And you thought we have an electricity supply problem…

FIVE MINUTES into Frank Edozie’s presentation on the challenges facing Nigeria’s power industry, the electricity cut out in the Jasmine Hall at the upmarket Eko Hotel in Lagos.

“Very timely,” Edozie, a former power ministry adviser and a senior consultant to the UK-funded Nigerian Infrastructure Advisory Facility, said over the low muttering and laughter of an audience of more than 100 people.

“We probably gas,” he said.

There’s no end in sight to the daily blackouts that the government says are costing Africa’s largest economy about $100 billion (R1.35 trillion) a year in missed potential and that President Muhammadu Buhari calls a “national shame”.

Gas shortages, pipeline vandalism, inadequate funding, unprofitable prices and

ran

out

of corruption mean fixing the electricity cuts two years after a partial sale of state power companies to private investors will not be easy.

Generated output has never risen above 5 000 megawatts (MW), which is about a third of peak demand, and if it did the state-owned transmission system can not deliver any more than that before it started breaking down.

South Africa, with less than a third of Nigeria’s population of about 180 million, has nine times more installed capacity and it too is grappling with blackouts.

Nigeria, Africa’s biggest oil producer, ranked the worst of 189 countries after Bangladesh and Madagascar on the ease of getting electricity connected to businesses, costing almost 7 percent of lost sales each

For years the industry’s poor performance has spawned jokes about… the company.

month, according to a 2015 World Bank Doing Business report.

The power bottleneck comes on top of a slump in oil prices and currency beset with inflation that are threatening Nigeria’s role as a destination for investors.

Economic growth slowed to 2.4 percent on an annual basis in the second quarter from 6.5 percent a year earlier.

About two-thirds of Nigeria’s people have no access to electricity and at the current plant commissioning rate, supply will barely meet 9 500MW by 2020, according to a 2014 World Bank project document.

Demand is expected to increase 10 percent each year. Buhari’s party promised before he won power in March’s election to generate 40 000MW within four to eight years.

For years the industry’s poor performance has spawned jokes about the former state electricity company’s name. Nigerians called the National Electric Power Authority “Never Expect Power Always”, and when its name was changed to the Power Holding Company of Nigeria a decade ago, they mocked it as the “Problem Has Changed Name”.

Hopes that the power situation would improve, after former president Goodluck Jonathan partially sold off 15 state generation and distribution companies for more than $3bn to private investors two years ago, have been dashed. – Bloomberg