Lagos, Nigeria - In a move aimed at improving oversight and addressing the country's longstanding power challenges, the Nigerian government is considering handing over its stake in 11 electricity distribution companies (DisCos) to state governments, the ministry of power - Adebayo Adelabu said on Friday.
"We are committed to collaborating closely with the state ministries of power to tackle challenges in the distribution segment, considering its retail nature," Adelabu said in a post on X, formerly Twitter.
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This announcement came on December 8th, 2023, from the Minister of Power, who cited the recent signing of a new law by President Bola Ahmed Tinubu as the catalyst for this potential shift.
This law now allows state governments to not only generate but also distribute power, replacing the previous system where the federal government held exclusive rights.
Nigeria produces a mere fraction of its 12,500 megawatt installed capacity, forcing millions to rely on generators for basic needs. In other words, Nigeria has been plagued by chronic power shortages for decades, with citizens facing erratic supply and frequent outages.
The government hopes that by decentralizing control and handing over the DisCos to states, the situation can be improved through closer oversight and tailored solutions to local needs.
However, the proposal has sparked both support and skepticism. Proponents argue that state governments, with their deeper understanding of local contexts and challenges, can better manage and invest in their own power grids.
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They believe this will lead to more efficient distribution, reduced losses, and ultimately, improved electricity access for citizens.
Critics, on the other hand, express concerns about the financial capacity of some states to adequately manage and invest in the DisCos. They also worry that the transfer could lead to political interference and a lack of transparency in the sector.
The government is currently reviewing various options and conducting feasibility studies before making a final decision. The process is expected to involve extensive consultations with stakeholders, including state governments, industry players, and civil society groups.
The potential handover of the DisCos marks a significant step in Nigeria's ongoing efforts to address its power woes. While the long-term impact remains to be seen, it is a clear indication of the government's commitment to tackling this critical challenge and bringing reliable electricity to all Nigerians.