Power/electricity is the major driving force for development in any economy. Be it manufacturing, tourism, aviation, name it!
Chaos and catastrophe are the outcome to a country that lacks such basic infrastructure.
Failure persists, industries collapse, systems are dysfunctional, and life becomes extremely difficult and expensive for residents and business operators, thus leading to abject poverty, even when it does not seem like so.
Nigeria today, should not be dealing with issues of power at this stage of its national existence, particularly after unimaginable amounts of money have ‘supposedly’ been spent on power projects by successive administrations over the past two decades.
There are several ways of analyzing this huge ‘National loss’. The enormous loss and the dynamics of the absence of such an important element to a nation, need to be quantified, so that there can be an understanding of the subject.
When the issue of increasing cost of power outages are discussed, pain, anger, and anguish accompany responses from regular people who live and run their livelihoods on the Nigerian soil. Every business owner, particularly those operating production lines and hospitality will confirm to you that approximately 40 % of their expenses are attributable to power provision. This is why the few locally produced goods cannot compete with imported ones and the hospitality sector rates in Nigeria are one of the most expensive in the world. Most industries have shut down because they simply can’t cope. Thus, putting pressure on the foreign currencies as demand for them were the major transactions in the banking industry. This resulted in the gradual and steady weakness of the local currency, then, the inherent ‘recession’.
Let’s look at a simple analysis:
Comfort Lives in Abuja. She has a medium size house, and runs her office from home. She buys petrol worth N3,000 every other day, because she has to run it at least 15-18 hours everyday. He spends about N45,000 monthly.
Mallam Abdullahi Lives in Lagos. He spends about NGN5,000 on diesel daily. That is about NGN150,000 a month. On Mallam’s street, there are 15 other homes; at least 7 of them power their generators at about the same cost
NGN150,000 x 7 HOMES = NGN1,100,000 a month
On Mallam’s street, conservatively they spend about NGN1,100,00 on diesel monthly, which is a minute figure, compared to all the homes within the length and breadth of Nigeria.
There is an estimated 170million people in Nigeria, let’s assume that 40% of the population fall into Mallam’s category, that is about 68 million people.
NGN68,000,000 x NGN1,100,000 = NGN74,800,000,000,000.0
Essentially, well more than NGN75T is lost to import product (diesel & petrol) monthly, by a fraction of Nigerians. Not to mention the cost of generating sets, inverters, solar and power generating solutions (all imports) that are being purchased by desperate citizens seeking independent solutions for basic comfort.
Imagine stuffing your generator with dollar notes and churning smoke out of it…literally burning foreign exchange daily is the practice of running generators to power our existence.
When we take into consideration large industries, organizations, and businesses that consume much more diesel fuel monthly, the point is made!
No wonder banks cut banking hours by one hour, cutting their running costs by huge amounts nationwide.
For example, GtBank has 231 branches, 17 Cash Centres, 18 e-branches, 35 GTExpress locations, and more than 1165 ATM’s (Source: Wikipedia) – All these locations must be powered one way or another.
Our total annual loss to fuel, power generators, and repair parts (all imports) is simply astronomical. While we struggle with promoting foreign investment, tourism, and other revenue generating projects; there is a perpetual hole in the Nigerian pocket. Not to mention the health and environmental hazards caused by smoke from generators.
It is clearly evident that our power problems should be tackled by ALL MEANS. Wake up, Nigeria!
* These figures are conservative approximations. A more ideal scenario is better imagined.
Toyin W. Oke
The Street Hawker