A report by PricewaterhouseCoopers (PwC) has identified what will bring electricity stability in Nigeria.
According to the report, to achieve the target of a yearly per capita power consumption of 982-kilowatt hour (kWh) in Nigeria by 2025, there is need to scale up generation, transmission and distribution capacity.
PwC, which made this suggestion in its July report on the Nigeria power sector titled: “Powering Nigeria for the Future”, noted that government, regulator and industry participants will all play core roles in the country’s quest for regular power supply.
It also stressed the need for the country to drive efficiencies in utilisation, and reducing transmission and distribution losses.
It added that the government and regulator needs to take the lead to create the right investment climate and set favourable policies in place, whilst industry participants focus on implementing new technology, faster project execution and improving operational efficiencies.
According to the report signed by Growth Markets Centre Leader, David Wijeratne and Partner, PwC Nigeria and Power and Utilities Leader, West Market Area, Africa, Pedro Omontuemhen, in addition to assigning roles and ownership, successful execution of these levers will require careful planning and sequencing, with key dependencies identified.
It added: “For example, revamping the existing infrastructure and implementing efficient processes across the value chain can be a more immediate task for existing players, supported by new participants with key expertise, bringing near term benefits.
“As these improvements take place, the longer and more complex process of policy formulation and attracting new investments for scaling up can be considered independently by the government, regulator and other agencies, in order to lay the platform for the next phase of enhancement of building and operationalising the new projects to power Nigeria for the future.
“Whilst there is no single short-term solution to Nigeria’s power challenges, there are a number of opportunities for companies to bring their global skills and expertise to the table and participate in the journey of powering Nigeria’s long-term growth”.
In order to emerge from the current situation, the report stressed the need for Nigeria to take specific steps towards building internal capabilities, which will enable and support the economy.
PwC said that one area requiring immediate focus and investment is the power sector, where the low availability of power was currently a major obstacle.
It put the Nigeria’s per capita power consumption at only 151 kWh per year, one of the lowest in the region and globally.
It stated: “The sector is currently inhibited by multiple factors such as value chain losses, limited transmission coverage and supply disruptions as well as theft and corruption.
“Based on ongoing projects, the per capita power consumption in Nigeria will only reach 433 kWh per year in 2025. Given the requirements of the economy and the population, there is a critical need to drive higher power availability, and we believe a stretch target of 982 kWh per year by 2025 is realistic. This is based on benchmarking with other growth markets, like Vietnam”.
To reach the set goal, PwC prescribed the acceleration of growth in power generation capacity and improving utilization; expansion of the power transmission network and driving better efficiencies; and the establishment and scaling up efficient power distribution capabilities.
Executing these levers, it noted, will also require significant involvement and alignment between the Federal Government of Nigeria, the Ministry of Power and the industry participants.
It added that the implementation needs to be well- planned and sequenced appropriately to derive the desired benefits. “Overall, Nigeria has the potential to once again emerge as a shining star, not only within Africa, but in the global economy as well. Enhancing the availability of power over the next decade, based on robust generation, transmission and distribution capabilities, will help create a strong foundation towards unlocking this potential and powering Nigeria for the future”, it added.
PwC said that cheap and abundant availability of power is a pre-requisite for economic development, with the potential to have a multiplier effect on growth.
It stated: “The power sector facilitates high capital spending which promotes investment and builds economic competitiveness. Take the example of India, where there is a strong commitment towards improving the business climate through addressing key bottlenecks in infrastructure. Here the spotlight is on the power sector – where the government is seeking to attract investments worth $1 trillion by 2030”.