos State alone.

2. Petrol Stations: There are over 4000, and counting, of these in Lagos State and they cannot operate without electricity. Average spend for a PFS is about N500,000 per month on diesel alone. Total of about N2 billion.

3. Eateries: Another fast growing industry. We're looking at an average of about N1m/month. Given that there are around 2000 of these all over Lagos State, we're looking at about another N2b/m.

4. Hospitals: Private hospitals, numbering in the hundreds, from the really swish to quack hospitals, all expend huge amounts on diesel. We can pro-rate based on the conservative figure of 1000 hospitals in Lagos state, and assume a spend of about N1b/m for ALL hospitals in Lagos State

5. Industries: The industries in Apapa, Ikeja, Ikorodu, Amuwo-Odofin, Ilupeju, will each spend not less than N5m/m on diesel, with some spending as much as N20m/m. On Oba Akran Road alone, Berger and Nigerite spend not less than N5m/m each on power, talk less of all the other industries on that road.

6. Telecoms: Every single telecoms mast in Lagos State has at least two 20kva generators, running on permanent 12 hour cycles. Each site consumes about N276k/m in diesel alone. There are over 1000 cell sites in Lagos State

7. Residences: VGC has about 5,000 residents, each consuming about N200k/m in diesel alone. That comes to about N1b/m. If we extrapolate this over Ajah, Badore, Northern foreshore, Jakande, Lekki Phase I, Oniru, Victoria Island, Ikoyi, Obalende, Lagos Island, with all its tower blocks, Ikeja (residential), Surulere, Aguda, FESTAC town, and so on, plus all the I-better-pass-my-neighbor in between,

Lagos State alone spends over N100 trillion per annum. Anybody with a better figure can supply it here. These people are trying to embarrass the President with such silly and wildly inaccurate figures, Imagine, the whole of Nigeria, N1.9 trillion, when Lagos alone is spending over 50 times that!!! Maybe their agenda is to make the thing look better than it actually is.

Mr. President, ask them to break down their figures, or better still, create a database-driven website and ask everyone to visit it to input their monthly spend on power, you'll be shocked!

Lagos State is spendi

My assumptions are not fictional sir. These are very real costs being incurred by EVERYONE in Lagos State today. For instance, did you know that Federal Palace Hotel, as of January this year, were spending N1.1m/day on diesel alone? Or that the total diesel spend at Western House per month is about N4m

As I said before, if you have conflicting figures, put them up here for everyone to see, instead of carelessly dismissing somebody else's well-researched figures with an imperious wave of your keyboard. This is our reality today. Face it.

dappssee:

You're the one giving uninformed estimates and jumping illogical conclusions.

Even if you assume Lagos spends N900m on private power generation, isn't Lagos alone 60% of Nigeria's economy?

However, its not even the estimates that matter but the will to stop Nigerians from paying through their noses to generate power

Yeah, na today Government wake up to this one?