Nigeria’s biggest power station shows the huge problems that President Muhammadu Buhari must overcome if he is to fulfill his promise to tackle chronic electricity shortages and reform an economy in recession.
On the outskirts of Lagos, three out of six turbines lie idle at the Egbin plant, starved both of gas due to militant attacks on pipelines that supply the station – and of funds that would allow its owners to buy alternative fuels and even implement an expansion plan.
Buhari won last year’s presidential election with pledges to increase power capacity exponentially during his four-year term and meet the demands of Nigeria’s 180 million people within a decade. However, upsurge of the attacks in the Niger Delta and acute foreign currency shortages are frustrating his ambitions, along with older problems of back payments owed by the federal government to power station operators and an ageing power grid.
Buhari wants to diversify the economy away from oil, the sales of which account for two thirds of government revenue. But frequent power cuts and soaring fuel costs are forcing many manufacturers to shrink, not expand their businesses. This, along with falling crude production at a time of low global prices, is deepening Nigeria’s first recession in 25 years.
One such factory owner is Reginald Odiah, managing director of Bennet Industries which makes light fittings in Lagos. Odiah, who set up the company in 1984, said he can no longer run his factory on the mains supply and instead has to use his own generators running on imported diesel, the price of which has soared due to a dive in the Nigerian naira currency.
“It makes me sick. It has run my business down,” he said, adding that his power costs have risen by around 50 percent over the last year. “If it continues the way it is going, we may have to close.” Since January, Odiah has slashed his workforce from 150 to 18 and cut output to just three days a week. Now the factory switches to the generators for production runs because the national grid “fails you without notice”, he said, complaining of power cuts of up to 10 times a day.
Nigeria needs 10 times its current output to guarantee reliable supplies for urban and rural inhabitants alike. When he came into office in May last year, Buhari inherited a problem that has held back Nigeria’s economic development for decades. Despite holding the world’s ninth largest gas reserves, it reliably produces less than a tenth of the power that South Africa provides for a population less than a third of the size.
He had some initial success. Total power output rose from around 3,600 megawatts to a peak of 5,074.7 MW in February this year, according to the Nigeria Electricity System Operator. But then the attacks by militants, who want more of Nigeria’s energy wealth directed to their impoverished southern swampland region, took hold. Output fell close to 1,400 MW in May – far from the leap to 20,000 MW within four years which Buhari’s party pledged in its manifesto for the 2015 elections.