Ola Akinwunmi
Nigeria’s crippling N4 trillion power sector debt is a direct consequence of the deeply flawed 2013 privatization process, particularly the inadequate licensing and persistent under-capitalization of distribution companies (DisCos). This damning indictment comes from energy expert Nick Agu, who, speaking to the media on Tuesday, delivered a scathing criticism of the foundational issues plaguing the nation’s electricity supply.
According to Agu, the Goodluck Jonathan administration’s privatisation strategy was “far below expectations” primarily because it failed to genuinely privatise the crucial transmission segment. “They privatised the generation and they privatised the distribution, but they left the transmission unprivatised,” Agu explained, asserting that this significant oversight “made that privatisation to be dead on arrival.”
Agu further revealed shocking details about the financial standing of several DisCos, whose share capital, in many cases, is alarmingly low. “I have five distribution companies, their share capital is 5 million naira, I mean 10 million naira. 10 million naira is just about five to six thousand dollars,” Agu stated, questioning the rationale behind entrusting such under-capitalised entities with the responsibility of distributing electricity to multiple states.
He stressed that these power distributors, lacking the “capital, the expertise, or the technology” to modernise infrastructure, have been demonstrably unable to effectively collect revenue from consumers. “The distribution companies (DisCos) are the biggest culprits because they are the ones who are expected to take money from consumers. And because they are not taking money from the consumers, that is why the government is now subsidising electricity, and that is what has caused this debt,” Agu elaborated.
The energy expert strongly urged the current administration to immediately address the transmission challenges and compel the DisCos to invest in necessary infrastructure. He emphasized that these companies should no longer be allowed to operate on licenses where they have effectively “broken their promises” to the Nigerian people. The colossal N4 trillion debt reveals an urgent need for comprehensive reforms to salvage Nigeria’s beleaguered power sector.