According to the World Bank, the economic cost of power shortage in Nigeria is estimated at around $29 billion...........
!” about a dozen teenagers playing within the verandah of the three-storey building housing Bola Kareem’s shop screamed. Bola is not a teenager, but he joined in the cacophonous jubilation nevertheless. The 32-year-old embroiderer explained that the neighborhood’s electricity had just been restored after two weeks of blackout.
Mr Kareem’s experience is similar to that of Saheed, a cobbler based in Sango, Ogun State. In the first week of June, Saheed said he had to reject numerous offers in the middle of the Covid-19 lockdown because there was no electricity in his neighborhood. “It’s really crazy,” Bola said of the tariff, adding that the situation is more pathetic because he barely enjoys regular supply of electricity. “We only pay for estimated darkness. Power problem is a major reason why small and medium businesses don’t survive in Nigeria.”According to the World Bank, the economic cost of power shortages in Nigeria is estimated at around $29 billion. The figure is equivalent to two per cent of Nigeria’s Gross Domestic Product .
In its analysis of the economic factor intensity as a result of the shortfall of low electricity supply, PwC said that “approximately 1 out of every 7 firm” exits the Nigerian economy because of power concerns. Last month, as parts of efforts to improve the country’s power situation, the World Bank Board of Directors approved the Power Sector Recovery Operation of $750 million in International Development Association credit. The initiative is meant to improve the reliability of electricity supply, achieve financial and fiscal sustainability, and enhance accountability in the power sector in Nigeria.
In 2013, during the tenure of Goodluck Jonathan, a privatisation exercise took place with the mandate to increase power generation and provide stable supply of electricity to Nigerians at affordable cost. The PHCN was unbundled and broken into six generation companies and 11 distribution companies, handled by private investors, with the Nigerian government taking charge of the transmission.
Victoria, an office assistant at the shop, told PREMIUM TIMES that her boss made the decision after years of settling “crazy bills” without enjoying commensurate value in electricity supply. “We now spend an average of N30, 000 on fuel monthly,” she said. “This affects our balance sheet, but we have no option. Our shop employs over 10 boys but we now have six, due to high operation cost. But even at that, the amount is minimal compared to when we paid for estimated bills and still bought fuel of about N20, 000 monthly.”
Mr Ajaikaye said he requested pre-paid meter over a year ago, but his efforts have been frustrated as the metre is yet to be delivered. “So we pay huge amount to power our generating sets and still pay crazy amount per estimated billing. It’s double jeopardy,” he said. Nigeria’s unemployment rate stood at 23.1 percent of the work force in the third quarter of 2018, up from 18.1 percent in 2017, according to data from the Nigerian Bureau of Statistics.
“The Discos are only ready to promote estimated billing,” noted Akinbodunse Shadrack of the Utilities Consumers Rights Initiative of Nigeria, based in Ibadan. “NERC’s order on CAPPING of estimated billing failed from inception as the level of compliance is very poor and electricity consumers have not seen any effect of the order.”
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