Muhammadu Buhari's challenge to keep Nigeria's lights on



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Babatunde Fashola's office was buzzing like a lot of Nigerian workplaces, humming with diesel generator fires and clapping batteries when the power went out. The fact that he was Nigeria's energy minister was an irony that was not lost.

The fact that even the Ministry of Energy, Public Works and Housing can not guarantee a reliable supply of electricity from the national grid is the consequence of decades of underinvestment on the part of the government. State. For critics of the government, this is proof that President Muhammadu Buhari has not kept his promise to strengthen decrepit infrastructure in Nigeria.

The Buhari Administration says that it has done more than previous governments. Proponents and critics are poised to redouble their efforts to address the power shortages that make Nigeria one of the least electrified countries in the world and a drag on Africa's largest economy.

Mr. Fashola said his ministry followed the advice he gave to Nigerians when he left the network. "Let's hope that by the same year, all these buildings will be entirely solar," he said. The government is part of a plan to bypbad the moribund power sector through a "mbadive deployment of off-grid systems," with policies encouraging the private sector to do the same.

The ministry has also partnered with the private sector to electrify markets containing tens of thousands of family-run stores and has secured $ 550 million in funding from the African Development Bank and the World Bank. Electrification of rural areas.

Even critics agree that the government has good policies but that implementation has been slow. A potential World Bank loan of $ 1 billion to finance reforms is pending as it is linked to structural changes in the sector.

"The plan is good, on paper, but as always, [there’s been] implementation poor, "said Cheta Nwanze, partner of the consulting firm SBM Intelligence.

Nigeria has the capacity to produce 13,000 MW of electricity, compared with more than 50,000 MW for South Africa, which has a similar economy and a quarter of the population. But its aging network provides only about 4,000 MW of energy to its 200 million people, roughly what the city of Edinburgh provides to 500,000 people. The Nigerian network has collapsed at least six times this year, including two in May.

Diesel generators are the main mechanism for adaptation, not only of Nigerian ministries, but also of industrial areas, housing estates and retailers, releasing pollutants while costing more than twice the power provided by the national grid.

Muhammadu Buhari did not solve Nigeria's food problem during his first term © AP

The International Monetary Fund estimates that the Nigerian economy loses about $ 29 billion a year due to electricity supply problems. Ninety percent of the industry provides its own power. The Association of Nigerian Manufacturers stated that about 40% of the cost of production was supplied with electricity.

"Insufficient electricity supply is one of the biggest barriers to the competitiveness of the manufacturing sector," said Mansur Ahmed, director of Man.

Nigeria suffers from a lack of investment at all points of the energy chain. It does not have adequate pipeline infrastructure to transfer some of the world's largest natural gas reserves to power plants.

The distribution companies are so indebted and underpaid – to the tune of nearly $ 4 billion, depending on their professional badociation – that they do not invest in factories or meters that would allow them to collect from customers and improve collection rates of about 60 cent.

Mr Fashola said the Buhari administration was trying to improve the supply. It approved a payment of 27 billion naira ($ 75 million) to the 11 distribution companies for the unpaid electricity bills of the government, as well as 72 billion euros for equipment, as well as a payment guarantee of 701 billion naira for energy producers, among other measures.

"We are expanding the transmission network that was installed 40 years ago and serving five to six times its basic network," he said.

Tony Elumelu, one of Nigeria's richest men, announced this year his intention to invest $ 2.5 billion in energy. Her company Transcorp won a $ 293-million bid in May for a second power plant in which it plans to invest $ 190 million, doubling the company's capacity to approximately 2,000 MW.

"We can do a lot more – we just want the sector to be totally economically a free market," Elumelu said. "Nigeria is a huge market. If we can create the right environment, the capital will come to Nigeria. "

Since the privatization of the electricity sector by Nigeria in 2013, the price of electricity has not increased even though the naira has dropped by half against the dollar and that the price of electricity has not gone up. inflation has reached a double-digit rate. According to the Association of Nigerian Electricity Distributors, it is so weak that distributors are suffering huge losses.

"The law requires us to sell electricity at less than the cost price and every day, there is a shortfall that continues," said Sunday the spokesman of the professional group Sunday Oduntan Punch Newspapers.

Mr. Fashola rejected the distributors' complaints. If companies are unable to invest or grow, it should sell or be relieved of their licenses.

As part of its off-grid efforts, the government has adopted rules that would allow power companies to enter into agreements directly with large industrial groups.

But the pace of reform has been glacial and will not solve the larger problem, said Deepak Khilnani, managing director of Cummins Cogeneration, which produces more than 100 MW in its power plants in Nigeria.

"What they have tried to do is develop schemes or regulations to get around the situation," he said. "If your arteries get firmer with cholesterol, you can either try exercising and dieting or avoid bypbad surgery. . . but the problem with workarounds is that they are never as good as the original and you can only do a lot of them before the system collapses. "

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