In the realm of Nigeria’s power sector, where challenges have long cast shadows over promises of progress, a recent retreat organized by the Ministry of Power has brought forth a glimmer of hope. Attended by key stakeholders across the electricity industry value chain, the retreat served as a crucible for discussions, revelations, and perhaps, a strategic reset. As Robert Gilpin aptly put it, “A market is not politically neutral; its existence creates economic power which one actor can use against another.” These words resonate profoundly in a sector where economic power dynamics have often been wielded as political tools.
The Honourable Minister of Power, Adebayo Adelabu, unveiled significant insights during the retreat, revealing the Federal government’s commitment to subsidizing power by a staggering 600 billion naira in 2023. While such a substantial financial injection is essential to bridge the existing gaps, it raises questions about the sustainability of such subsidies and the need for a more holistic approach to address systemic issues.
Equally noteworthy was the announcement regarding the division of the Transmission Company of Nigeria (TCN) into two independent entities – the Transmission Service Provider (TSP) and the Independent Service Operation (ISO). This move begs the question: What impacts will this restructuring bring, and how will it contribute to the overall efficiency of the power sector?
In the spirit of market dynamics, it is high time for the Ministry of Power to pivot its focus toward policy formulation and coordination, allowing its agencies—NERC, TCN, REA, NAPTIN, FGN POWER, NDPHC, NEMSA, NELMCO, etc.—to take the reins of implementation. NERC, in particular, must be allowed to discharge its statutory obligations without undue political interference, fostering an environment where regulatory measures can be impartially applied to drive market growth.
A critical examination of the relevance of the Nigerian Bulk Electricity Trading Plc (NBET) is imperative. Is NBET still a linchpin in the evolving market, or does it need to redefine its role to align with the sector’s changing landscape? The post-retreat phase demands a meticulous review and realignment of these agencies to confront the challenges and disruptions anticipated with the passage of the Electricity Power Sector Reform Act 2023.
As some states, including Ekiti and Lagos, position themselves to participate actively in the electricity market, questions arise regarding their capacity and efficiency. The federal ministry of power and its agencies must play a guiding role, providing necessary support, expertise, and oversight. However, this presupposes that the ministry’s staff possess the requisite capacity and capabilities. The retreat underscored the urgency of addressing this capacity gap to ensure seamless collaboration between states and the federal government.
Against this backdrop, the performance contract signed by Minister Adelabu with President Bola Ahmed Tinubu holds promise. Cascading well-defined Key Performance Indicators (KPIs) and targets to the agencies under the Ministry of Power is crucial for meeting set objectives within the stipulated timeframes.
This process will not only enhance accountability but also foster a culture of excellence and efficiency in the sector.
Furthermore, inter-ministerial and inter-agency collaborations are paramount for the sector’s success. Collaborations with the Ministry of Environment, Ministry of Water Resources, and Ministry of Petroleum Resources are particularly vital, as they can provide the necessary synergies to address environmental concerns, water resource management, and fuel supply challenges that impact the electricity sector. Recognizing the interconnectedness of these sectors will be instrumental in developing holistic solutions.
In conclusion, the recent power sector retreat has set the stage for a transformative journey. It is a call for the Ministry of Power to reevaluate its role, relinquishing direct control over implementation to its specialized agencies. The market is a powerful force that can drive change, but only if harnessed effectively. As Nigeria navigates its power sector challenges, the government must heed the call of Robert Gilpin and recognize that a politically neutral market is not only possible but essential for sustainable economic growth. The post-retreat phase offers a unique opportunity to usher in a new era of collaboration, efficiency, and accountability—a dawn of power for all.
