U09ce:
I was told that the only viable discos are Eko and Ikeja. Even Abuja disco is struggling - due to the neighboring franchise states (Niger, Kogi and Nassarawa). The privatisation of PHCN was ill thought and badly implemented. The power sector is unlike telecommunications where strong competition entrenched fairer prices. The value chain for power sector is longer--the gas supply part of it is dollar dependent. Thus, it's prone to several vagaries.
The minimum wage for workers is currently a measly 30k. The average take home of Nigerian families is probably less than 50k monthly. A KWh of electricity is now at least 60 Naira. A modest house spends up to 20k per month for 15 hours of electricity. How do you expect such a family living in penury to pay the power costs?
The government needs to get a viable solution to this mess

nairalanda1:


1. I don't recall abusing you

2. I don't see why you should abuse me

3. I also see that you have no points to refute my comment.

4. Stop acting like a two year old. You are an adult,behave like one. And stop disgracing your parents here. They brought you up better than this.

5 Good morning

BloomingDale:


It’s insult, not abuse.

nairalanda1:
This is what happens when government controls prices and pays and subsidy. Debt results

Says so in the article. Sub economic tarrifs. That means that government forces the discos to charge prices below the production cost, which in turn forces them to operate at a loss.

And then they find it difficult to pay loans , hence the lender taking over.

But because of sub economic tarrifs, the companies cannot make a profit. So despite the new management, the companies lose money


Moral of the story is electricity is not cheap. It has to be priced appropriately to make a profit.

budaatum:


Electrical Tomatoes

"Price controls"! It means a product is kept at a price set by government, and in Nigeria, we know it's kept low and very likely beneath the cost at which it can be sold at a profit. Like petrol really. But we can at least claim a reason for petrol with our crude oil and our ineptitude at running refineries. Electric though!?

Imagine it were tomatoes. You invest in land and fertiliser and labour and grow them, and when you get them to the market, government sets the price. I'm absolutely certain if that price is higher than the cost at which you grow your tomatoes, you wouldn't mind much. You'd likely be delighted if it's high enough for you to make a tidy profit. And if you're fortunate and the price set is so high, you'd likely invest in more land and more fertilizer and more labour and grow even more tomatoes. But this is Naija, where the price set by government is more likely to be way below your costs so that after you sell your tomatoes, you would have lost money.

Now think, you lost money on your tomatoes. Are you going to plant tomatoes next season? If you're into the charity business or you're stupid, you just might. But if you're not and have rent and school fees for your kids to pay and you want to eat and pay the interest on a loan I very much doubt you'd be stupid enough to throw your money away growing unprofitable tomatoes!

Well, that's the case with electricity in Nigeria I'm afraid. You generate it, transport it along unreliable transmission wires, lose a large chunk of it to illegal use and theft and what you do get paid for does not cover the cost of producing it. Now tell, would you plant electricity next season? I very much doubt it unless you're into the charity business or you're stupid, of course, but somehow, I just can't imagine you'd be either.

So, what's the solution you might wonder. Increase the price of electricity of course. But come on people, increase the price of electricity so electricity planters can earn more money and plant more and sell more? Surely you must be cursing me by now, or haven't you noticed you'd have to pay more for my electric if you want it?

Ok, perhaps you're all nice civilised folks and don't want to curse me so let's try a different way of looking at this. Imagine Buhari removes the price control so I can sell my electricity at a market determined price like I currently sell my tomatoes no doubt at a profit high enough for me to want to plant more next year. Are you cursing me yet? I'm sure you would be if it was the subsidy on petrol I were talking about removing. Hell no! You'd likely stone me if you could get your hands on me!

Well, that's what this piece is saying where it says "The private sector is given little incentive to invest.” After all, I'm in the electric planting business for the money and the profit and not because I love you all as Adam Smith would say, so why give you light if you aren't paying me for the priviledge! And you wanna complain you're in darkness?!

When you pay me enough to cover my planting of tomatoes after paying for the land and the fertilizer and the labour and the interest on a loan and cover what I lose to theft and illegal harvesting, and still make a tidy profit to reinvest, I will plant 12000megawatts of tomatoes and I will sell 12000megawatts of tomatoes and even more megawatts of tomatoes than you can eat even because you would be incentivizing me to invest what you pay me in more land and more fertiliser and more labour to plant more tomatoes so I will have more tomatoes to sell you and make more money. But if you want cheap electric, keep your price controls and don't incentivize me but don't expect me to waste my time labouring in the sun just so you can have light because, like you, I ain't that stupid nor into the charity business!

Anyone cursing me yet, because I am telling you, we are too cheap!