President Tinubu expressed deep concerns over the shortcomings of Nigeria's power sector privatisation, stating that the objectives set a decade ago have largely gone unmet.
Speaking during the Nigeria Electricity Supply Industry market participants and stakeholders roundtable, he highlighted that the national grid was currently catering to only 15% of the nation's electricity demand despite a decade of privatisation efforts.
Represented by the Special Adviser, Energy and Infrastructure, Office of the Vice President, Sodiq Wanka, President Tinubu stated, "Over 90 million Nigerians lack access to electricity, and the national grid serves a mere 15 per cent of the country's demand. This has led to widespread reliance on expensive self-generation, supplying 40% of the nation's electricity needs."
The President underscored that despite a target of 40,000MW set by the Federal Government for 2020, the current grid capacity has only marginally increased from 3,000MW to approximately 4,000MW. He pointed out the sector's well-known challenges, including commercial, governance, and operational issues, and stated the urgent need for recapitalisation of power distribution companies.
President Tinubu highlighted the dire financial state of the sector, revealing, "As of Q2 2023, only 60% of electricity sent to the grid is paid for, and the tariffs are far from being cost-reflective, especially after the recent devaluation of the naira."
He acknowledged the chronic underinvestment in transmission and distribution, attributing the sector's underperformance to technical and financial capacity issues.
Calling for immediate action, President Tinubu stressed the necessity for stakeholders to address commercial challenges, enhance the sector's investment attractiveness, and develop a clear plan to rebase tariffs.
He urged transparency in acknowledging shortfalls and finding ways to finance them, advocating for a comprehensive strategy to extinguish historic sector debts to various stakeholders within the value chain.