Nigeria’s Energy Crises
Nigeria’s economic situation is direr by the day. Nigerians can’t seem to catch a break. From rising inflation to fuel scarcity and incessant grid collapses, it is no wonder many claim the nation is moving backward. The need for energy stability as a catalyst for economic development cannot be overemphasized. Despite massive oil and gas resources, Nigeria can’t seem to get its energy supply right. This crisis has affected the electricity supply as well as other sectors. In the power sector, energy supply deficiency has become a norm. The generation subsector cannot meet expectations due to the dilapidated state of power plants, shortage of gas supply, and grid constraints. As of January this year, only five of the Niger Delta Power Holding Company (NDPHC) Limited’s power plants were operational – Olorunsogo, Omotosho, Sapele, Ihovbor & Geregu. The transmission and distribution subsectors are not any better as grid inefficiency, and poor distribution network means that even if we can attain our installed generation capacity, dispatching it to millions of consumers remains impossible.
It gets worse; the unending blackouts…
More recently, there have been unending blackouts due to frequent grid collapses. Within three days, the national grid has experienced two system collapses. A report from This Day live reveals that only 2,761.20MW of electricity is currently being generated following a breakdown of several power plants. The Transmission Company of Nigeria (TCN), last week, released a press statement faulting the Generation Companies (GenCos) over the poor transmission of electricity. In what appears to be another blame game situation, GenCos replied that the insufficient generation capacity is due to the debt owed them by the Nigerian Bulk Electricity Trader (NBET). In addition to the lack of electric power, the high fuel costs have made it difficult for individuals to self-generate electricity leading to the failure of business operations. Although the federal government announced that the challenge of fuel scarcity was due to the importation of bad fuel, pundits have it that it is a strategy to get Nigerians adjusted for fuel subsidy removal.
The Implication on Nigeria’s Economy
The unending energy crisis has an enormous effect on the socio-economic development and macroeconomy of a state. Currently, the country’s inflation rate has risen to 15.70% resulting in sharp increases in the price of domestic goods and services and disruption of activities. For the transport sector, fares have increased by as much as 100 percent overnight. In the aviation industry, for instance, fuel scarcity has affected operations and created uncertainty for business activities.
It is imperative for the government and policymakers to address the energy crisis challenge in Nigeria. One way to solve the challenge will be to have increased investment channeled into renewable energy development. This will reduce grid dependence and allow for business operations. Another solution will be for the government to develop modular refineries for domestic oil and gas production. This move will reduce the amount spent on fuel importation, lead to the creation of jobs and increase the country’s economy.
In conclusion, the energy crisis in Nigeria has a negative impact on its citizens’ lives and business operations. Therefore, it is high time the federal government and policymakers made sustainable efforts into developing alternative energy systems to diversify the country’s energy mix.