• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Business News

PwC proposes possible solutions to the biggest problem facing Nigeria’s electricity sector

Emmanuel Abara Benson by Emmanuel Abara Benson
October 16, 2019
in Business News, Politics
GencosArnergy secures $9 million from investors, Electricity poles, Transmission Company of Nigeria, TCN to ban Ikeja Electric Eko Discos and Enugu Discos, Discos, power supply in Nigeria, Association of Nigerian Electricity Distributors,ANED, PwC proposes possible solutions to the biggest problem facing Nigeria’s electricity sector, GenCos to shut down over NBET's administrative charge  , DisCos fail to distribute 8,848.24 megawatts of electricity - TCN , Crisis rocks SSAEAC as association leaders accuse each other of sabotaging power grid, Power: No solutions yet   

Electricity plant

Share on FacebookShare on TwitterShare on Linkedin

Anyone living in Nigeria can testify that insufficient electricity production/distribution is the biggest infrastructural challenge facing the country. This problem has lingered for many years, adversely affecting the country’s economy. In the meantime, countless attempts have been made to resolve the problem. These attempts have, however, failed to yield any result. Now, PwC Nigeria is joining the effort with a recently published white paper titled, ‘Solving the liquidity crunch in the Nigeria Power Sector’.

The key observations  

The report by PwC Nigeria noted that the situation in Nigeria’s power sector is rather abysmal. The country’s operational capacity of less than 4,000MW is far less than the set target prior to the privatisation of the power sector in the early 2000s. The report also noted that only 60% of Nigeria’s population has access to electricity, meaning that the remaining 40% are completely cut off. Interestingly, even the 60% do not get quality service because electricity supply is epileptic.

[READ MORE: Federal Government spends N2.3 trillion on Subsidies in 3 years – PwC]

RelatedStories

PwC 

PwC Nigeria expands leadership, onboards three New Partners

July 2, 2024
Uyi Akpata, PwC Country Senior Partner retires after 40 years of service

Uyi Akpata, PwC Country Senior Partner retires after 40 years of service

June 16, 2024

power, Gencos want Discos’ job as it seeks to sell electricity directly to customers 

The main challenges 

As one can expect, there are many problems facing the Nigerian power sector. A lot of these problems bother on inadequate production. Also, the means via which generated electricity is transmitted also presents another major challenge. See the problems highlighted below:

  • Inadequate gas supply
  • Limited transmission lines
  • Operational inefficiencies
  • Poor water management at hydropower plants
  • Inadequate and obsolete distribution infrastructure

“Gas-fired power plants account for more than 77% of total electricity generated (Q4’2018: 71%) while hydro sources accounted for 23% (Q2’2018: 29%). Insufficient gas supply and variability in rainfall and water level at hydro plants, among other challenges, continue impact power generation in Nigeria.”

Liquidity crunch is the biggest challenge of the Nigerian electricity sector today. To learn more, read our latest white paper on Solving the liquidity crunch in the Nigeria Power Sector: https://t.co/FylctpXfeW pic.twitter.com/hQpvjLHA6z

— PwC Nigeria (@PwC_Nigeria) October 16, 2019

Besides these problems, PwC Nigeria noted that liquidity crunch is the most worrisome challenge facing the power sector. According to the company, the tariff framework (I.e., the electricity pricing structure in Nigeria) is non-cost reflective. This is because “industry participants often complain that electricity charges to customers do not reflect the cost of generation, transmission, and distribution…” As such, this predisposes the operators to liquidity constraints.

“Liquidity crunch is the biggest challenge of the Nigerian electricity sector today. The 11 DISCOs have been struggling to meet their obligations to the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operators (MO) as evidenced in their low remittances to NBET and MO. 

“In Q1’2019, only about 28% of the N190 billion invoice (comprising invoice of 161.4 billion for energy purchased from NBET and an invoice of N28.8 billion for administrative services from MO) of DISCOs were remitted.”

The ripple effect of these challenges 

Electricity is a vital component of the industrialisation process. Any country that wishes to industrialise without first sorting out its electricity challenges will keep on going around the same circle without accomplishing its set agenda. This is the situation Nigeria has found itself in – a situation whereby companies are struggling to remain in operation because the cost of production is unusually high, execrated by the high costs they incur from powering their generators because electricity supply from national grids is epileptic. Unfortunately, the DisCos cannot perform optimally because they too are grappling with the challenges highlighted above.

[READ ALSO: PwC’s Taiwo Oyedele critiques CBN’s newly-implemented cashless policy]

PwC proposes possible solutions to the biggest problem facing Nigeria’s electricity sector

What’s the forward? 

According to PwC Nigeria, a possible solution to the problem of liquidity crunch facing the DisCos is to start supplying 50% of distributable electricity to Nigerian companies. This, the white paper suggests, should be done provided these companies are willing to pay N80 per kilowatt. The remaining 50% can then be shared among residential consumers.

The paper went further to explain that doing this will help solve the liquidity problem facing the sector. This suggestion is based on the assumption that Nigerian companies would be willing to pay for stable electricity supplied by DisCos instead of expending more to generate electricity for themselves. And if these companies pay N80 per kilowatt for a collective 50% of Nigeria’s generated electricity, they would eventually be paying an estimated N400 billion to the DisCos. This would go a long way towards solving the main problem highlighted above.

“To revitalize liquidity in DISCOs, we consider 50% of energy received by DISCOs is transmitted to industries at a cost-reflective rate of N80/Kwh… At N80/Kwh charged to industries, an estimated N400 billion will be injected into the power sector annually.”

To read the full report, click here. 


Follow us for Breaking News and Market Intelligence.
Tags: Nigeria Power SectorOn the MoneyPwC Nigeria
Emmanuel Abara Benson

Emmanuel Abara Benson

Emmanuel Abara Benson is an experienced business reporter and editor. He currently edits articles at Nairametrics. Reach him via email on Emmanuel.abara@nairametrics.com and follow him on Twitter @Mr_Abara for his personal opinions.

Related Posts

PwC 
Appointments

PwC Nigeria expands leadership, onboards three New Partners

July 2, 2024
Uyi Akpata, PwC Country Senior Partner retires after 40 years of service
Companies

Uyi Akpata, PwC Country Senior Partner retires after 40 years of service

June 16, 2024
President Bola Tinubu, The Shege Promax Economy
Business News

PWC projects more economic hardship, higher cost, lower revenues for Nigerian business

July 28, 2023
Valentine's day business ideas
Financial Literacy

Businesses that will profit from today’s Valentine’s Day celebrations

February 14, 2023
Peter Obi
Business News

Peter Obi promises to declare war on power sector

January 16, 2023
South-East Governors name Second Niger Bridge after President, Muhammadu Buhari
Business News

What Nigerian government must do to lift people out of poverty —Taiwo Oyedele

November 18, 2022
Next Post
Inflation rate, LDR: Growing the real sector by fiat?, Rapid increase in food prices temporary – Emefiele, CBN and other industry stakeholders establish N1 billion Bankers’ Charitable Endowment Fund , How the CBN’s OMO restriction is affecting the market  , Nigerian economy to grow by 2.38% in Q4 - CBN, New CBN report shows Nigerians will reduce consumption of luxury items, Banks violating CBN’s directive on N50 charge on accounts, send contradictory messages, What is on Godwin Emefiele’s mind?, These CBN policies are contradictory and stifling on banks, What you need to know as Banks rebrand CBN intervention funds to woo borrowers, CBN extends timeframe for submission of audited financial statements by other financial institutions, CBN to launch Tertiary Institutions’ Entrepreneurship Scheme, CBN tackles cybersecurity threats as it issues guidelines for OFIs, Emefiele says CBN is leading Nigeria’s economic diversification as country now exports rice

LDR: Growing the real sector by fiat? Part 1

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • Dry Onions up 30%, pepper up 16.67% in Lagos markets as buyers and sellers react to July 2025 price swings 
  • How Fintech Infrastructure powers the modern Trading Industry 
  • UBA’s LEO becomes Africa’s First Chatbot to enable cross-border payments 

Follow us on social media:

Recent News

When you travel to your village, why do you buy yams, palm oil and bananas and return them to your city?

Dry Onions up 30%, pepper up 16.67% in Lagos markets as buyers and sellers react to July 2025 price swings 

July 17, 2025
How Fintech Infrastructure powers the modern Trading Industry 

How Fintech Infrastructure powers the modern Trading Industry 

July 17, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics