Nigeria’s power sector has been through several phases, from being handled by government to the era of privatisation.
Despite restructuring and multi-billion dollar investments, stable electricity supply has been a mirage with industries and enterprises worst hit.
To give succour to some category of businesses, the federal government’s Rural Electrification Agency (REA) initiated a project tagged Energising Economies Initiative (EEI) that is meant to give stable and affordable power supply to some clusters of Small and Medium Scale Enterprises (SMEs) with about 50,900 shop owners benefitting across markets in Kano and three other locations.
The Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN) reports about 37 million Micro, Small and Medium Enterprises (MSMEs) in Nigeria. Out of this figure, about 98 per cent are in the micro businesses category. However, most of them are struggling with high cost of energy and the instability of steady supply to drive production.
The Association for Public Policy Analysis (APPA), in its latest analysis, noted the impact of the EEI of REA under the supervision of the Minister of Power, Works and Housing.
The National President of APPA, Comrade Princewill Okorie, said the improved power services is remarkable. He said the minister, Mr. Babatunde Fashola on July 9 had lamented that “Small businesses which need very little power are not getting enough because the Distribution Companies (DisCos) cannot take the power to them.”
REA’s off-grid market projects
Daily Trust reported in March, 2018, that REA conducted a baseline survey and energy audit in September, 2017, across four economic clusters: Ariaria Market in Abia State, Sabon Gari Market in Kano State, Somolu Printing Community, and Sura Shopping Complex in Lagos State.
The report of the survey, obtained from REA, showed that the agency was installing solar power in the Kano market and gas-based technology in the three other SMEs’ clusters.
REA said over 50,900 shops and a customer base of over two million Nigerians would benefit from the projects. The total energy demand for all 50,900 shops was 36.27MW, with Somolu having the highest demand of 32MW and Sura Shopping Complex having the lowest demand of 0.83MW.
Sabon Gari market
At the Sabon Gari market, the survey identified 1.38MW current energy demand. REA deployed 1MW decentralised Solar Home Systems (SHS) but with no backup generator. It is the biggest market in the North with over 13,000 shops.
Some 250 traders surveyed in the market said they spent about N10,000 monthly on electricity and N20,000 on generator expenses individually or communally for lesser hours of supply under Kano DisCo. They now pay less and get more power as at April 2018, shortly after the minister inspected the market project.
Ariaria market
At the Ariaria International Market in Aba, Abia State, there is a 2.06MW current demand and a total demand of 6.67MW. REA installed a 5MW Compressed Natural Gas (CNG) power plant and a 2MW backup generator in the first phase. Its 11 sections have over 31,000 shops with trading activities ranging from clothing to shoe production, among others.
REA surveyed about 556 traders who said they spent about N7,000 monthly on electricity and about N8,000 monthly on generator expenses. They now spend less than half of that and enjoy more stable supply, they told the minister of power who was there in May 2018.
Somolu press
The Somolu Printing Community in Lagos has about 32MW current demand as the largest hub of commercial printing in Nigeria. About 250 of the printers surveyed said they spent over N120,000 monthly on electricity from Eko DisCo, while spending another N1m on generator expenses. REA in the first phase, installed a 5MW natural gas power plant to cover the 4.73MW energy load of the printers.
Sura complex
The Sura Shopping Complex in Lagos has 1,047 shops and about 1.5MW estimated total demand. About 200 traders surveyed said they spent N14,000 monthly on electricity and N40,000 on generator. REA will connect the complex from a power plant at the Lagos Island near it.
Comrade Okorie, in his analysis, said the EEI targeted a total of 15 markets which if successfully implemented would provide power to 85,485 shops, empower 205,000 SMEs and create 2,000 jobs during the installation and afterwards in operations and maintenance.
Providing legal justification for the project being driven by the minister, Okorie said Section 33 of the Electric Power Sector Reform Act 2005 (EPSRA) empowered the minister to issue general policy directions to the Nigerian Electricity Regulatory Commission (NERC) on matters concerning electricity.
He said, “It was on this premise that that NERC launched the Mini Grid regulation in 2017 which gave backing to the EEI projects under the REA.”
The Managing Director of REA, Mrs. Damilola Ogunbiyi, said the EEI was solely targeted at the Micro, Small and Medium Enterprises (MSMEs) across markets, shopping plazas/complexes and industrial clusters.
“The initiative is focused on providing efficient, clean and sustainable power to catchment areas that have high growth impact on the economy,” she said.
APPA said the projects would raise productivity of the MSMEs sector in Nigeria, promote higher payment collection for power operators, and that it had lower Capital Expenditure (CAPEX) requirements to deploy to target MSMEs’ customers.
Okorie also said the initiative would reduce expenditures made by entrepreneurs to procure power to enhance their productivity as Nigerians spent over N796.4bn on generator fuel in 2016 with another N813bn spent annually to buy generators.
“These funds shall be saved and channelled to other useful ventures by the entrepreneurs,” noting that the full implementation would scale up the performance of SMEs who were at the lowest ebb of economic activity in their respective communities.
“It stands to reason that if the power sector funding by the past three administrations before the current Buhari administration were targeted at small entrepreneurs, the impact would have been far more significant,” Okorie said.
Source: Daily Trust
