This opinion piece is a follow-up on final week’s, titled “The Limitations of a Authorities-Dominated Energy Sector”. The restrictions talked about and mentioned included restricted monetary sources by the federal government, technical and managerial limitations, gradual response to local weather change and decarbonisation imperatives, uncompetitive and insular mindsets attributable to authorities possession, and implicit governance points. This text seems to be on the various penalties of presidency overwhelming possession and administration of key belongings of the ability sector. We’ve for many years glossed over the results of those penalties on the efficiency and progress of the ability sector as in the event that they didn’t matter. However they do, severely.
“Proper from political independence as much as November 2013, when the ability sector was partially privatised, the ability sector was absolutely within the arms of presidency officers and closely politically influenced.”
These penalties are as follows. First, politicisation of the ability sector: The very possession and management of the ability sector by the federal government for many years meant its politicisation. Based on Magnus Eminue, an power coverage analyst at Nextier, “political affect on the awarding and managing of energy sector contracts has undermined efforts to construct a dependable electrical energy provide. From the times of the Nationwide Electrical Energy Authority (NEPA) to the post-privatisation period, political issues have continued to dictate contract allocations, coverage choices, and challenge execution.” Proper from political independence as much as November 2013, when the ability sector was partially privatised, the ability sector was absolutely within the arms of presidency officers and closely politically influenced. This was additionally very evident below the extended years of navy rule when NEPA undertakings (present-day distribution corporations (DisCos)) turned main money cows of the navy regime. “The roots of political involvement in Nigeria’s energy sector date again to the Seventies, when NEPA monopolised electrical energy companies. Successive administrations maintained a decent grip on the trade, utilizing it as a device for political leverage. As electrical energy demand surged through the Nineteen Nineties and early 2000s, vested political pursuits repeatedly undermined the federal government’s efforts to enhance technology and distribution.” Eminue identified that these pursuits typically inflated challenge prices and hindered reforms to professionalise the sector. Political consideration can also be behind the refusal of the Buhari presidency to resume Manitoba Hydro Worldwide’s contract to handle the Transmission Firm of Nigeria (TCN) that expired on July 31, 2016. And political intrigues and safety of vested pursuits are behind the makes an attempt to color the partial privatisation programme of the ability sector to date as a failed try. This isn’t an try to tarnish the picture and impugn the integrity of the present political, administrative and technocratic management of the ability sector however to courageously deal with well-known historic info in regards to the administration of our energy sector. These observations are corroborated by Mr Eyo Ekpo, Staff Chief at UKNIAF and former Commissioner, Market Competitors, NERC, in his Might 12, 2025, article in Enterprise Day, titled “Nationwide Built-in Electrical energy Coverage 2024 and Highway to Attaining Power Safety in Nigeria”. He talked about, amongst others, “…deliberate bureaucratic delays, weak accountability and M&E mechanisms and detached political help to drive the agency and sustained implementation of agreed reforms.”
Second is the weak and insufficient energy sector: with about 6,000 megawatts (MW) of electrical energy generated from fewer than 30 energy crops, transmission capability that may wheel solely about 8,000 MW and distribution capability that may carry solely about 6,000 MW, Nigeria, with a inhabitants of 230 million individuals, is serviced by a really insufficient and weak energy infrastructure. That is the direct results of a long time of presidency possession and administration and unwillingness to let go of the sector.
Third, poor efficiency and perennial energy crises: The Nigerian energy sector has traditionally suffered from poor investments, inadequate gasoline provide, and weak infrastructure, resulting in a long time of poor efficiency and power crises. The ability provide benchmark for industrialised economies is one MW of energy technology for a million individuals. However assuming half a megawatt or 500 kilowatts (kw) per a million individuals for our degree of improvement for 230 million individuals, that works out to 115,000 mw or roughly 100,000 mw, which corresponds to the quantity of power Prof. Barth Nnaji, former Minister of Energy and promoter of Geometrics Energy Aba, estimates to be Nigeria’s present energy wants. That is towards the present grid-transmitted energy of about 6000 MW. Thus, gross undersupply is on the root reason for Nigeria’s perennial energy disaster.
Fourth, de-industrialisation/closure of industries: Power crises have been a key issue for the closure of factories in Nigeria for many years however not the one purpose. Main examples embrace the closure of the Volkswagen (VW) meeting plant in 1989/1990 and Dunlop and Michelin tyre factories in 2007 and 2008, respectively. Deindustrialisation has been happening because the Nineteen Eighties, solely additional accentuated by the current international trade disaster which noticed the exit of main multinational manufacturing corporations. Nevertheless, the entry of main indigenous Nigerian producers like Dangote Industries and BUA within the final 20 years has revived the contribution of producing to the nation’s gross home product (GDP), declining first from 10 % of GDP in 1990 to six.5 % in 2010 and steadily rising to 13.56 % within the third quarter (Q3) of 2020. This exceptional efficiency was largely the results of self-generated energy by main producers somewhat than enchancment in energy provide.
Fifth, uncompetitiveness of Nigerian exporters and slender export base: Energy crises because of a weak and poorly performing energy sector, due largely to public sector possession and management, have led to the uncompetitiveness of Nigeria’s manufactured exports and exports usually. For instance, Nigeria for many years was not in a position to benefit from the Africa Development and Alternative Act (AGOA), a US authorities preferential commerce programme meant to encourage duty-free imports into the USA from African international locations. South Africa, Kenya, Madagascar, Lesotho, and Ghana dominated the non-oil AGOA exports, whereas Nigeria might solely export oil and gasoline.
Lastly, import dependency/dollarisation syndromes: Nigeria’s excessive value of native manufacturing, due basically to poor energy provide and the excessive value of self-generation, has led to an import-dependency syndrome and a desire for imported items, which has in itself strengthened the dollarisation syndrome because of a excessive demand for {dollars} to pay for our inordinate demand for imported items.
This has been an try to spotlight a number of the main penalties of the dominant public sector’s maintain on the ability sector. Admittedly, sentiments towards the complete privatisation of the ability sector throughout the general public sector and labour motion stay sturdy, both attributable to lack of ample information or vested pursuits, however the full privatisation of the ability sector is inevitable, and the sooner the higher and the less expensive.
Mr Igbinoba is Staff Lead/CEO at ProServe Choices Consulting, Lagos.
