Monday, October 18, 2010

Electricity: Nigerians spend 13 Billion USD a Year, What will the Nigerian government spend to solve it?

Dear Readers,

I think I'm getting back on the blogging track.

This morning I was reading Friday's "The Punch" newspaper.

The cover story was "Nigerians spend $13bn on generators annually"

For those of you who haven't been to Nigeria, it is a country of contradictions. You can have great roads or poor roads. You can have all the champagne you want, but your electricity (if you have it) turns off several times a day (and then you hear the rumble of a diesel gas generator).

According to the story above, Nigerians spend roughly 13 BILLION USD a year on diesel generators. Note that this number doesn't include how much they pay for their electric bills (whether or not they get electricity).

President Goodluck Jonathan, who has been publicly condemning the power problem (and reiterating his administration's determination to solve it), addressed international power sector investors at a presidential retreat last week.

The strange thing is that he also said "from 2011, the Federal Government would cease further investments in power generation in distribution."

So, perhaps I misunderstood something. If power is a priority, then why stop paying to solve it?

Now, I understand working with the private sector to try and stem corruption and mismanagement. I also understand splitting the costs (private public partnerships) with the private sector to try and improve things.

What I don't understand the Nigerian government not paying to solve its own problems.

What do you think? If you have better information on this, please let me know.


1 comment:

  1. Alena, the reason the electricity sector is in such a mess is unfortunately very poorly understood, particularly by journalists. If you believe government should continue spending money on the sector then you should cast your mind back to the days of telecoms before the liberalisation program began.

    If you want to understand more, just read the Roadmap ( To quote Onne Ruhl, World Bank Country Director: “This roadmap brings us to a point where we finally have a realistic plan that is actually technically and commercially sound… The question is, will all the partners behind it actually rally round it and implement it? If it gets implemented, it will deliver results.”

    Government will actually continue to invest in the transmission system (the grid)and the successor companies created following the unbundling of NEPA (now PHCN) will be privatised.

    None of this is new (the policy was approved in 2001 and the Power Sector Reform Act was passed in 2005) but our friends in govt have been too busy diverting monies earmarked for power. Given our political system, these leakages are unlikely to change. This is what makes Goodluck Jonathan's statement surprising and welcome. However, as Onne Ruhl says, will the roadmap be faithfully implemented?