Nigeria continues its ascendency as Africa’s largest economy, despite having just 25 per cent of the power generation capacity of its economic rival South Africa. Having achieved so much with so little, there is no doubt that Nigeria has the potential to become Africa’s first global superpower.

“International studies suggest that Nigeria could potentially achieve over 7 per cent annual GDP growth, making it a top-20 economy by 2030 with GDP of more than $1.6 trillion – four times the current GDP,” says Siemens Nigeria CEO Onyeche Tifase.

“This translates into 70 million people being moved above the poverty line in little more than a decade. But the fact remains that this potential will never be realised without sufficient access to end-to-end electrification, which is the backbone of any thriving economy. This includes power generation, transmission, distribution and the efficient application of electrical energy through automation.”

About 60 per cent of Nigeria’s 182 million population have access to electricity. The majority of this power is generated by an ageing and inefficient grid that loses 8.6 GW (69 per cent) of the country’s 12.5 GW installed capacity.

These substantial losses are a result of inefficient controls, monitoring technology and outdated infrastructure. Investment in proven end-to-end electrification technology will directly tackle the scourge of unemployment, poverty and inequality, creating an inclusive and prosperous Nigeria.

With uninterrupted access to electricity, businesses are more productive, hospitals provide better medical care, children receive a better education at school, and homes are safer and more comfortable.

GENERATING A SUSTAINABLE FUTURE

To make electricity more easily accessible to the whole population, power generation capacity must be ramped up and streamlined.

The Azura Edo Independent Power Project (IPP) helps to meet both of these criteria. This open cycle gas turbine will generate an additional 459 MW to the national grid when it comes online in 2018.

Once fully completed, it is expected to add 3 GW of additional capacity – accounting for approximately 20 per cent of Nigeria’s projected installed capacity by 2020. That is a massive increase in power generation for a country at Nigeria’s stage of development.

In recent years, there has been a mind shift away from the traditional notion of generating large volumes of power for the entire population from only a handful of large centralised sources. We are now turning to smaller decentralised sources to generate electricity closer to the people who use it.

In a decentralised system, there are more small-scale individual producers that are all connected to the grid, ensuring an effective and reliable supply where it is needed. There are many technologies that make up decentralised power generation, including gas, solar, wind and hydro.

Another growing trend is mobile power generation – a plug and play solution where an entirely modular station can be built and modified to exact specifications and delivered to industrial plants that operate in remotely-located regions with poor infrastructure.

ACCESSING POWER THROUGH A SMART DIGITAL GRID

Transmission and distribution are equally challenging links in the Nigerian electrification value chain. These challenges are exacerbated with an evolving demographic that has a growing population migrating to the cities that are ill-equipped to absorb this growth.

Access to electricity is fundamental to sustaining these growing urban populations and creating efficient cities that run on smart digital grids. In other words, cities that function seamlessly on a sustainable electricity network that sends and receives accurate data and information in real-time.

A smart digital grid allows renewable energy to be integrated into existing power networks, resulting in the reliable and efficient supply of sustainable electricity to all areas that need it. It also takes into account illegal connections, which obstruct seamless electricity transmission and distribution.

Without sophisticated tracking systems to pinpoint illegal connections, electricity theft reduces power availability for paying customers, and has severe financial implications for Nigerian distribution companies (DisCos).

Manual revenue collection also opens up the door for corruption. This is where smart metering software is crucial, as it ensures accurate power consumption data is sent directly to a power utility via a network of application servers, enabling immediate supply and payment.

In fact, advanced metering infrastructure has evolved far beyond simple smart meter technology. It is a reliable, secure and cost-effective alternative to a standard smart metering solution that requires a large amount of capital expenditure for procurement, installation and management.

It also delivers peace-of-mind that the deployment will always be available, reliable, highly responsive, and fully secure for mission-critical meter-to-cash process.

Advanced metering infrastructure drives immediate business case return-on-investment with decreased deployment times, no resource ramp up requirement, and no large capital expense of an onsite solution.

It delivers a revenue security solution by simplifying budgeting with a predictable monthly per meter cost. All of this dramatically improves revenue collection and cash flow compared to current standard transfer specification meters that are limited to manually recorded prepayment functions residing on the meter.

POWERING A BRIGHT FUTURE

The Nigerian government’s Power Sector Recovery Program (PSRP) has already made strides in implementing power sector reform, reducing losses in DisCos, enhancing the sector’s financial viability, increasing access to electricity services, and mobilising private sector investment.

For the PSRP to succeed, government and independent power producers should work collaboratively with tried and trusted suppliers with proven global experience and expertise across the entire value chain, including power generation, transmission, distribution and automation.

Never before in Nigeria’s history has it had such great access to the technology and expertise to build a modern state on the back of modernised electrification infrastructure. This is a perfect storm of opportunity.

Source: https://www.premiumtimesng.com/business/business-interviews/243203-powering-nigerias-global-economic-rise.html

Father Lord, please let all these proposals listed in this article, become a reality sharp-sharp, in Jesus name. We have had enough of poor power supply. Anyone who tries to sabotage any attempts to improve the supply of electricity, or the project to generate additional megawatts and insert it into the national grid, may thunder fall on him by fire, by force! And all the people said.....!

Very nice analysis, but there's just one problem: who will invest their money into a "smart" grid in a country where the official currency rate is artificially capped at an extremely unrealistic value, and in which power-sector participants aren't allowed to charge realistic prices because politicians fear the backlash that might ensue?

Despite all the mockery Fashola receives for allegedly saying power generation wasn't rocket science, this is indeed the case. Nigeria's problems with power come down to a political refusal to face basic economic realities, not any technological problems which are hard to rectify, and until Nigerians accept that reliable power will have to cost a lot more than what they currently pay (assuming they even pay at all, which many parastatals, LGAs and state governments don't), they will have to make do with the status quo, as no investors will be foolish enough to plow billions of dollars into a sector with no prospects of sufficient profits to make it all worthwhile.

This woman is a good saleswoman. Her policy proposals are logical as well. What's the big takeaway for me is fact 69% of power is lost and we still need to integrate 20% of population to grid. A lot of these policies are bring implemented little by little though. Some on state level others on federal.

She works for Siemens btw.

omohayek:
Very nice analysis, but there's just one problem: who will invest their money into a "smart" grid in a country where the official currency rate is artificially capped at an extremely unrealistic value, and in which power-sector participants aren't allowed to charge realistic prices because politicians fear the backlash that might ensue?

Despite all the mockery Fashola receives for allegedly saying power generation wasn't rocket science, this is indeed the case. Nigeria's problems with power come down to a political refusal to face basic economic realities, not any technological problems which are hard to rectify, and until Nigerians accept that reliable power will have to cost a lot more than what they currently pay (assuming they even pay at all, which many parastatals, LGAs and state governments don't), they will have to make do with the status quo, as no investors will be foolish enough to plow billions of dollars into a sector with no prospects of sufficient profits to make it all worthwhile.

Do you realise that electricity rates have gone up a couple of times since the DISCOs took over power distribution? Check the MYTO scale of rates. And yet, power supply has not improved in many parts of the nation? Forget Lagos, Abuja and Port-harcourt.... many communities in Nigeria cannot even afford to pay the current electricity rates, especially in areas where power supply is hardly ever stable. In many states, workers are being owed salaries and a huge backlog of allowances. Job losses are becoming more common by the day, and DISCOs are using the non-availability of pre-paid meters, to fleece existing consumers by issuing them with estimated bills of stratospheric proportions.

I have seen 2-bedroom flats occupied by a single person with limited electronic gadgets being billed 30,000 naira monthly for electricity, based on estimated bills. There was even a whole month when the guy was out of town, yet the bill still came as usual with the same amount written on it. Now what do we call that?

Within the electricity generating and distribution cycle, there is too much waste, internal corruption and very little will to solve the electricity distribution problem. Raising electricity rates is not a solution.

Blue3k:
This woman is a good saleswoman. Her policy proposals are logical as well. What's the big takeaway for me is fact 69% of power is lost and we still need to integrate 20% of population to grid. A lot of these policies are bring implemented little by little though. Some on state level others on federal.

She works for Siemens btw.

Why is it so difficult to upgrade, rehabilitate and improve the electricity distribution system or grid? The problem is not insurmountable. Until the grid is overhauled and the 69% which is being lost is captured and distributed, we would still be left with the same problem of poor electricity supply. It is said that electricity generation has been decentralised or liberalised. We need more investors to partner both the GENCOs and DISCOs. A lot of the DISCOs who bought over the old PHCN assets, did not realise the magnitude of the problem on ground, and many did not have the requisite knowledge and funding, to fix it from the onset. That is why the problems have remained, instead of diminishing.

Nigerians always talking and talking about development

Put nta, they're talking about development

Put ait, they're talking about development

Yet no one is listening....

Your president has only been in the country for only 2 weeks out his 2 years current tenure

Blue3k:
This woman is a good saleswoman. Her policy proposals are logical as well. What's the big takeaway for me is fact 69% of power is lost and we still need to integrate 20% of population to grid. A lot of these policies are bring implemented little by little though. Some on state level others on federal.

She works for Siemens btw.

what investments has she made in nigeria?

Or is she only good at talking?

People should lead by example abeg

That is how you folks wanted a man with only 70 cows lead you to riches

raker300:
what investments has she made in nigeria?

Or is she only good at talking?

People should lead by example abeg

That is how you folks wanted a man with only 70 cows lead you to riches

She's the CEO Siemens Nigeria and shes black since her logic could not reach you.

laudate:


Do you realise that electricity rates have gone up a couple of times since the DISCOs took over, power distribution? And yet, power supply has not improved in many parts of the nation? Forget Lagos, Abuja and Port-harcourt.... many communities in Nigeria cannot even afford to pay the current electricity rates, especially in areas where power supply is hardly ever stable. In many states, workers are being owed salaries and a huge backlog of allowances. Job losses are becoming more common by the day, and DISCOs are using the non-availability of pre-paid meters, to fleece existing consumers by issuing them with estimated bills of stratospheric proportions.

I have seen 2-bedroom flats occupied by a single person with limited electronic gadgets being billed 30,000 naira monthly for electricity, based on estimated bills. There was even a whole month when the guy was out of town, yet the bill still came as usual with the same amount written on it. Now what do we call that?

Within the electricity generating and distribution cycle, there is too much waste, internal corruption and very little will to solve the electricity distribution problem. Raising electricity rates is not a solution.

Actually, even with the price increases, the cost of electricity in Nigeria has not increased sufficiently to meet the cost of generating and distributing it.

To begin with, the capital expenditure costs of the GENCOs and DISCOs are in US Dollars, not in Naira, as they have to import all the fancy electrical equipment they use, so any price increases that fail to fully keep up with the depreciation of the Naira will be insufficient for them to recover their costs.

The next thing to take into account is that these price increases you mention were from what was already an artificially low price cap, imposed by the GEJ administration to avoid setting off protests like the ones accompanying GEJ's aborted attempt to remove the fuel subsidy. Even with zero Naira depreciation, those prices would still have led to the GENCOs and DISCOs eventually going broke, and the GEJ administration simply attempted to kick the problem down the road for someone else to deal with (as is now the case).

While we're at it, let me add that while there is room to criticize the DISCOs for not issuing meters more aggressively, the bulk of the blame should really lie with a government which placed such duties in the hands of the DISCOs in the first place. Nothing stopped the GEJ privatization program from saying "customers should be able to buy meters from any certified distributors", but whether out of malice or ignorance, they chose not to impose such a requirement. This is something the current administration is now trying to change, with Osinbajo announcing today a new policy along the lines I just discussed.

Finally, you can say that the current infrastructure is "wasteful" or what have you, but that still doesn't change the economic arguments I've made. Just because you personally think the GENCOs and DISCOs can magically cut "waste" and attain profitability doesn't mean things will be seen in the same light by the bond buyers, common stock purchasers and international banks these companies must raise funds from. What these funding sources will care about is how Nigeria's power companies charge in artificially "strong" Naira but must pay their debts in US Dollars, how the prices they charge customers are extremely low by international standards even at the sham "official" Naira/USD rate, and how so many Nigerians (like you yourself) feel entitled to not pay more realistic rates until power companies which are teetering on the edge of bankruptcy are able to magically raise billions of USD to fund 24/7 reliable infrastructure. Do you see the likes of the NYSE, the LIBOR market or Chase Manhattan buying that sort of investment story?

TLDR: I understand why you hate how things are, but there is simply no chance of you ever enjoying reliable year-round power until companies are free to charge enough to draw huge amounts of private investment into the sector. Wanting things to work the other way round won't budge foreign investors one bit, no matter how much you might wish otherwise.

you no do coal power generation again?

omohayek:
Actually, even with the price increases, the cost of electricity in Nigeria has not increased sufficiently to meet the cost of generating and distributing it.

To begin with, the capital expenditure costs of the GENCOs and DISCOs are in US Dollars, not in Naira, as they have to import all the fancy electrical equipment they use, so any price increases that fail to fully keep up with the depreciation of the Naira will be insufficient for them to recover their costs.

The next thing to take into account is that these price increases you mention were from what was already an artificially low price cap, imposed by the GEJ administration to avoid setting off protests like the ones accompanying GEJ's aborted attempt to remove the fuel subsidy. Even with zero Naira depreciation, those prices would still have led to the GENCOs and DISCOs eventually going broke, and the GEJ administration simply attempted to kick the problem down the road for someone else to deal with (as is now the case).

While we're at it, let me add that while there is room to criticize the DISCOs for not issuing meters more aggressively, the bulk of the blame should really lie with a government which placed such duties in the hands of the DISCOs in the first place. Nothing stopped the GEJ privatization program from saying "customers should be able to buy meters from any certified distributors", but whether out of malice or ignorance, they chose not to impose such a requirement. This is something the current administration is now trying to change, with Osinbajo announcing today a new policy along the lines I just discussed.

Finally, you can say that the current infrastructure is "wasteful" or what have you, but that still doesn't change the economic arguments I've made. Just because you personally think the GENCOs and DISCOs can magically cut "waste" and attain profitability doesn't mean things will be seen in the same light by the bond buyers, common stock purchasers and international banks these companies must raise funds from. What these funding sources will care about is how Nigeria's power companies charge in artificially "strong" Naira but must pay their debts in US Dollars, how the prices they charge customers are extremely low by international standards even at the sham "official" Naira/USD rate, and how so many Nigerians (like you yourself) feel entitled to not pay more realistic rates until power companies which are teetering on the edge of bankruptcy are able to magically raise billions of USD to fund 24/7 reliable infrastructure. Do you see the likes of the NYSE, the LIBOR market or Chase Manhattan buying that sort of investment story?

TLDR: I understand why you hate how things are, but there is simply no chance of you ever enjoying reliable year-round power until companies are free to charge enough to draw huge amounts of private investment into the sector. Wanting things to work the other way round won't budge foreign investors one bit, no matter how much you might wish otherwise.

You cannot increase the price of a commodity beyond the purchasing power of those who would actually buy, use or consume it. When the naira went into a freefall several months ago, because some economists advised that it should be left to market forces to determine its' so-called 'realistic' value, what happened to the Nigerian economy? Why did govt have to intervene?

Why hasn't the price of fuel been left to fluctuate according to the US dollar value? Why does govt always have to intervene either through subsidy implementation or some other means? Because there would be chaos.

Ok, let us assume the govt agrees to your suggestion and electricity tariff is raised in tandem with the exchange rate, where do you think consumers would get the money to pay such exorbitant rates? I do hope the govt and private sector would automatically increase wages by the same proportion and pay the workers such rates, promptly too. And will electricity supply automatically become 100% better once such tariffs are allowed to rise to match the value of the dollar?

baralatie:
you no do coal power generation again?

Are u asking me? Did you miss story I posted about South African company that wants to invest in Enegu?

laudate:


You cannot increase the price of a commodity beyond the purchasing power of those who would actually buy, use or consume it.

I'm sorry, but this is pure, unalduterated nonsense. Stop confusing what you want with what is true, which is that you cannot lower the price of any good or service beyond what it costs to generate: nobody goes into business to sell at a loss. In fact, it is even worse than that: you cannot draw investment for any business which will have a return on investment less than parking the same money in US Treasury Bonds, and this is costing more and more as US interest rates continue their rise.

When the naira went into a freefall several months ago, because some economists advised that it should be left to market forces to determine its' so-called 'realistic' value, what happened to the Nigerian economy? Why did govt have to intervene?

Because Buhari is an economic illiterate, and Emefiele is a cowardly time-server who would rather obey the nonsensical demands of Buhari than exercise the independence he is guaranteed under Nigerian law. Why else do you think Nigeria has suffered its first recession in 25 years if not for this idiotic currency policy? Claiming there's anything good about it only shows you lack understanding of basic macroeconomics.

Why hasn't the price of fuel been left to fluctuate according to the US dollar value? Why does govt always have to intervene either through subsidy implementation or some other means? Because there would be chaos.

No, the answer is because of economic illiteracy mixed with political cowardice. Have you so completely forgotten what happened when Buhari initially refused to allow any adjustment in petrol prices whatsoever? There were Venezuela-style shortages and queues everywhere, just as standard economic theory would predict.

Ok, let us assume the govt agrees to your suggestion and electricity tariff is raised in tandem with the exchange rate, where do you think consumers would get the money to pay such exorbitant rates? And will electricity supply automatically become 100% better once such tariffs are allowed to rise to match the value of the dollar?

Again, this is you simply allowing your desires to interfere with your understanding of basic business facts. What good does it do any GENCO or DISCO to provide power below cost? How exactly do you expect them to make up the difference? Do you think they are charity organizations or something? Unless you know of some wonderful new laws of business I've never heard of, the dilemma facing these companies remains the same: either they are allowed to recover their costs or they go broke, and the latter is what is currently happening.

Frankly, your line of argumentation makes no sense at all, as you would realize if you made it for any other argument. How much sense do you think it would make if I said, for example, that BMW and Mercedes should charge no more for their cars than the average Nigerian can afford? There is no such thing as a "right" to unsustainably cheap power, and this misguided entitlement mentality you share with most other Nigerians is precisely the reason why Nigeria's power sector is so dysfunctional.

omohayek:
I'm sorry, but this is pure, unalduterated nonsense. Stop confusing what you want with what is true, which is that you cannot lower the price of any good or service beyond what it costs to generate: nobody goes into business to sell at a loss. In fact, it is even worse than that: you cannot draw investment for any business which will have a return on investment less than parking the same money in US Treasury Bonds, and this is costing more and more as US interest rates continue their rise.

Because Buhari is an economic illiterate, and Emefiele is a cowardly time-server who would rather obey the nonsensical demands of Buhari than exercise the independence he is guaranteed under Nigerian law. Why else do you think Nigeria has suffered its first recession in 25 years if not for this idiotic currency policy? Claiming there's anything good about it only shows you lack understanding of basic macroeconomics.

No, the answer is because of economic illiteracy mixed with political cowardice. Have you so completely forgotten what happened when Buhari initially refused to allow any adjustment in petrol prices whatsoever? There were Venezuela-style shortages and queues everywhere, just as standard economic theory would predict.

Again, this is you simply allowing your desires to interfere with your understanding of basic business facts. What good does it do any GENCO or DISCO to provide power below cost? How exactly do you expect them to make up the difference? Do you think they are charity organizations or something? Unless you know of some wonderful new laws of business I've never heard of, the dilemma facing these companies remains the same: either they are allowed to recover their costs or they go broke, and the latter is what is currently happening.

Frankly, your line of argumentation makes no sense at all, as you would realize if you made it for any other argument. How much sense do you think it would make if I said, for example, that BMW and Mercedes should charge no more for their cars than the average Nigerian can afford? There is no such thing as a "right" to unsustainably cheap power, and this misguided entitlement mentality you share with most other Nigerians is precisely the reason why Nigeria's power sector is so dysfunctional.

My desires are not interfering with anything. I am merely speaking about what I know, and what I have seen in action. You chaps feel that no matter the price increase placed on a commodity by a monopoly, the masses would not have a choice but to pay. Okay, go ahead then and convince the govt to increase the cost per kilowatt to match the exchange rate of the naira to the dollar. And let us see the result.

The truth is that the dollar will always continue to rise against the naira. So how often are you going to continue increasing the electricity rates to match these fluctuations? Why was subsidy policy formulated to cushion the effect of price increases in the cost of petrol?

The BMW and Mercedes analogy does not even fit into any part of this scenario. You speak as if electricity is a luxury item like a BMW car, which has a lot of other cheaper alternatives that people can choose from. You talk like an investment banker or a DISCO staff. Yes, I do not understand macroeconomics or whatever term you call it. But I live, work and run a business in Nigeria and I understand what it means when prices fluctuate. So please, I hope you convince the govt to increase the tariff. You and I would be here to witness the aftermath of such increases.

laudate:


My desires are not interfering with anything. I am merely speaking about what I know, and what I have seen in action. You chaps feel that no matter the price increase placed on a commodity by a monopoly, the masses would not have a choice but to pay. Okay, go ahead then and convince the govt to increase the cost per kilowatt to match the exchange rate of the naira to the dollar. And let us see the result.

The truth is that the dollar will always continue to rise against the naira. So how often are you going to continue increasing the electricity rates to match these fluctuations? Why was subsidy policy formulated to cushion the effect of price increases in the cost of petrol?

The BMW and Mercedes analogy does not even fit into any part of this scenario. You speak as if electricity is a luxury item like a BMW car, which has a lot of other cheaper alternatives that people can choose from. You talk like an investment banker or a DISCO staff. So please, I hope you convince the govt to increase the tariff. You and I would be here to witness the aftermath of such increases.

All I see here is sentimental pabulum. Please put aside all the empty verbiage and explain to me how you expect the power companies to draw billions of USD in new investment even while they aren't able to cover their present running costs. Tell us all how you expect them to recover what they pay for the equipment they import, the fuel they buy, the employees they hire, their insurance, their leasing costs, etc. Kindly lay out for us how they will convince international bondholders, pension funds and sovereign wealth funds that they should lay aside basic questions of profit and loss or ROI, just so they can give out their money for the GENCOs and DISCOs to act as loss-making charities on the behalf of you and other Nigerians who feel entitled to cheap power.

Anybody can spit out tons of empty words about "waste", "luxuries" or other heart-tugging, emotional terms that appeal to unreasoned sentiment. Until you give convincing, P&L based answers to the simple questions I've asked you, nothing else you have to say on this topic will be worth taking seriously.

Blue3k:


Are u asking me? Did you miss story I posted about South African company that wants to invest in Enegu?

no be China again?it is now s.a that is going solar and gas

omohayek:
All I see here is sentimental pabulum. Please put aside all the empty verbiage and explain to me how you expect the power companies to draw billions of USD in new investment even while they aren't able to cover their present running costs. Tell us all how you expect them to recover what they pay for the equipment they import, the fuel they buy, the employees they hire, their insurance, their leasing costs, etc. Kindly lay out for us how they will convince international bondholders, pension funds and sovereign wealth funds that they should lay aside basic questions of profit and loss or ROI, just so they can give out their money for the GENCOs and DISCOs to act as loss-making charities on the behalf of you and other Nigerians who feel entitled to cheap power.

Anybody can spit out tons of empty words about "waste", "luxuries" or other heart-tugging, emotional terms that appeal to unreasoned sentiment. Until you give convincing, P&L based answers to the simple questions I've asked you, nothing else you have to say on this topic will be worth taking seriously.

Oga, I never invited you to take me seriously or not. When did I extend that invitation? That is your own prerogative. In the same way, I have the right to share my own observations about a subject freely, on a forum that is considered public domain. I have made my own observations, and you do not have to agree with them. The fact that you don't, does not render my viewpoint invalid. Call it 'sentimental' whatever, that is your own business.

The GENCOs, DISCOs etc., have never provided an open realistic template of what makes up their cost profile. They keep talking about some ephemeral figures plucked from thin air. Everyone knows the waste and losses that run unchecked through their system. All I know is that in an economy like Nigeria, increasing electricity tariff for unstable power supply to match the exchange rate of the US dollar, is a recipe for chaos. All the grammar in the world is not going to change that, no matter how unpalatable it sounds to the investment bankers of the West, and the Chase Manhattan financiers. End of story.

baralatie:

no be China again?it is now s.a that is going solar and gas

What point are you trying to make? There's coal projects going on in multiple places. Coal currently being used in country by dangote. China still using and building coal plants at slower pace. The still projects going on aswell all over world.

Blue3k:


What point are you trying to make? There's coal projects going on in multiple places. Coal currently being used in country by dangote. China still using and building coal plants at slower pace. The still projects going on aswell all over world.

I doubt you understand a what power system entails. The proposal is not as solid as it seem.

Desyner:
I doubt you understand a what power system entails. The proposal is not as solid as it seem.

I doubt you know what me and him are discussing either. What's wrong with her propsal to have better metering, decentralized grid and improved infrastructure? Give you critique if you have one.

omohayek and laudate.
Both of you have properly identified the key constraints facing the development of electricity in Nigeria. production of electricity is priced in USD and sales of electricity is in naira so electricity prices are not cost effective making the industry unattractive to investors and the Nigerian populace being too poor to afford to pay current prices not to talk about the true market price for electricity.

what you both fail at is stating the solution to our problem, MAKE THE NIGERIAN POPULACE RICHER. if the populace were richer, they would easily be able to pay for increased electricity prices. This is what MUST happen before Nigeria gets sufficient power. with the way our political class act, I would say Nigeria is not going to get stable electricity in the next 1 hundred years.

Governor Peter Obi in an interview ( https://www.nairaland.com/4073835/peter-obi-biafra-ipob-agitation ) stated that "In 1980, the GDP of China was $341billion. The GDP of Nigeria, your country was $143 billion. So, you can say that China was twice bigger than Nigeria. In terms of savings, Nigeria had in 1980 $10.5 billion and China had $10 billion. In terms of per capita, Nigeria was $870; China was $193. Today, China’s GDP is $12 trillion; thirty times bigger than ours. China’s savings that was $10 billion is now $3 trillion. Somebody you were four times better than before has moved miles ahead of you, that is our crisis today. That is why the agitation is ongoing. It’s a simple thing. It’s the economy.

I can go on and on and show you. South Korea’s savings alone was $3 billion when we had $10.5 billion. Today, they have $365 billion and we have $30 billion. I can go on and show you Indonesia, Thailand. Thailand was $5 billion when we had $10 billion. So, why don’t we take the right steps and do the right things? The cost of our governance is unacceptable."


The only times in my lifetime the naira appreciated against the USD was during Obasanjo's tenure and the beginning of Yaradua's tenure. Both men were able to make Nigerians richer by saving money in our foreign reserves enabling them to raise the value of the naira. Both men were also fortunate to rule at a time of rising Crude oil price.

Until our leaders become serious about managing our macroeconomy, Nigeria is going nowhere.

trillville:
omohayek and laudate.
Both of you have properly identified the key constraints facing the development of electricity in Nigeria. production of electricity is priced in USD and sales of electricity is in naira so electricity prices are not cost effective making the industry unattractive to investors and the Nigerian populace being too poor to afford to pay current prices not to talk about the true market price for electricity.

what you both fail at is stating the solution to our problem, MAKE THE NIGERIAN POPULACE RICHER. if the populace were richer, they would easily be able to pay for increased electricity prices. This is what MUST happen before Nigeria gets sufficient power. with the way our political class act, I would say Nigeria is not going to get stable electricity in the next 1 hundred years.

Governor Peter Obi in an interview ( https://www.nairaland.com/4073835/peter-obi-biafra-ipob-agitation ) stated that "In 1980, the GDP of China was $341billion. The GDP of Nigeria, your country was $143 billion. So, you can say that China was twice bigger than Nigeria. In terms of savings, Nigeria had in 1980 $10.5 billion and China had $10 billion. In terms of per capita, Nigeria was $870; China was $193. Today, China’s GDP is $12 trillion; thirty times bigger than ours. China’s savings that was $10 billion is now $3 trillion. Somebody you were four times better than before has moved miles ahead of you, that is our crisis today. That is why the agitation is ongoing. It’s a simple thing. It’s the economy.

I can go on and on and show you. South Korea’s savings alone was $3 billion when we had $10.5 billion. Today, they have $365 billion and we have $30 billion. I can go on and show you Indonesia, Thailand. Thailand was $5 billion when we had $10 billion. So, why don’t we take the right steps and do the right things? The cost of our governance is unacceptable."

The only times in my lifetime the naira appreciated against the USD was during Obasanjo's tenure and the beginning of Yaradua's tenure. Both men were able to make Nigerians richer by saving money in our foreign reserves enabling them to raise the value of the naira. Both men were also fortunate to rule at a time of rising Crude oil price.

Until our leaders become serious about managing our macroeconomy, Nigeria is going nowhere.

Thanks for sharing. This is very enlightening.

Blue3k:


I doubt you know what me and him are discussing either. What's wrong with her propsal to have better metering, decentralized grid and improved infrastructure? Give you critique if you have one.

Do you know what you stand to gain with a centralized grid? What we need is a centralized grid that prioritizes supply of power to states that generate them. Can every region re-electrify their communities and still generate powers even if we double our funding at this instance? Like I implied this is a paper proposal.
As for metering, you may want glance through my post about it. I support metering [prepaid]. Same thing for infrastructure. The problem is when people who barely grasp what grids are or what they are meant to achieve start talking. Fashola made empty noise about power in Lagos state cos he didn't understand the technicalities of grid. Today he is struggling with simple things like prepaid meter and transmission system. Just understand what a power grid entails and stop parading half baked proposals up and down the forum.

trillville:
omohayek and laudate.
Both of you have properly identified the key constraints facing the development of electricity in Nigeria. production of electricity is priced in USD and sales of electricity is in naira so electricity prices are not cost effective making the industry unattractive to investors and the Nigerian populace being too poor to afford to pay current prices not to talk about the true market price for electricity.

Oga Nigerians aren't too poor. They may be too stingy? Too Lazy in understanding, but poor is far from it. Can a people who spend 4-5 times the PHCN cost to generate their own power be too poor to pay PHCN rate with even 50% increase? Never.

Desyner:
Oga Nigerians aren't too. They may be too stingy? Too Lazy in understanding but poor is far from it. Can a people who spend 4-5 times the PHCN cost to generate their own power be too poor? Never.

You are talking about lagos, abuja, port harcourt and kaduna. What percent of people in other regions can afford to use generators to rub their businesses.

omohayek:

I'm sorry, but this is pure, unalduterated nonsense. Stop confusing what you want with what is true, which is that you cannot lower the price of any good or service beyond what it costs to generate: nobody goes into business to sell at a loss. In fact, it is even worse than that: you cannot draw investment for any business which will have a return on investment less than parking the same money in US Treasury Bonds, and this is costing more and more as US interest rates continue their rise.


Because Buhari is an economic illiterate, and Emefiele is a cowardly time-server who would rather obey the nonsensical demands of Buhari than exercise the independence he is guaranteed under Nigerian law. Why else do you think Nigeria has suffered its first recession in 25 years if not for this idiotic currency policy? Claiming there's anything good about it only shows you lack understanding of basic macroeconomics.


No, the answer is because of economic illiteracy mixed with political cowardice. Have you so completely forgotten what happened when Buhari initially refused to allow any adjustment in petrol prices whatsoever? There were Venezuela-style shortages and queues everywhere, just as standard economic theory would predict.


Again, this is you simply allowing your desires to interfere with your understanding of basic business facts. What good does it do any GENCO or DISCO to provide power below cost? How exactly do you expect them to make up the difference? Do you think they are charity organizations or something? Unless you know of some wonderful new laws of business I've never heard of, the dilemma facing these companies remains the same: either they are allowed to recover their costs or they go broke, and the latter is what is currently happening.

Frankly, your line of argumentation makes no sense at all, as you would realize if you made it for any other argument. How much sense do you think it would make if I said, for example, that BMW and Mercedes should charge no more for their cars than the average Nigerian can afford? There is no such thing as a "right" to unsustainably cheap power, and this misguided entitlement mentality you share with most other Nigerians is precisely the reason why Nigeria's power sector is so dysfunctional.

You know not what you are talking. Nigerians are expert at inflating running cost and price fixing. The power system I insist is already hugely profitable. How much was govt subsidizing the power sector/lossing before privatization? Juxtapose those figures against what the private owners are claiming and see the huge fraud going on. And lastly, please and please and please stop using everyday business principle to analyse power.

trillville:

You are talking about lagos, abuja, port harcourt and kaduna. What percent of people in other regions can afford to use generators to rub their businesses.

You mean in the smaller communities there are no such case. Haba. Lets be realistic bros.

Desyner:
You mean in the smaller communities there are no such case. Haba. Lets be realistic bros.

D
I didn't say people are not using generators. I asked what percent of people are using generators. If I were to guess, I would say 30 percent of lagosians can afford to use generators for 16 hours everyday. What percent of people do you think can afford this in Kogi?

trillville:

D
I didn't say people are not using generators. I asked what percent of people are using generators. If I were to guess, I would say 30 percent of lagosians can afford to use generators for 16 hours everyday. What percent of people do you think can afford this in Kogi?

You are even talking about Kogi. What about areas outside the capitals in places like Kwara, Osun, Taraba, Kebbi, Ebonyi etc.? Once you step outside the state capitals, and take a trip down to other local govt areas, you would be amazed at the level of poverty and lack of infrastructure that dot those places. How many of the residents in such places can afford or even use generators? The few who even do so, might rent an I-better-pass-my-neighbour genset and limit their usage to 2 or 3 times per week, for less than 4 hours per day.

People should stop using Lagos, Port-Harcourt, Abuja, Onitsha, Ibadan as a yardstick to gauge the state of affairs in every other part of Nigeria.

Desyner:
Oga Nigerians aren't too poor. They may be too stingy? Too Lazy in understanding, but poor is far from it. Can a people who spend 4-5 times the PHCN cost to generate their own power be too poor to pay PHCN rate with even 50% increase? Never.

Let me guess, you conducted a census across the length and breadth of Nigeria, to ascertain the proportion of rich Nigerians vs poor Nigerians and to determine the exact numbers of Nigerians that can afford to own and run a generator before you arrived at this submission?

laudate:


Let me guess, you conducted a census across the length and breadth of Nigeria, to ascertain the proportion of rich Nigerians vs poor Nigerians and to determine the exact numbers of Nigerians that can afford to own and run a generator before you arrived at this submission?

Ha ha ha . . . dumb guess.
You tell me whether all the generator salemen, gen repairers and 4 liters gallon in rural areas are part of nollywood movie. Dumb statement.
Or all the businessmen (printing press) who bypass electricity in urban areas don't have generator. Maybe you expect communities yet to be electrified to have lots of gen owners.