New electricity tariffs begin July amid massive infrastructural deficit in energy sector

* How COVID-19 has affected consumers’ purchasing power ─Engr. Sale Mamman

* Admits capital investment largely dependent on donor funding, loans

Emmanuel Akosile | ConsumerConnect

Citing obvious lack of central coordination and immense infrastructural shortage as the bane of any sustainable improvement in the beleaguered power sector, responsible for the problem, the Federal Government of Nigeria has informed the Senate that the new increment in electricity tariffs would commence July 2020.

Sources said Engr. Sale Mamman, Honourable Minister for Power, Tuesday, July 16 disclosed to the Committee on Power in the Upper Legislative Chamber of the National Assembly (NASS), that the core problem responsible for the irregular power generation and distribution in the electricity value chain is lack of central coordination in the all-important sector of the nation’s economy.

Engr. Mamman, during his appearance before the Senate Investigative Hearing on Power Sector Recovery Plan said that the impact of the novel Coronavirus (COVID-19) has aggravated the problem in the sector.

The Minister stated that massive infrastructural deficit currently hampering the electricity value chain is responsible for the glaring failure of the sector to achieve set objectives.

The Senate Committee on Power is carrying out an investigation with a view to identifying the reasons for efficiency and under-performance regarding the wobbly electricity supply in the power sector despite the huge financial interventions by the Federal Government in years.

Mamman stated that the power sector also is struggling with the challenge of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, increase energy access and completion of legacy projects.

“Note that the teething issues as well as the legacy issues affecting the power sector are primarily issues of infrastructural deficit and lack of coordination in the sector,” said he.

The Minister for Power further informed the Committee that the outbreak of the Coronavirus pandemic in the country has affected the purchasing power of electricity consumers and demand for electricity in general.

According to him, a lot of capital investment in the sector is yet dependent on donor funding, loans and budgetary allocations, just as he has however assured that the Challenges in the Power Sector would soon fade into relative insignificance.

He said: “The COVID-19 pandemic has had a great economic impact, not just on the health Sector, but the overall economy of the country.

“Indeed, the prevalence of the pandemic has already reduced productivity due to the strategy adopted globally to contain it.

“This by default affects the purchasing power of consumers and the demand for electricity in general.

“The current situation in the Nigerian Power Sector is that in which a lot of capital investment is being made, most of which is dependent on donor funding, loans and budgetary allocation.

“For projects that we have already secured their funding, we do not expect any adverse effect.”

He, however, told the Senate Committee on Power that in regard to the government’s counterpart funding in the face of dwindling national revenue, “we are proactively seeking strategies that will enable us anticipate the impact and plan for it so as to enable us deliver within the projected timelines.

He added: “The impact of the COVID-19 pandemic has also affected our laid-out plan for the repositioning of the electricity market towards financial sustainability under the Power Sector Recovery Programme (PSRP).

“We believe solving two challenges alone would not only redress these challenges, but will also unlock the Sector for investment, efficiency and service delivery, bringing affordable and stable power to the nation.

“It is thus fortuitous that President Muhammadu Buhari has championed the Siemens Electrification Plan under the Presidential Power Initiative, as the central theme of the Government’s strategy in the Sector.

“I believe that all efforts rendered by the many relevant stakeholders within the stakeholders should be aligned with the PPI for maximum effectiveness in implementation.

“It is really our only choice to once and for all resolve the longstanding issue of the power sector.”