Consumers Lament As Nigeria Exports N23bn Electricity
Power consumers, on Wednesday, kicked against the export of about N23.13bn worth of electricity from Nigeria to some neighbouring countries in 2022 despite the widespread darkness witnessed in many Nigerian communities.
The latest data on the remittances by international customers, obtained from the Nigerian Electricity Regulatory Commission in Abuja, showed that Nigeria continued its export of electricity to the Republics of Benin and Niger, as well as some special categories of consumers.
It was observed that the total value of exported electricity from Nigeria in 2022 was $50.98m (N23.5bn, at the official exchange rate of N461/$ as of last year). But the international customers remitted $32.69m, an equivalent of N15.1bn.
This implies that they failed to remit a total of $18.29m or N8.4bn during the period, while the special customers also did not remit N792.6m in the same period, according to figures obtained from the power sector regulator.
Although some officials at NERC and other agencies in the power sector provided explanations as to why Nigeria was exporting power despite its poor supply in-country, electricity consumers kicked against the move.
“A World Bank report puts the total number of Nigerians that are not connected to the national electricity grid at about 90 million, out of about 220 million Nigerians. This is about the highest in the world.
“China, with a population of 1.4 or 1.5 billion people, has about 68 million Chinese persons who are not connected to electricity. Now, compare that to the 90 million people in Nigeria that are not electrified.
“But despite that, you are now exporting such a scarce commodity that your people desperately need. What kind of economic sense is that? When you hear such things you wonder whether it is on planet Earth that it is happening. The people behind that idea, what are they thinking?” the National Secretary, Nigeria Electricity Consumer Advocacy Network, Uket Obonga, told our correspondent.
The Power Exports
Providing updates on the remittances made by special/cross-border customers in the fourth quarter of 2022, the NERC said, “Transcorp-SBEE and Mainstream-NIGELEC received invoices of $3.44m and $5.5m respectively from MO (Market Operator) and made remittances of $0.93m (27.04 per cent) and $5.44m (98.9 per cent) respectively.”
SBEE is Société Beninoise d’Énergie Electrique, a Benin Republic power firm, while NIGELEC, which is Société Nigérienne d’Electricité or Nigerien Electricity Society, is a power utility firm in Niger Republic.
Going by the data from NERC, it implies that the total remittance from Transcorp-SBEE and Mainstream-NIGELEC in the Q4 2022 was $6.37m, while they failed to remit $2.57m in the same quarter.
“However, no remittance was made to the MO by Paras-SBEE and Odukpani-CEET against invoices of $3.03m and $2.02m respectively. The non-settlement of market obligations by this category of market participants should be a call to action for MO to activate relevant safeguards for remittance shortfalls,” the NERC stated.
This implies that the two international customers in this category failed to remit a total of $5.05m in Q4 2022.
In Q3 2022, the commission stated that Transcorp-SBEE, Mainstream-NIGELEC and Odukpani-CEET received invoices of $1.85m, $5.67m and $1.71m respectively from the MO, and made remittances of $1.2m (64.96 per cent), $5.55m (97.87 per cent) and $1.67m (97.59 per cent) respectively.
This means that the three international customers remitted a total of $8.42m, leaving an outstanding of $0.81m during the quarter under review.
The NERc also stated that “no remittance was made to the MO by Paras-SBEE against an invoice of $1.92m,” in Q3 2022, adding that “the non-settlement of market obligations by this category of market participants should be a call to action for MO to activate relevant safeguards for remittance shortfalls.”
The commission went further to state that in Q2 2022, two international customers remitted a total of $7.92m, while $0.01m was not remitted by the firms.
“In 2022/Q2, Transcorp-SBEE and Mainstream-NIGELEC received invoices of $2.42m and $5.56m from MO and remitted $2.42m (100 per cent) and $5.55m (98 per cent) respectively.
“During the same period, Ajaokuta Steel Company was invoiced N264.76m and N66.71m by NBET (Nigeria Bulk Electricity Trading Plc) and MO respectively, However, it made no remittance.
“Paras-SBEE and Odukpani-CEET also received invoices of $2.39m and $2.03m respectively from MO during the period but no payment was made by these customers,” the power sector regulator stated.
It again pointed out that the non-settlement of market obligations by this category of market participants should be a cause for MO and NBET to activate relevant safeguards for remittance shortfalls.
For the first quarter of last year, the commission stated that no remittance was made by Ajaokuta Steel Company for invoices of N391.65m and N69.45m issued to it by NBET and MO respectively.
It stated that three international customers remitted a total of $9.98m in Q1 2022, while the amount unremitted by international consumers during the review quarter was $3.51m.
“During the same period (Q1 2022), bilateral customers including Paras-SBEE, Transcorp-SBEE, and Mainstream-NIGERLEC received invoices of $2.72m, $2.74m and $4.61m from MO and each remitted $2.72m (100 per cent), $2.74m (100 per cent), and $4.52m (98 per cent) respectively.
“Odukpani-CEET received an invoice of $3.42m from MO during the period but no payment was made by this customer,” the commission stated.
Speaking further on the development, Obonga argued that the export of electricity was being done despite the ability of Nigerians to pay for the commodity.
The NECAN secretary stressed that the joint monthly revenues from two or three power distribution companies would surpass the N23bn garnered from the international customers all through last year.
“You have a large family and your resources are very meagre to take care of them. Meanwhile, your people are starving of hunger, and the little resource that you have, you say you are exporting it. How can that be explained?
“It is not that your people or Nigerians cannot afford to pay. As we speak, a Disco raked about N15bn in one month, made N14bn in another month, and you now prefer to leave these Discos and wheel electricity to people who will give you N23bn in a year?
“And you didn’t even recover all the money, since some of them haven’t paid completely. Well, summarily I’ll say it is an avenue for corruption and the new government of President Bola Tinubu should look into it thoroughly,” Obonga stated.
FG Justifies Export
Officials at the power regulatory commission explained that the export of electricity from Nigeria to neighbouring countries was based on agreements.
“There are certain conditions that led to the export of electricity to these countries and it is an obligation that Nigeria has to fulfill. This has been explained by senior government officials before,” a source at NERC, who pleaded not to be named due to lack of authorisation, stated.
However, in August last year, the Transmission Company of Nigeria explained that the export of electricity from Nigeria to other nations was providing an avenue to earn more foreign exchange for national development.
The Managing Director, TCN, Sule Abdulaziz, gave the explanation for electricity export at the Nigerian Power Consumers Forum, as he also confirmed that, “Nigeria, through TCN, had been exporting electricity to Niger, Benin and Togo under a country-to-country arrangement.”
Abdulaziz was quoted in a statement issued after the event by the Lead of the Advocacy Team, Nigerian Power Consumers Forum, Yusuf Bako.
The TCN boss, who doubles as the Chairman, Executive Board of West African Power Pool, had said the regional market would further enable generation companies to export power to more West African countries, which would be evacuated by TCN transmission infrastructure.
