Nigeria’s power sector stakeholders have identified various challenges bedeviling the sector declaring that changing the ownership of DisCos will not solve any problem.
Rather, they posited that only the injection of funds tied to specific deliverables will move the sector forward.
Over 300 stakeholders in the sector recently gathered in Abuja for the maiden edition of the Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders’ Roundtable (NMPSR).
The stakeholders in a communique jointly signed by Prof Stephen Ogaji, and Mr. Bode Fadipe, Chairman and Secretary of the Central Planning Committee for the roundtable respectively, asked for the injection of Pension funds of about N17 trillion into the sector for infrastructure development.
“Government interventions demonstrate a failed system and continued interventions will solve nothing but result in increased fiscal deficit. Changing ownership of DisCos will not solve any problems and only the injection of funds tied to specific deliverables will move this sector forward.
“The power sector in Nigeria requires stronger institutions and more effective and independent regulations to address issues such as market competition, contract enforcement, and investor confidence.
“The power sector requires longer-term and lower-interest capital in domestic currency. Pension funds of about N17trn should not just be for government bonds but should be made available for infrastructure development with risk mitigation measures in place.
“The federal government should provide incentives to encourage local and foreign investment in power infrastructure to improve generation, transmission, and distribution capabilities,” they said.
The stakeholders also said the Multi-Year Tariff Order (MYTO) is outdated after over 10 years and asked NERC to implement a fair and cost-reflective tariff structure that encourages investment.
“The current MYTO is outdated after over 10 years and needs a decoupling since enough sector data should have been gathered to improve the assumptions initially made. NERC should implement a fair and cost-reflective tariff structure that encourages investment, ensures revenue sufficiency, and incentivizes efficient energy consumption.
“Also, a cost-reflective tariff should be treated as an output, not an input. DISCOs should introduce energy efficiency programs and initiatives to encourage customers to adopt energy-saving practices and technologies.
DISCOs should expand the deployment of smart meters to improve billing accuracy, and revenue collection, and reduce electricity theft,” the stakeholders advised.
