Tinubu: Federal government must exit failing power sector

Nigerian presidential candidate Bola Tinubu says he will launch a review into the federal government’s role in the defective power system, which has collapsed multiple times this year, if he is elected in February.

Speaking at Chatham House in London, the former Lagos State governor, who is running as the presidential candidate of the ruling All Progressives Congress as successor to incumbent President Muhammadu Buhari, said that a centralised approach had failed and that the government should play less of a role in price fixing, operation and regulation in the energy sector.

“Fixing the problem by a review of energy supply is another priority. There’s no version of the world where Nigeria’s ambition can be achieved without solving the problem of how to provide energy to homes and businesses across the country.”

“It is time to recognise that the centralised approach to energy policy infrastructure is not an optimal arrangement and it is not likely to improve by mere tinkering around the sides. The federal government as regulator and operator and price fixer is a broken model. We will ensure to fix this.”

A defective grid

Nigeria’s national electricity grid has collapsed at least four times this year and some 100 times over the last decade, leaving large parts of the country without power. Regular power cuts can last for hours, days or even months, while millions of people have no access to any electricity at all and often rely on expensive diesel generators to power homes and businesses.

The government has blamed the blackouts on faulty infrastructure, acts of vandalism against oil installations and disruptions to gas and water supply to power plants across the country. Strikes at the Transmission Company of Nigeria have also contributed to the failures. 

The grid comprises a network of private generation and distribution companies and the state-owned Transmission Company of Nigeria. While private companies are allowed to generate and distribute electricity, the Federal Government of Nigeria is solely responsible for transmission of electricity generated by the generating companies to the distribution companies. Nigeria’s on-grid electricity demand is about 4-12 times the total electricity distributed on the grid, according to research by Nnaemeka Vincent Emodi, research fellow at The University of Queensland, Australia, and Ogheneruona Diemuodeke, senior lecturer at the University of Port Harcourt, Nigeria. 

Nigeria’s electricity generation mix is made up mostly of gas combined cycle plants and gas open cycle plants. The researchers say that there is a shortage of gas supply to power thermal gas plants due to gas pipeline vandals and supply chain issues, and renewables uptake has been limited. Tinubu said that his government would work to “accelerate investment in gas production” in a bid to enhance “domestic and global energy security.” 

Tinubu’s mooted reforms could weaken the traditionally assertive role of the federal government in the system, although he did not specify whether the federal government’s role should be assumed by state governments or the private sector. The lack of success of some of the private companies that have entered the system in recent years has been questioned.

Elected representatives have already advocated devolving the power to generate, transmit and distribute their own power to the country’s 36 states. A draft bill passed by both houses of the national legislature in March sought to amend the constitution to allow this, although proactive government support could rapidly accelerate the process.

State governors argued in a joint position paper to lawmakers that the current provisions of the amendment don’t go far enough in recognising federal and state governments as equal stakeholders in managing the country’s electricity supply.

“The federal government-controlled and regulated national electricity market today is insolvent, bankrupt and delivers no more than enough to power two 10-watt bulbs a day,” they argued.

In July, the Electricity Bill 2022 was passed into law, which a senator said would allow states to license power plants, mini-grids and private investment into generation and distribution.

The 70-year old Tinubu, who directed most questions about his plans to his party colleagues, insisted that running as the candidate of the ruling party will not prevent him from advocating change to the status quo, and pointed to his role as Lagos State governor from 1999 to 2007.   

“There’s no line in the constitution that says a current administration cannot continue in some of their ways – it doesn’t remove me from adaptation to my own economic philosophy and developmental programme…I’ve encouraged private investment in Lagos more than any other part of the country. Ambition, courage and can-do attitude is a given”.