Yesterday, a bill for an act to criminalise the importation, selling and usage of generators in Nigeria scaled the first reading on the floor of the Senate. The bill was sponsored by Senator Birma Enagi from Niger State and he prescribed a 10-year jail term for importers and sellers of generators. However, the bill excludes importers of and sellers of generators meant for power essential services.
The exemption includes generators meant to serve medical purposes in healthcare facilities, airports, railway stations, elevators, escalators, research institutions and such facilities that require 24-hour electric power supply. The bill is intended to curb the menace of environmental pollution and force an improvement in power supply within the country.
However, as expected, the bill is already being met with stiff opposition from major stakeholders. For example, the Lagos Chamber of Commerce and Industry (LCCI) challenged the Senate to focus on proferring solutions to fix the erratic state of power supply in the country rather than concern themselves with placing a ban on importation of generators into the country.
That said, we note that power supply in Nigeria ranks as one of the poorest across the globe. According to the World Bank, only 54.4% of Nigerians have access to any form of power supply as at 2017 which is below global average of 88.9%. It is important to note that the access enjoyed by the 54.4% Nigerians remains erratic and largely inadequate. Several businesses have been crippled by the cost of alternative power sources to run their businesses.
[READ MORE: Driving tax revenue growth)
The power sector in Nigeria is riddled with several challenges across the different segments of the value chain including generation, transmission and distribution. The generation phase of the power value chain has been riddled with inadequate gas supply and poor infrastructure to operate close to full capacity. The transmission system remains archaic and has recorded several total breakdowns which have hindered power generation as well as distribution.
Meanwhile, the distribution channel is currently combating inadequate metering, minimizing ATC&C losses, and power theft by consumers. Thus, we think lawmakers should focus on assisting the executive in any capacity to solve the power riddle that has faced the nation since its existence.
The Federal Government recently signed a deal with Siemens which has committed to invest significant sums across the power value chain. However, while we recognize resolving Nigeria’s power problem is no walk in the park, attempting to ban the alternative energy source for Nigerians in the face of poor power supply appears quite poorly thought out.
We think the bill would struggle to scale through as power brokers prevail on the Senate to quash the bill. Furthermore, we note several political bigwigs are invested in the business of generator importation in Nigeria, thus, we expect pressure from these bigwigs to put the bill to bed.
CSL STOCKBROKERS LIMITED CSL Stockbrokers,
Member of the Nigerian Stock Exchange,
First City Plaza, 44 Marina,
PO Box 9117,