
The decentralisation of Nigeria’s power sector is a step in the right direction, but significant capacity gaps at the state level threaten its success, according to Tonye Cole, Co-Founder and Executive Director of Sahara Group.
In an interview with ARISE NEWS on Monday, Cole highlighted the challenges states face in regulating the sector effectively, citing the need for enhanced knowledge and capacity-building.
“When you find out and you look deeper into it, you then find out that not all the states have the capacity to run and regulate,” he said. “There has to be a knowledge gap that has to be closed if regulation is going to be done properly.”
Cole noted that the lack of coordination among key players in the power value chain has further complicated efforts to address systemic inefficiencies. He dismissed the notion that inadequate funding is the sole issue plaguing the sector, emphasising the importance of creating an environment conducive to private investment.
He explained that privatisation was intended to enhance the regulatory framework and attract private investment into the power sector. According to him, demonstrating the sector’s viability and ensuring the safety of private investments should naturally draw investors; however, if this isn’t occurring, it indicates a flaw in the system.
Cole underscored the complexity of the power sector, describing it as a value chain that begins with the production of gas or electricity and includes generation, transmission, and distribution costs. He pointed out that the pricing structure remains misaligned, leading to ongoing distortions in the ecosystem. Furthermore, he stated that if the consumer price does not align with the costs across the entire value chain, it will create an imbalance in the system.
Additionally, he stressed the need for government intervention to localise production capabilities for essential components like turbines, pipes, and machinery.
“If the government does not put in, not just the policies, but an enabling environment that allows local production… the price of electricity at the end of the value chain will have to be high,” Cole warned.
Also, he criticised Nigeria’s over-reliance on generators, describing it as a symptom of deeper systemic failures. According to Cole, from a governmental standpoint, the prevalence of generators in Nigeria should be viewed as a systemic issue requiring urgent attention. Policies must be implemented to significantly reduce their numbers, as Nigeria likely ranks among the countries with the highest density of generators worldwide.
Frances Ibiefo
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