A renown Financial Analyst and the Chairman Board of Trustees Chartered Institute of Development and Social Studies has called on the federal government to look into other means of generating electricity saying the current practice where there is frequent seizure of light is killing the economy
His words” Yes no doubt Nigeria’s high population growth and the quest for industrial growth has led to increasing demand for electricity.
“As an emerging economy, electricity demand is expected to keep growing significantly in the forth coming periods, 2020 and beyond. Such rapid development raises a number of questions for government:-
” Firstly, how to secure funds to finance such an aggressive power source development
Secondly, how to manage the power sector effectively and efficiently.
“Electricity retail tariff in Nigeria is governed by government, although the retail tariff is not uniform across the country but it is highly subsidized. To address the above challenges the Nigerian government has restructured the tariff been paid per unit of electricity. The new tariff plan which has been approved by the federal government will see its implementation from April 2020.
“This government argued that electricity retail tariff to users must first be increased; if there will be a significant shift in electricity availability. Secondly the weighted average retail electricity tariff in Nigeria is generally lower than that of most country; with this the government argued that there will be no attractive local or foreign investor that will meaningfully invest in our power sector.
“This action will definitely have impacts on every sector of the economy, affecting the macroeconomics indicators and social welfare indicator.
” The increase in tariff many has argued will have a negative impact on the end users since there is no significant increase in amount of power supplied as promised to compliment the situation rather the existing capacity dropped drastically by more than half of what it used to be and resulted to frequent Nationwide load shedding
“The increase in tariff will indirectly cause an increase in commodity Price, especially of those commodities produced from electricity intensive industries (e.g metal and fabricated metals, minerals, chemicalsand furniture).
” The increase in traiff will also see to the increase in the aggregate change in commodity price and this will reflect in the consumer price index. Households will demand for goods and services that are relatively less electricity intensive ( agriculture, food,beverages, jute,textiles and leather) this would increase their prices and vice versa.
“It will be better for government to revamp the electricity sector by looking at other alternative sources of electricity which are less expensive to build and maintain such as solar which and wind. solar power should be completely hanced due Nigeria’s long hour’s of daylight.
” Although MTN and some institutions such as BUK are making great inroads but more than this should be encouraged. Wind power should also be explored in Nigeria, more inroads in wind power should follow the wind turbines in Rimi local government area of Katsina which generates 10mv,if develop well will increase electricity output with south tariff increase.
“Another area where government should look into is the complete unbundling of the power sector, if all the above are successfully done all these will increase power availability with increase in tariff and even increase the GDP, making power sector as functional as the telecommunication sector.” He pointed out