Nigeria exports N23b electricity to neighbours who fail to pay fully for it
By Jeph Ajobaju, Chief Copy Editor
Local consumers have railed against the export of N23.13 billion electricity to neighbouring countries in 2022 amid darkness across Africa’s largest economy which generates just about 4,000 mega watts (mw) for its 220 million citizens.
Nigerian Electricity Regulatory Commission (NERC) data shows Nigeria exports electricity to Benin Republic, Niger Republic, and some special consumers.
The total export value in 2022 was $50.98 million (N23.5 billion at the official exchange rate of N461/$ as of 2022). The international consumers paid $32.69 million an (N15.1 billion).
The neighbours failed to pay a total $18.29 million (N8.4 billion), apart from special customers who did not pay N792.6 million in 2022, according to the power regulator.
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Nigeria has world’s highest rate of unelectrified citizens
Nigerian consumers expressed displeasure with the situation where they cannot get enough supply but Nigeria exports power to neighbouring countries who fail to pay for it.
“A World Bank report puts the total number of Nigerians that are not connected to the national electricity grid at about 90 million, out of about 220 million Nigerians. This is about the highest in the world,” said Uket Obonga, Nigeria Electricity Consumer Advocacy Network (NECAN) National Secretary, per The PUNCH.
“China, with a population of 1.4 or 1.5 billion people, has about 68 million Chinese persons who are not connected to electricity. Now, compare that to the 90 million people in Nigeria that are not electrified.
“But despite that, you are now exporting such a scarce commodity that your people desperately need. What kind of economic sense is that?
“When you hear such things you wonder whether it is on planet earth that it is happening. The people behind that idea, what are they thinking?”
The NERC explained in the fourth quarter of 2022 (Q4 2022) that “Transcorp-SBEE and Mainstream-NIGELEC received invoices of $3.44m and $5.5m respectively from MO (Market Operator) and made remittances of $0.93m (27.04 per cent) and $5.44m (98.9 per cent) respectively.”
SBEE is Société Beninoise d’Énergie Electrique, a Benin Republic power firm. NIGELEC, meaning Société Nigérienne d’Electricité or Nigerien Electricity Society, is a power utility firm in Niger Republic.
NERC data implies total remittance from Transcorp-SBEE and Mainstream-NIGELEC in Q4 2022 was $6.37 million, while they failed to remit $2.57 million.
“No remittance was made to the MO by Paras-SBEE and Odukpani-CEET against invoices of $3.03m and $2.02m respectively. The non-settlement of market obligations by this category of market participants should be a call to action for MO to activate relevant safeguards for remittance shortfalls,” the NERC said.
The two international customers in this category failed to pay a total $5.05 million in Q4 2022.
The NERC said in Q3 2022, Transcorp-SBEE received from the MO an invoice of $1.85 million and paid $1.2 million (64.96 per cent), Mainstream-NIGELEC ($5.67 million, paid $5.55 million or 97.87 per cent), and Odukpani-CEET ($1.71 million, paid $5.55 million or 97.87 per cent).
The countries paid a total $8.42 million, leaving a balance of $0.81 million in Q3 2022.
“No remittance was made to the MO by Paras-SBEE against an invoice of $1.92 million. The non-settlement of market obligations by this category of market participants should be a call to action for MO to activate relevant safeguards for remittance shortfalls.”
“In 2022/Q2, Transcorp-SBEE and Mainstream-NIGELEC received invoices of $2.42m and $5.56m from MO and remitted $2.42m (100 per cent) and $5.55m (98 per cent) respectively.
“During the same period, Ajaokuta Steel Company was invoiced N264.76m and N66.71m by NBET (Nigeria Bulk Electricity Trading Plc) and MO respectively, However, it made no remittance.
“Paras-SBEE and Odukpani-CEET also received invoices of $2.39m and $2.03m respectively from MO during the period but no payment was made by these customers,” the power sector regulator stated.
The NERC said the non-settlement of market obligations by this category of market participants should be a cause for MO and NBET to activate safeguards for remittance shortfalls.
It also disclosed:
- No remittance was made by Ajaokuta Steel Company for invoices of N391.65 million and N69.45 million issued by NBET and MO respectively in Q1 2022.
- The international customers remitted a total $9.98 million in Q1 2022, while the amount unremitted was $3.51 million.
“During the same period (Q1 2022), bilateral customers including Paras-SBEE, Transcorp-SBEE, and Mainstream-NIGERLEC received invoices of $2.72m, $2.74m and $4.61m from MO and each remitted $2.72m (100 per cent), $2.74m (100 per cent), and $4.52m (98 per cent) respectively.
“Odukpani-CEET received an invoice of $3.42m from MO during the period but no payment was made by this customer.”
Why export power when Nigerians need and can pay for it?
Obonga wondered why electricity is exported despite the ability of Nigerians to pay for it.
He said the joint monthly revenues from two or three power distribution companies (DisCos) would surpass the N23 billion garnered from the international customers in entire 2022.
“You have a large family and your resources are very meagre to take care of them. Meanwhile, your people are starving of hunger, and the little resource that you have, you say you are exporting it. How can that be explained?
“It is not that your people or Nigerians cannot afford to pay. As we speak, a Disco raked in about N15 billion in one month, made N14 billion in another month, and you now prefer to leave these Discos and wheel electricity to people who will give you N23 billion in a year?
“And you didn’t even recover all the money, since some of them haven’t paid completely. Well, summarily I’ll say it is an avenue for corruption and the new government of President Bola Tinubu should look into it thoroughly.”
NERC explains reason for power export
NERC officials explained the export of electricity from Nigeria to neighbouring countries is based on agreements.
“There are certain conditions that led to the export of electricity to these countries and it is an obligation that Nigeria has to fulfill. This has been explained by senior government officials before,” said one of the NERC sources, who pleaded not to be named because he was not authorised to speak on the issue.