Was Pipeline Vandalism The Cause of Nigeria’s Low Power Supply?

The Permanent Secretary of the Ministry of Power, Godknows Igali, has stated that there has been no gas pipeline vandalism since Buhari assumed office, hence the increase in Nigeria’s power supply.

According to This Day, Igali made this disclosure to newsmen at the Presidential Villa, in response to questions on what had been responsible for the recent improvement in electricity supply across the country. He stated that vandalism of gas pipelines was recurrent in the last days and months of the previous administration, and reached its peak on the May 26th when gas-generated electricity was completely grounded. However, the Peoples Democratic Party (PDP) retaliated, stating that the increase in electricity supply was due to the administration of our ex-President Goodluck Jonathan.

Igali however defended his statement, stating that operations within the Ministry of Power improved since Buhari took over as the current administration had redoubled efforts at engaging communities, where the pipelines pass through. This has increased the number of citizens attached to Nigeria’s electricity grid and it has further to allow peace to reign, hence Nigerian’s jubilating last Wednesday as the management of the Transmission Company of Nigeria stated that it had attained a new peak of 4,810.7 megawatts of electricity, the highest in our post-independence history so far.

Apart from building on efforts of past government and tasking stakeholders to double efforts by Buhari, Vice-President Yemi Osinbajo had been holding meetings almost on daily basis with power distribution companies (DISCOs) on ways of improving power supply to consumers. Igali further stated that “It is no miracle but a lot of work being directed by the president and the vice-president, people are working in a more concerted manner to achieve the prevailing results.”

With these efforts being sustained, Igali said that more gas had passed through pipelines without hindrance. He dismissed the insinuation that power supply improved because of increased rains, saying that the hydro power stations in Kainji and Shiroro contributed just about 20 per cent of the entire electricity and no substantial additions came from there.

Electricity tariffs in Nigeria:

In 2014, the Vanguard reported that Nigeria’s electricity tariffs are one the lowest in Africa. Although this statement had positive intentions, Andrew Etzinger, the spokesman for South Africas electricity utility (Eskom), stated that attempting to compare and rank electricity tariffs is a pointless exercise. According to Africa Check, Etzinger stated that having the lowest electricity tariff in Africa may not be something to brag about. He stated: “Countries which charge more for electricity usually have proper billing management, well maintained infrastructure and are able to provide a reliable service. You can’t compare the experience of the average South African home with the average Nigerian home. They are completely different.”

Nigeria’s tariffs have been too low to cover the basic operating costs of producing the country’s electricity. In 2009, Prasad Tallapragada, a senior energy specialist in the World Bank’s Nigeria Energy Programme, stated that Nigeria had one of the lowest electricity tariffs in the world. The tariff of about 4.3 US cents/KWh had remained constant since 2002. But the low tariff, together with an absence of proper metering and low collection rates, meant that basic operating costs were not met. As a result, according to Tallapragada, there was a yearly revenue gap that was filled by government transfers.

Nigeria’s power supply has been a heated topic for decades. A 2011 World Bank survey of 3,000 Nigerian business revealed that the biggest problem they reported was unreliable power supply. Businesses reported that they experienced average power outages of 8 hours per day. 88% of retail and manufacturing businesses survey reported owning private generators. And the manufacturing businesses surveyed reported that approximately 69% of their total electricity usage was produced by private generators. The costs of running private generators cost the average business the equivalent of more than 4% of their sales – an economic downfall.

What are we to expect now?

If Igali’s claim is true, then Nigeria is certainly in a strong, economic position. Unreliable electricity has affected our economy for years and if the power supply continues to increase, we may be able to position ourselves with the likes of South Africa, who don’t have the lowest electricity tariffs, but have higher standards of living for their citizens. Poor living standards is a key issue in Nigeria that needs to be addressed, hopefully with the help of the global SDG’s that will be finalised between the 25th and the 27th of this month. Latterly, the Transmission Company of Nigeria have stated that they are aiming to achieve 5000 megawatts of electricity in a short time; an important milestone for the nations economy.