NERC And Nigeria’s Energy Needs

Deregulation is a restructuring of the rules and economic incentives that government set up to control and drive a given industry. Basically, the need for deregulation arises when people become dissatisfied with the existing structure or rules. Deregulation therefore, should serve to provide customers or consumers with the choice of suppliers who are either retailers or traders by allowing competition.
No doubt, barriers are generally lowered for entry into industries where deregulation is evoked. This assists with improving innovation, entrepreneurship, competition and efficiency.All these lead to lower prices for consumers and improved quality.
Deregulation also lowers transaction costs and stimulates market activity. Leads to new and innovative products being offered.
Advocates of deregulation are spurred by the impression that competition in the industry would benefit consumers, and that lowering product prices gives them more choices and increases customer awareness. They, therefore, expect that deregulation will not only increase productivity and innovation, but should also provide better services, etc.
This is not far from the belief that wherever there is private participation, all things being equal, there is more efficiency, especially where it has to do with simple efficient management, which the private sector does not lack.
Against this backdrop, nigerians identified deregulation of the power sector as one of the major means of injecting life into the supposed already ailing sector. They considered this option appropriate because it would help in attracting investors and new investments into Nigeria’s power sector.
Experts argued that it will also improve the economic base of the nation while ensuring a synergy between the consumers and producers, adding that this will result in a win-win solution and translate into profit for all.
.According to them, power deregulation will not only provide the Nigerians with uninterrupted and quality electricity, but would also attract Foreign Direct Investment, (FDI), create employment and business opportunities, enhance the living standards of workers and ultimately change Nigeria’s socio-economic landscape, beyond what was witnessed in the telecommunications sector after it was liberalised.
This idea made the former Minister of Power, Prof. Bart Nnaji, to argue that deregulation will fast track development and snowball into better management of the power sector, which would translate to the generation of adequate electricity for residents and other end-users in the country.
Thus on September 30, 2013 , following the privatization process initiated by the Goodluck Jonathan regime, Power Holding Company of Nigeria (PHCN) ceased to exist.
For the generality of Nigerians, what was key was a sustained quality power service delivery. Unfortunately, six years down the line, power supply has continued to worsen and no major stride had been recorded in the sector.
Many Nigerians are at a loss as to why it is still a mirage to have constant power supply despite the many bailout funds and much-touted investments into the sector by partners within the last six years, such as the World Bank, Power Africa, the USAID-funded energy initiative and Japan’s JICA.
Surprisingly, the Minister of Power, Works and Housing, Mr. Babatunde Fashola’s seeming ambiguous explanation that “the reason why our industry is not delivering has to do more with the economics of energy, the politics of energy, the legality of an industry where multiple private and public companies are interacting through contracts”, compounds my worries rather than proffer solutions.
Does his claim of “Nigeria not having displayed the zeal required to build an economy beyond oil”, suggest an expression of a government bereft of ideas of how to fix the system? This is baffling as it is disappointing.
If six years after, the required energy supply to light a lamp and facilitate household activities is yet to be achieved, one wonders what hope is there for the energy needs of the industrial sector?
I think that the proposed Power Sector Roadmap which included a long term plan of 2015 to 2020, for an increased diversification into renewable energy that will include small and medium hydropower, solar, bio-waste to energy, coal and a host of others to tackle power supply problem in Nigeria, will remain a mirage if the electricity generating and distributing capacity of the nation is not raised to a wattage reasonable enough to meet the energy needs of the over 150 million population of the country.
 

Sylvia ThankGod-Amadi