Reliable electric power supply has remained an elusive mirage for millions of Nigerians, as well being a major factor underlying Nigeria’s economic woes. There is no prosperous nation, despite it’s natural endowments and strategic location on the globe, that is not backed by a robust power sector. Series of past Nigerian leaders appeared to champion national industrialisation. Apparently, they were not oblivious of the fact that industrialisation runs on the backbone of sufficient, steady, or predictable, electricity. Their past posturings notwithstanding, industrialisation has remained elusive while electricity for basic household uses remains a prayer point for most Nigerians, 62 years after colonial independence. According to reports, electricity power generation in Nigeria began in 1886 when two generating sets were installed to serve the then colony of Lagos while later in 1951, the Electricity Corporation of Nigeria (ECN) was established by an Act of Parliament. Shortly after Independence in 1962, the Niger Dams Authority (NDA) was established for the development of hydroelectric power.
Ten years later in 1972, both ECN and NDA were merged into the infamous the National Electric Power Authority, NEPA with the responsibility of generating, transmitting and distributing electricity across Nigeria. Similar to most post-independence government establishments, NEPA’s failures ranked those of the defunct NITEL and the Nigerian Airways. 32 years later, during the Olusegun Obasanjo – led civilian administration’s privatisation drives in 2004, NEPA was privatised into government-owned Power Holding Company of Nigeria (PHCN).  As if there was something ominous about the phrase ‘Power Holding’ in PHCN which still held the free flow of electricity, PHCN was quickly unbundled, following an Electric Power Sector Reform (EPSR) Act of March 2005, to enable private companies participate in electricity generation, transmission, and distribution, in a wave of reforms that also swept off poorly performing NITEL. The Act also created the Nigerian Electricity Regulatory Commission (NERC) as an independent regulator for the energy sector.
The PHCN was unbundled into eleven electricity Distribution Companies (DisCos), six Generating Companies (GenCos), and a Transmission Company (TCN). Unfortunately, while the federal government privatised the GenCos and DisCos, it retained ownership of the TCN which then stood as a stifling bottleneck to both the production and consumption ends in the electricity business, by ‘holding’ central monopoly as the sole receiver of all generated electricity from the GenCos and the sole suppler to the DisCos, whereas government should have been only a regulator via the NERC, or at most an equal competitor like MTEL in the telecoms sector. It is therefore noteworthy that its the participation of government via TCN in the electricity business processes that holds the flow of power. Is it not abnormal that the TCN which does not bear the business risks nor benefits of investing in electricity generation or distribution infrastructure, solely manages electricity transmission network in the country? What is the stake of the TCN, and what motivates its priorities?
It is no wonder the TCN has not done the much needed overhaul of its inherited, dilapidated transmission infrastructure. As the energy sector continues to slumber in Nigeria, it is imperative to compare Nigeria with its African peers. According to the US Energy Information Administration’s 1980 – 2021 energy survey, most populous African nation, Nigeria with a population of over 220 million ranks 5th in energy production capacity at 11.7 Gigawatts, behind much less populated South Africa at 63.28 Gigawatts, serving a 60.41 million population, followed closely by Egypt at 60.07 Gigawatts, serving 112.7 million persons, Algeria at 21.69 Gigawatts for 48.6 million persons, and Morocco at 14.26 Gigawatts which serves 37.84 million persons.Nigeria ranks far lower if the comparison is computed on energy per head basis, where Libya which produces 10.53 Gigawatts for a 6.9 million population supplies over 1500 watts per head, Nigeria in comparison, supplies a paltry 52.18 watts per head. This is even lower, considering the actual power consumed due to transmission inefficiency, and the epileptic, unpredictable nature of our supply, unlike in West African neighbour, Ghana, where though production capacity is low at 5.35 Gigawatts for 34.12 million, the supply schedule is dependable to the extent that companies now exit Nigeria for Ghana due to power epilepsy, whereas their major markets remain in Nigeria.
Ghana is turning the Economic Commission of West African States’ free trade treaty to its advantage. Local businesses relocating to Ghana, a neighbouring country with stable electricity and a more business friendly environment, can produce and ship to countries within the ECOWAS free trade zone.  In 2006, two of Nigeria’s leading tyre manufacturers, Michelin and Dunlop, relocated factories to Ghana citing epileptic energy supply in Nigeria as main reason. Other companies have since followed suit. The high unemployment rate, rapidly dwindling economy and a depreciating currency are some effects of these corporate decisions. South Africa and Botswana generate most of their electricity from coal to achieve more than 72 per cent universal electricity access in their respective countries, followed by Kenya and Senegal. Meanwhile Nigeria has rich coal and petroleum energy resources among others, that could be applied to boost its energy mix.
While the industrialised world has used fossil energy to hone their technologies to levels where universal electricity access through clean and renewable energy resources are now achievable, Nigeria would find it more difficult to use its fossils when global environmental conditions become critical, and may emerge as an old-fashioned polluter when, and IF, it does wake up. Considering that privatisation of the energy sector was a laudable reform, it emerged with a faulty structural constrictions posing as the TCN, which has knotted operators into a circle of vicious blame traders, whereas the much-needed commodity is kilowatt-hours. It is very obvious that the model of the reform structure that emerged in the telecoms sector would have been more appropriate as witnessed in the rapid transformations that followed the unbundling of NITEL, where government’s regulatory agency, the National Communications Commission, stood away from the daily operational processes of MTN, Econet, Glo and government-owned MTEL, enabling these operators to have end-to-end control of production, distribution and sales, as well as being able to solely pursue priorities that drive company objectives.
The manifesting benefits became outstanding, and transformational in proportions no one ever imagined. It is to the credit of Nigeria that these telecom companies, while competing to serve Nigerians, gained the enabling capacities that made them big international players. A vibrant energy company in Nigeria should have the enablement to independently plan its strategy, source its fuel, generate electricity, and distribute electricity directly to its consumers while NERC devises the appropriate energy metering modality and service ethics. It would be to the nation’s advantage if energy firms operate in a competitive environment by not allotting them exclusive coverage areas, a monopoly that breeds complacency. NERC should devise a means by which these firms run supply lines side by side in every part of Nigeria they have the capacity to operate. As every business is driven by profits and customer base, a company’s ability to control its business processes amidst competition, would enable it see the potentials that spur it towards innovations and expansion. Nigeria’s energy sector continues to slumber in the absence of total, private process control and free competition.

By: Joseph Nwankwo