Nigeria: SMEs - Hike in Electricity Tariffs in the Midst of COVID-19

3 April 2020
opinion

Electricity is essential to the economic and social interests of any nation. However, Nigeria is a country still overwhelmed and plagued with electricity concerns: from low generation, poor supply to load shedding and rationing; in fact, with frequent power outages and this has become the bane of the citizenry and entrepreneurs. In addition, with the monopoly structure of the electricity market in Nigeria, consumers are often billed for electricity not consumed in the form of "estimated billing". Electricity is, therefore, the main infrastructural deficit affecting Small and Medium-scale Enterprises, SMEs, particular those in manufacturing and this is holding back the full economic potential of this very important sector.

Recall, Nigeria's power sector was previously publicly run but has been privatised since 2005 with the signing of the Electric Power Sector Reform, EPSR, Act which unbundled the old National Electric Power Authority, NEPA. The Federal Government has since separated Power Holding Company of Nigeria, PHCN, into eleven distribution firms, six generating companies, and a transmission company. But yet, the sector is rattled by political, commercial, market and consumer-related issues and stakeholder management concerns. In this article, power and energy are used interchangeably to mean the same thing.

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