As 100 million Nigerians still struggle to get access to consistent and affordable power supply, Special Adviser to the President on Energy, Mrs Olu Verheijen, has stressed the need for Nigeria to shift focus to using electricity for productive activities.
Speaking on the Power and Energy Access session panel at the last day of the Nigeria International Energy Summit (NIES) on Friday in Abuja with the theme: “Electricity for All: Bridging the Energy Access Gap,” she noted that the shift in focus would help in improving income and economic growth.
Represented by the Team Lead Power, Office of the SA on Energy to the President, Mrs. Eriye Onagorowa, she regretted that, unlike other climes, businesses operating in Nigeria were becoming less competitive both locally and globally, due to the continued struggle with high operational costs and lower productivity, adding that a lack of reliable electricity limits productivity and restricts economic expansion.
While noting that household electrification was a vital step that enhances living standards, she maintained that it merely scratches the surface of the energy sector’s potential to transform society, as real energy access goes beyond household license because it seeks to enable a diverse array of activities fundamental to modern existence and economic progress.
She said: “We must look at powering businesses, machinery, computers, and industrial equipment essential for today’s economy.
The goal is to provide reliable, affordable, and clean energy at a scale and pace that fosters economic expansion, job creation, and increased incomes across Nigeria and the wider continent.
“For Africa to unlock its full economic capability, energy solutions must be stable and sustainable. They must support both urban and rural economies. It is clear that an urban society cannot grow without a rural economy. This vision must go beyond the home license to energizing the industry.
“It demands a sturdy, reliable, and scalable grid infrastructure that can supply the vast amounts of clean, cost-effective energy needed to fuel industrial advancement, spur employment, and encourage innovation. Clearly redefining energy access involves adopting a comprehensive strategy that prioritizes a complete energy ecosystem, powering every aspect of economic activity beyond household needs.
“Nigeria’s macroeconomic difficulties and unreliable power supply have severely impacted the productivity of the commercial and industrial sectors. Over the years, this has resulted in low productive use of electricity. This situation has led to a scenario where a disproportionate amount of the available power is consumed by the residential sector, which accounts for more than 70% of final electricity consumption.
“Furthermore, over 70% of Nigerians live below the middle-income international line of poverty, which is set at about $3.20 per day, rendering them unable to afford electricity access. The implication of this is a largely poor residential customer base, resulting in limited revenue for utilities.
“This in turn exacerbates the issue of reliability and affordability, as utilities find themselves unable to reinvest in expanding and enhancing the electricity infrastructure. To address these challenges and unlock the economic potential of Nigeria’s energy sector, it is crucial to shift our focus towards growing the productive use of electricity, particularly in our commercial and industrial sectors. These sectors clearly have a higher capacity to pay cost-reflective tariffs and are crucial for powering productivity and competitiveness.
“By enhancing access to reliable electricity for this sector, we can stimulate job creation and increase the economic and income growth. Successful businesses in these sectors are clearly likely to take higher jobs, improving the purchasing power and creditworthiness of the population.
“This strategic focus not only aims to lift people out of poverty, but also strengthen the financial viability of the energy sector.”
Verheijen further disclosed that the current administration was working towards
expanding access to electricity and enhancing its productive use by addressing the foundational problems which includes offsetting outstanding debt to all the various sectors of the electricity value chain.
“This is a move designed to encourage the consistent and continued availability of power. This strategy is expected to bolster the financial health of the Gencos and lead to an increase in electricity production across the nation.”
The President’s aide who further highlighted that the power between the number of people living in poverty and those without access to electricity in Nigeria was not accidental, explained there was a link between electricity consumption and economic development. As such, she noted that developed countries have continued to grow in terms of income per capita, productivity, and job creation.
According to her, Nigeria was regrettably at the bottom of energy consumption per capita in Africa, with “South Africa leading the pack with about 23,392 kilowatt-hours annually, which comes to about 1,949 kilowatt-hours monthly. Closely followed by Egypt, 9,639-kilowatt hours annually, which comes to around about 800 kilowatt hours per month. Morocco, 7,237-kilowatt hours annually, comes to about 600 kilowatt hours monthly. Nigeria last and certainly the least, 2,548-kilowatt hour annually, translates to around about 212 kilowatts per month.”
