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NERC Should Urge DisCos To Catch Up With Some African Countries In Provision Of Reliable And Accessible Electricity, Please!

Feature Article NERC Should Urge DisCos To Catch Up With Some African Countries In Provision Of Reliable And Accessible Electricity, Please!
TUE, 09 APR 2024 LISTEN

The question, “Is Darkness For Sale?” which incidentally is what not a few Nigerians are asking, sums up the bewilderment of many electricity consumers over the recent approval of a 300% increase in the electricity tariff for Band A consumers by the Nigerian Electricity Regulatory Commission (NERC) to ensure sustainable energy distribution. Accordingly, power distribution companies, DisCos, will be allowed to raise electricity prices for urban consumers to N225 ($0.15) per kilowatt-hour from N68 this month, effective April 1, 2024.

Unfortunately, a casual appraisal of the services being rendered by the 11 power distribution companies (DisCos) across the six geo-political zones of the country would reveal that NERC does not have any iota of justification to give DisCos the power to increase electricity tariff.

In my personal view, NERC, as a regulatory body in Nigeria’s power sector ought to have compelled the 11 DisCos to adopt a compensatory policy aimed at offering free services to its customers that are credit worthy. This kind of policy would be similar to what is done in the telecommunication industry. Telecommunication companies are wont to compensate their subscribers with free airtime whenever it is observed that their services are not satisfactorily delivered. What stops NERC, by virtue of its regulatory power from urging the 11 DisCos to do so to its customers? Is it because the Nigerian Electricity market is oligopolistic? Let me quickly opine at this juncture that the 11 DisCos are both individually and collectively still light years away from satisfying their customers through the application of modern day Customer Service Management.

For the sake of clarity, the term “oligopoly” refers to an industry where there are only a small number of firms operating. In an oligopoly, no single firm enjoys a large amount of market power. Thus, no single firm is able to raise its prices above the price that would exist under a perfect competition scenario.

Amid the shocking news that a 300% increase in the electricity tariff for Band A consumers in Nigeria’s power sector has been approved by NERC, not a few consumers of electricity across the country are questioning the rationale behind the increase as they unanimously argued that the quality of services been rendered by the 11 DisCos, respectively, ought to be improved before imposing an unrealistic tariff regime on its “choiceless” consumers. They added by asking whether NERC is expecting electricity consumers to be paying for darkness. The question made sense. In my personal view, once the 11 DisCos are not distributing light to their customers as they ought to, it therefore means that they are distributing darkness. Argued from the foregoing backdrop, it becomes expedient to ask, “Is darkness for sale?” We all know that darkness cannot be offered for sale because it has no value and does not satisfy needs since nobody needs it. Then why is NERC, as a regulatory body that ought to be protecting electricity consumers be giving DisCos the opportunity to sell darkness to Nigerians in the guise of increasing electricity tariff?

Moreso, the collective performance of the 11 DisCos falls below the expectations of millions of Nigerians if the promises made during the last presidential campaign of President Bola Ahmed Tinubu is anything to go by. When I watched and read his lips during the campaign period I was expecting the performance of the DisCos by now to equal what is obtainable in several African countries that have made significant strides in electricity supplies to their citizens, who are virtually consumers.

Against the foregoing backdrop, it is expedient to explore some of the frontrunners in Africa in terms of quality electricity supplies as compared to Nigeria.

Egypt, for instance, is achieving a remarkable 100% national electricity access rate for both rural and urban populations. As gathered, Egypt sources its electricity mainly from hydropower and thermal power stations. The country is also advancing as a leader in the renewable energy sector and has plans to export surplus electricity through interconnections to Europe, the Middle East, and sub-Saharan Africa.

In a similar vein, Morocco, like Egypt, boasts of a 100% electricity access rate for both rural and urban areas. Located in North Africa, Morocco is a high-potential renewable energy market, particularly in solar energy. The country aims to increase the share of renewables in its energy mix to 52% for wind and solar by 2030.

Just like other African countries that are doing well in terms of electricity supplies to their citizens, Tunisia is reputed to be covering all its domestic consumption needs, Tunisia achieves 100% national electricity access. The country predominantly generates electricity from natural gas and is committed to long-term investments in renewable energy, targeting a 30% share of renewables by 2023.

Still in the same similar nexus is Algeria with a 99.8% national electricity access rate, Algeria ranks among the top electrified countries in Africa. Natural gas accounts for 96% of its installed capacity, with the remaining 4% sourced from a combination of oil, solar, hydropower, and wind.

Within the ranks of countries that are doing well or better in terms of electricity supplies is Gabon, which is noted to boasts of an electricity access rate of 91.6%. While rural areas have lower access of 27.8%, the urban population enjoys a higher rate 98.6%. The country aims to introduce a sustainable energy mix, including biomass, natural gas, and hydropower, to improve access across the rural population.

Also in the same league of successful countries in the area of electricity supply is Ghana. As gathered, its electricity mix includes hydropower, thermal energy, and gas. Currently, it has a national electricity access rate of 85.9%, with 74% access in rural areas and 94% in urban zones. The country has promising prospects for better balancing its electricity sources. Thanks to significant natural gas reserves and various renewable resources.

Given the foregoing shining examples been shone by these countries, it will not be mistaken in this context to opine that they have made commendable efforts to provide reliable and accessible electricity to their citizens, contributing to socioeconomic growth and industrialization across the continent.

Against the foregoing backdrop, it is expedient to urge NERC to give the 11 DisCos a marching order that would enable them catch up with other African countries mentioned in this context as it is very obvious that Nigeria is lagging behind in terms of provision of reliable electricity to its citizens.

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