By Micheal Eboh

Unless the Federal Government entrenches competition in the Nigerian power sector, the goals and targets envisaged for the sector would not be achieved, said Prof. Adeola Adenikiju, Head, Centre for Petroleum, Energy Economics and Law, University of Ibadan.

In his presentation at the Worldstage National Electricity Power Conference in Lagos, Adenikiju also bemoaned the exploitation of electricity consumers in Nigeria, saying that Nigeria has one of the highest tariffs in the World.

According to him, competition is very important in the power sector and the role of the electricity regulator is very crucial.

To promote competition, he stated that the Nigerian Electricity Regulatory Commission, NERC, must be ahead of the curve in terms of capacity and regulatory instrument.

He further listed the challenges bedeviling the sector to include: absence of institutional and regulatory capabilities; challenges of transparency and independence of the various organisations established to oversee the new Electricity Supply Industry, ESI, that will emerge in post privatisation.

Others, according to him, are: inadequate gas infrastructure, the issue of liquidity across the value chain, transmission in infrastructure and economic losses, due to the fact that revenue is still less than cost, as a result of illegal connections and non-payment of tariffs when due.

Adenikiju, who was represented by Dr Joseph Omojolaibi, disclosed that Nigeria cannot develop faster than her electricity development, saying that the power sector is a binding constraint on our development.

According to him, achieving the goals in the transformation agenda, will never happen until electricity supply in rural and urban areas, cities and villages, North and South and every part of this great country has access to a more reliable, affordable and quality electricity supply.

“It is only then that the latent potential and greatness of this blessed country will be truly unshackled for greatness,” he explained.

On the way forward, he said, “We need to promote a more balanced electricity generation mix in order to improve energy security. The overwhelming reliance on gas-thermal from a relatively volatile part of the country easily put the whole supply chain in jeopardy and at the mercy of vandals.

“We must promote other sources of generating electricity, even if they are more expensive – renewables, coal, and others.”

Continuing, Adenikiju advocated, regular discussion with stakeholders to ensure transparency and accountability, saying there should be sufficient incentives to attract players along the value chain.

He called for the creation and development of the local financial markets for long-term loans, stating that short-term loans are not suitable for such investment, as these will dampen the sector.

Speaking in the same vein, Mr. Aderemi Bello, President, Lagos Chamber Of Commerce & Industry, said, “Clearly the structure of funds in the Nigerian financial system cannot support long term infrastructure projects such as power projects. The tenure of funds is very short, in most cases less than one year.

“The cost of funds is also very high, generally over 20 per cent. It is difficult to fund infrastructure investment with this kind of fund.”