Nigerians paid more for less power in Q1 2023 — Report
According to the latest Electricity report from the National Bureau of Statistics (NBS), Nigerians paid more for less electricity during the first quarter (January to March) of 2023.
In this period, distribution companies (DisCos) generated revenue of N247.33 billion while delivering 5,852 gigawatt hours (GWh) of electricity.
Comparatively, in the corresponding first quarter of 2022, DisCos generated revenue of N204.74 billion while delivering 5,956 Gwh of electricity.
Despite delivering less electricity in the first quarter of 2023, DisCos earned higher revenue than they did in the same period of 2022.
This indicates that Nigerians paid more for electricity in the highlighted period, even though the supply was lower than what was delivered in the first quarter of 2022 when DisCos earned less revenue.
According to the NBS Electricity report, electricity supply in the first quarter of 2023 was 5,852 Gwh, representing a decline of 1.74 per ent compared to the 5,956 Gwh reported in the first quarter of 2023.
It is important to note that Nigeria has experienced a decline in electricity supply since the last quarter of 2022, which can be attributed to several factors.
These factors include the vandalisation of electricity transmission and distribution infrastructure, ageing infrastructure, a deficit in gas supply, and flooding.
These challenges have resulted in reduced efficiency in both transmission and distribution.
Inadequate natural gas supply, mounting debts within the power value chain, and deteriorating power infrastructure have been identified as key reasons for the current state of affairs.
President Bola Ahmed Tinubu recently signed the 2023 Electricity Act into law, marking a significant development.
The new law brings about the de-monopolisation of Nigeria’s electricity sector, including generation, transmission, and distribution, at the national level.
It grants the authority to states, companies, and individuals to generate, transmit, and distribute electricity.
The law also enables all states to issue licenses to private investors, allowing them to operate mini-grids and power plants within their respective states.
However, it restricts interstate and transnational electricity distribution.
The implementation of the 2023 Electricity Act has the potential to make a positive impact on the approximately 86 million Nigerians who currently lack access to electricity.
Each state will develop its electricity market based on active competition. This competition, facilitated by increased investments, will provide customers with the option to either remain connected to the national grid or choose a state-licensed grid operator.
Overall, the signing of the 2023 Electricity Act represents a significant step towards diversifying and expanding Nigeria’s electricity sector, to improve access to electricity and foster healthy competition among market participants.
In May 2023, before the end of the Muhammadu Buhari administration, the FGN Power Company, as part of the Presidential Power Initiative, announced that phase one of the Siemens Energy project, which aims to increase Nigeria’s electricity transmission and distribution capacity, was 80 per cent complete.
