Nigerians and businesses will continue to spend more on powering their alternative electricity sources as there is no hope for a better public power supply next year.
Already, President Muhammadu Buhari’s administration has voted arould N104 billion for purchasing generators, fueling and servicing for Ministries, Departments and Agencies (MDAs) of the Federal Government.
This is even in spite of the public showing, the Buhari administration in the area of improved power supply in the country. A report by The PUNCH says MDAs of the Federal Government will be spending that huge amount in 2022 despite huge amounts pumped in so far to shore up the epileptic power sector.
For instance, in June 2020, Abuja rolled out a N2.3 trillion ($5.9 billion then) stimulus plan to help support the economy. International organisations are also providing support for Nigeria’s power sector.
African Development Bank (already working with Nigeria on a $410 million transmission project) pledges to invest an additional $200 million through the Rural Electrification Agency (REA), to expand Nigeria’s power sector and improve access to electricity.
In 2020, the World Bank approved an additional $750 million Power Sector Recovery Operation (PSRO) loan for Nigeria to achieve financial sustainability, enhance accountability, and ensure the supply of 4,500 MW/h of electricity to the grid by 2022.
In 2019, the World Bank approved a $550 million loan for Nigeria to develop mini grids and solar home systems based on its projections that the country’s mini grid sub sector was set to expand rapidly. The Power Sector Recovery Programme (PSRP) was initiated in 2017 by GON, in collaboration with the World Bank, as an operational and financial intervention to review and address the power sector financial deficit.
In June 2020, the Buhari administration approved $120 million for the continued construction and completion of the Kashimbila multipurpose dam in Taraba State, expected to generate 40 MW and water for the community.
The administration recently signed a six-year, N1.15 trillion contract with Germany’s Siemen AG for a three-phased electrification project aimed at increasing Nigeria’s power to 25,000 MW. According to the Technical and Commercial Proposal released in May 2019, the first phase of the project will add an additional 2,000 MW to Nigeria’s existing on-grid capacity, significantly reduce aggregate technical, commercial, and collection while achieving improved grid stability and reliability.
The scope of work for the first phase would entail transmission and distribution assets upgrades, grid automation, national metering infrastructure, power system simulation, and general technical training.
Nigerian National Petroleum Corporation’s (NNPC) Abuja 1350-megawatt power plant, which received a $1.16 million funding commitment from USTDA, is set to benefit from the Ajaokuta–Kaduna–Kano (AKK) gas pipeline being built.
The power plant is being built by US companies GE and Continuum Associates, in partnership with the NNPC. In addition to ongoing power projects in Nigeria, Abuja has signed a $2 billion power production agreement with Siemens under the Presidential Power Initiative.
The project is expected to boost Nigeria’s electricity production to 25,000 megawatts by 2023. The NNPC plans to build two more power plants in Kano and Kaduna, bringing the total capacity of the three projects to 4600 MW of electricity production capacity.
Interestingly, Sustainable Energy For All (SE4ALL), a global initiative on accessible, clean and efficient energy says little progress has been made with regards to providing access to non-solid cooking fuels since 1990. But, in 2010, only 26% of the population had access to non-solid cooking fuels with a big difference between urban and rural areas
With a share of 2% in the total final energy consumption, electricity remains a marginal source of energy in Nigeria. Furthermore, electricity only represents 9% of the household’s total energy consumption
Yet, Nigeria is Africa’s largest economy, but has one of the widest energy gaps in the world. With a quickly growing population, Nigeria urgently needs to improve its power sector. The country’s current installed capacity is reported at 12,500 megawatts, but in practice is only 3,200 megawatts.
President Buhari administration’s aim to boost electricity access from 45% today to 90% by 2030 will drive even more demand. The administration privatised part of the power sector in 2013 hoping to promote efficiency, attract private investment, and increase generation, but this has yet to deliver results.
However, the N104 billion which would have been injected to further boost the power sector, will be spent on generators due to the country’s unstable power supply exceeds the Internally Generated Revenue of about 24 states of the federation.
The details are contained in the 2022 budget proposal which has yet to be approved by the National Assembly. According to The PUNCH, the figure may be higher as about 15 agencies including the Joint Admissions and Matriculation Board, Federal Mortgage Bank of Nigeria, the Independent National Electoral Commission, National Information Technology Agency, National Pension Commission, Nigeria Customs Service, Central Bank of Nigeria, National Examination Council, and others did not indicate their generator budgets.
Though a review of the budget shows that the Federal Ministry of Finance, Budget and National Planning headed by Zainab Ahmed, takes the lion’s share of 80 per cent for generators as the ministry set aside N82.03billion, the item under the heading, ‘Purchase of Fixed Assets- General’ reads, “Purchase of power generating set 82,030,000,000.”
By press time, Spokesman for the Finance Ministry, Yunusa Abdullahi, failed to respond to the newspaper’s inquiry on why the budget for generators for the ministry is very high.
Its further analysis of the budget showed that among the agencies, the Federal Inland Revenue Service has the highest budget for generators. The agency earmarked N250 million for maintenance, N1billion for fuelling the generators and N550 millio for purchasing new ones, given a total of N1.8 billion.
Nigerian Army has the second highest budget for generators having earmarked N971.7million for generator fuel alone. Nigerian Maritime Administration and Safety Agency has the third highest budget for generators at N946 million.
Department of Petroleum Resources set aside N118.7million for maintenance, N666.8million for generator fuel and N120million for the purchase of generators in its offices in Sokoto, Kano, Makurdi, Yenagoa, Ilorin and Umuahia, bringing it to a total of N905.5million.
The agency with the 5th largest generator budget is Nigerian Ports Authority which set aside N798.2million for the maintenance and purchase of generators. Nigeria Deposit Insurance Commission budgeted N470million for the maintenance of a generator plant and N262.11million for the procurement of a generator, given a total sum of N732.1million.
While Federal Road Safety Corps set aside N529.3million for maintenance, fuel and purchase of generators, Nigeria Police formations and commands across the country are expected to spend N211.5million on maintenance and N309.8million on fuel for the generators, a total of N521.3million.
Similarly, Nigerian Communications Commission will spend N500million running generators next year having earmarked N190million for maintenance, N150million for the purchase of new generators and N160million for the purchase of fuel for generators. Bank of Agriculture set aside N420.5million for the purchase of a generator while Standards Organisation of Nigeria intends to spend N412million on new generators and the maintenance of existing ones.
Federal Airport Authority of Nigeria will spend N400million on generators. National Inland Waterways Authority earmarked N379.93million for the rehabilitation of a generator plant and N50million for the procurement of a generator while Nigeria Civil Aviation Authority budgeted the sum of N240.57million to maintain its generator plant and N124million to acquire a new generator.
Other agencies with large generator budgets include: Nigerian Defence Academy (N373million), Nigerian Navy (N344million), Economic and Financial Crimes Commission (N342.2million); Accident and Investigation Bureau (N323million); Nigeria Immigration Service earmarked N296.91million for generator expenses out of which N86.9million would be spent on fuel while N144.8million and N65.09million would go to the purchase and maintenance of generators respectively.
Nigerian Meteorological will spend N285million on purchase, maintenance and fuelling of generators in 2022. Nigeria Export-Import Bank will spend N217.67million for the maintenance, purchase and fuelling of generators in 2022 while Nigeria Correctional Service earmarked N134.9million for generator fuel cost, N43.6million for maintenance, a total of N178.5million.
Office of the Head of Civil Service of the Federation earmarked N157.8million for the maintenance, fuelling and purchase of generators in 2022 while National Youth Service Corps set aside N100.2million for the same expenses. Independent Corrupt Practices and Other Related Offences Commission will spend N127.6million as well.
While Nigerian Airspace Management Agency and the Nigerian Postal Service will spend N100million and N103.1million respectively on generators, Federal Ministry of Health and its agencies comprising 88 federal teaching hospitals, medical centres and agencies will spend N3.1billion on generators next year. The health agency with the largest generator budget is the Nigerian Institute of Medical Research which will spend N230million on purchasing generators, N5million on fuel and N1million on maintenance.
Ministry of Education which oversees 197 federal secondary and tertiary institutions, departments and agencies earmarked a combined N2.8billion for generators. The agency under the ministry with the highest generator budget is Federal Polytechnic Ekowe which earmarked N237million for the purchase of generators, N18.9million for maintenance and N8.2million for fuel, a total of N264.1million.