Although Nigeria has abundant natural gas resources, it lacks the creditworthiness to maximize its full potential.

This is according to Dr. Sam Amadi, former Chairman of the Nigerian Electricity Regulatory Commission (NERC).

He said this during his interview with TVC News on Tuesday, December 27. He further explained what he meant, saying:

  • “Nigeria is a country, so we have enough molecules for our power plants, but what we don’t have is the commerciality, the solvency. The gas-to-power market is not very solvent, we are not paying as we should. Also, taking the gas to where the generators are is a problem, so these governance and commercial issues are there.”

Some progress made: Dr. Amadi also highlighted the fact that some progress has been made when it comes to power sector reforms. He said that electricity rates are not so bad that the market does not work with them.

He further said that the challenges of Nigeria’s power sector are systemic and that distribution owners may not have the capacity to invest long-term in the sector.

More improvements needed: Amadi added that many inefficiencies need to be addressed in the short term, which can improve power supply. He said:

  • “Getting the distributors (DisCos) to remit their market contribution up to 70 or 80%, and that the gas marketers are paid up to 80% of their bill, in which case we can encourage the entire value chain . If we have the capacity of 6,000 megawatts (MW), then we should be able to supply 5,000 MW to homes and businesses every day and that will be a significant improvement in the country’s power supply.”

Dr. Amadi said that after paying attention to short-term challenges, a framework for the medium and long term can be established. According to him, the first thing to do is get non-partisans to review the national electricity policy. He said it was made in the year 2000 and the market has moved significantly.

  • “Since then, assumptions about the economy and the public sector have changed around the world, so it is not safe to make the fundamental mistake of assuming that the private sector is the answer to the challenges of the electricity sector, without having a sector. efficient public. he claimed.

Other recommendations: Dr. Amadi also advised that the incoming administration in 2023 should present a new electricity sector roadmap that will improve DisCos operations and ensure the independence of system operators who will operate on a commercial basis and market participants may have interest in ensuring that the system works very well on a non-discriminatory basis.