Nigeria loses N7.5 trillion annually to poor power supply

Nigeria is losing $25 billion – N7.5 trillion at the current exchange rate of N305 per dollar every year due to irregular electricity supply, according to the Federal Government Power Sector Recovery Programme report.

It is understood that aside this, accumulated power sector cash deficits from January 2015 to December 2016 amounted to N931billion ($2.9 billion).

This is the total amount underpaid by all the distribution companies (Discos) to Nigerian Bulk Electricity Trading Plc (NBET) for invoices submitted to each Disco for electricity delivered to their distribution networks – including losses incurred by the companies due to lack of a cost-reflective end user tariff.

Guardian NG reports that power sector operators believe that the revenue shortfall will adversely impact the ability of the Discos to make capital investments in metering, network expansion, equipment rehabilitation and replacement that are critical to service delivery.

Nigeria’s economy has been bedeviled by irregular electricity supply due to gas constraint – a challenge that has remained a biggest threat to the economy of Africa’s most populous nation.

For example, on June 2, 2017, average power sent out decreased to 3809Wh/hour, due to gas supply challenges, which constrained about 1718 megawatts of electricity.

A statistics released at the weekend by the Nigerian Electricity Supply Industry (NESI) showed that the reported line constraint was 147.5MW, while constraints resulting from high frequency were 800MW.

It further said that the power sector lost an estimated N1.279 billion on June 2, 2017 alone due to different constraints.

The total gas supply indebtedness of power plants from January 2015 to December 2016 is N155 billion ($500 million). Supply has been erratic and low, resulting in 1,400MW of constrained generation.

The vandalism of oil and gas delivery infrastructure has also shut down gas production, resulting in another 2,900MW of constrained generation.

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