Nigeria’s power sector: The way forward (part seven)

This is the seventh and final concluding article and the 28th in my series of articles on the power sector. The sixth, published last week, zeroed in on privatisation, which has been a recurring theme in my series on the power sector. This seventh and final concluding article considers an overarching strategy for the Nigerian power sector. The Nigerian power sector has been in crisis for over four to five decades. This is a period during which Nigeria experienced a number of military coups and prolonged years of military dictatorship, characterised by gross underinvestment in and underfunding and mismanagement of the power sector. The governance challenges associated with the power sector have been further accentuated, largely so, since the return to civilian rule. There are many dimensions to the power sector, indeed, so many moving parts: the electricity value chain (power generation, transmission, distribution, and utilities/retail outlets) and the energy mix, or combination of energy sources (in Nigeria’s case, fossil fuel, largely gas-fired turbines, and renewable energy – hydropower plants and solar). Then add to that the federal and state government regulatory institutions and related public sector organisations and the role of the Federal Ministry of Power. Two factors – government policy and governance – have had a critical, across-the-board effect on the fortunes of the Nigerian power sector for decades.

Read also: Nigeria’s power sector: The way forward (part one) 

The word ‘overarching’ means “comprehensive, all-embracing”. Nigeria needs a comprehensive, all-embracing power sector strategy to drive her economy into the 21st century, where we sit at the same table with the movers and shakers of the world economy and divide the spoils of global economic conquests with them or take a fair and satisfying share of global economic progress, rather than sit under the table scrambling for crumbs. The world is experiencing fast-paced technological progress literally at the speed of light. We are now in the era of breathtaking engineering and digital technology innovations driven by heavy investment in research and development (R&D) and heavy investment in science, technology, engineering, and mathematics (STEM) education, ushering in the Fourth Industrial Revolution (4IR) characterised by artificial intelligence (AI), the Internet of Things (IoT), robotics, electric vehicles (EV), and autonomous vehicles (AV), among others. Climate change, and the consequential drive toward decarbonisation, has imposed its own technological imperatives, leading to renewable energy innovations and the setting of net-zero emission timelines. Global competitiveness in the years ahead is going to be determined by clean energy and smart technologies. None of the foregoing can happen in a country without a robust and vibrant electric power sector that more than meets its energy needs and that has attained energy security in a sustainable and self-reliant way.

The first of the seven concluding articles I have published in the last seven weeks focused on medium- to long-term strategic and structural considerations, which are preconditions for turning around the Nigerian power sector. The second focused on energy diversification, while the third addressed the need for accelerated development of natural gas for fuelling the power sector. The fourth advocated for an ambitious investment in the expansion of our national grid. The fifth considered the need for a comprehensive renewable energy strategy against the background of the global surge in renewable energy and its fast adoption rate in Nigeria, and the sixth zeroed in on privatisation, which has been a recurring theme in my series on the power sector. The present article advocates for an overarching strategy for the power sector, which will be a combination of all the above six propositions and more.

 “A nation without a bold and ambitious economic vision is doomed to poverty and relegates itself to the role of ‘hewers of wood and drawers of water’ for visionary and ambitious economic powerhouses like China and, increasingly, India.”

An overarching Nigerian power sector policy and strategy must begin by positioning itself in the context of what role it can play in making the Nigerian economy a global powerhouse in the next decade, much in line with the picture painted in paragraph two above. A nation without a bold and ambitious economic vision is doomed to poverty and relegates itself to the role of ‘hewers of wood and drawers of water’ for visionary and ambitious economic powerhouses like China and, increasingly, India. It is not the huge populations of these two countries that make them global economic powerhouses. The names ‘China’ and ‘India’ were synonymous with poverty a few decades ago. It is the adoption of ambitious national development visions realised through vigorous implementation with resolute commitment driven by iron-clad political will, especially in the case of China. This explains why China was able to increase power generation from 200,000 megawatts (MW), or 200 gigawatts (GW), in 2000 to 3,610 GW in 2025, a 17-fold, or 1700 per cent, increase in 25 years, which has boosted its gross domestic product (GDP) from US$1.211 trillion in 2000 to US$19.03 trillion in 2025, a corresponding 15-fold, or 1500 per cent, increase in her GDP within 25 years.

Read also: Nigeria’s power sector: The way forward (Part 2)

Nigeria’s overarching vision and strategy for her power sector must have the following elements:

1. It must be bold and ambitious, aligned with an overall big picture for the Nigerian economy to be the factory of West and Central Africa in the next five years and a newly industrialised country (NIC) in the next ten years, sitting at the same table with global economic powerhouses, dividing the spoils of global economic conquests with them.

2. The policy must be transformative and discard the current mentality of incrementalism, which has kept our national grid-transmitted electric power supply at about 6000 MW in 65 years of political independence!

3. The strategy must banish the ‘silo mentality’ of the current public sector managers of the power sector, especially policymakers, and plan from the perspective of the electric power needs of strategic sectors of the economy for accelerated growth of our nation’s GDP.

4. The policy must unequivocally set the private sector in the driver’s seat for the transformation of the Nigerian power sector for geometric increases in power supply in a relatively short period of time. This means a bold policy of privatisation aiming to give private sector players and investors full ownership and control of power sector assets in the entire power sector value chain, following the good example of the United Kingdom.

5. It means a bold policy that will increase the share of renewable energy in our energy mix rapidly to between 30 and 50 percent by 2030, taking a cue from the global trend and the trend in leading countries in Africa, like Egypt and South Africa. This also requires increasing the share of hydropower as a renewable energy and its share in the overall energy mix, taking a cue from East African countries like Uganda and Ethiopia, to mention a few. Thus, the legal entanglements surrounding the 3050 MW Mambilla hydropower dam will need to be expeditiously resolved.

6. At the same time, a purposeful policy on realising gas as our national transition energy requires an aggressive private sector investment strategy anchored by a robust power sector enabling business environment before the window of opportunity to access funds and investments for fossil-fuel plants closes as the decarbonisation drive gathers momentum globally.

Read also: Nigeria’s power sector: The way forward (Part three)

7. It requires a policy and strategy on a five- to ten-year development plan on aggressive local manufacturing of electric power equipment, including gas and wind turbines, solar panels, lithium-ion batteries, and large battery storage technologies, among others.

8. The structuring of a Pan-African collaborative manufacturing and financing model for local manufacturing of power sector equipment in Nigeria and Africa, as well as local and foreign private sector investors and manufacturers, will be instrumental.

9. The adoption of modular nuclear power plants or small modular reactors (SMR) as an option for access to nuclear energy in Nigeria, which are factory-built and can be assembled quickly and are safer and more cost-effective as part of our energy mix.

These elements of a comprehensive or overarching strategy for the Nigerian power sector are by no means exhaustive but are pointers to the elasticity and instrumentality of strategic thinking in addressing power sector and national development challenges facing a developing country like Nigeria. A great deal will depend on winning over power sector policy makers.

Mr Igbinoba is Team Lead/CEO at ProServe Options Consulting, Lagos.