The latest quarterly report from the Nigerian Electricity Regulatory Commission (NERC) shows that average daily electricity production declined by 4,3 percent quarter-on-quarter (q/q) to 4,508 megawatts (MW) in the second quarter of 2022.
This is compared with 4,712 MW in the previous quarter.
“Considering the frequent grid disruptions last year, the drop does not come as a surprise,” FBN Quest stated.
The market watcher stated the level of power generation is exceedingly low for a developing country like Nigeria, the West African nation with a population size of over 200 million people.
Although significant portions of the sector’s value chain, including generation and distribution, were privatized in 2013, the supply of electricity to homes and businesses has not significantly improved.
According to the 2022 SDG7 energy tracking report, Nigeria has the world’s largest energy deficit, with 92 million people lacking access to power.
This compares with the Democratic Republic of Congo and Ethiopia, with 72 million and 56 million respectively, according to FBN Quest.
The energy sector is faced with various challenges which have continued to stall power generation in the country.
Some of the challenges include gas supply shortages, constant power losses, deficient traffic policies and electricity subsidies.
“Nigeria’s huge metering gap continues to remain a key challenge in the industry,” FBN Quest stated.
According to the Nigerian Electricity Regulatory Commission (NERC) report, out of almost 13 million customers registered by the commission, just over 4,9 million customers had been metered as at the second quarter of 2022.
This represents a metered customer rate of 38,7 percent and a metering gap of 61,3 percent.
According to NERC, electricity distribution companies are incurring losses due to a combination of energy theft, inefficient distribution networks and customers’ unwillingness to pay their bills.
The average aggregate technical, commercial and collection losses of energy distribution companies is expected to exceed N600 billion (about US$1,3 billion) in 2023, according to a report by the Nigerian Energy Support Programme.
The huge funding shortfall remains a source of burden for the federal government and a major threat to the growth of the Nigerian economy.