Organized Private Sector Decries Unending Grid Collapses

Prominent members of the Organised Private Sector, OPS, yesterday raised concerns over frequent collapses of the national power grid, saying the development is crippling already distressed businesses. Among the business groups that expressed concern were the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA; Manufacturers Association of Nigeria, MAN; and the Lagos Chamber of Commerce and Industry, LCCI.

'This is even as the Nigeria Employers’ Consultative Association, NECA, warned that the frequent collapse of the national grid has continued to hinder economic growth and slow down enterprise sustainability efforts, given the high energy costs businesses currently have to deal with.

The Manufacturers Association of Nigeria, MAN, said frequent grid collapse was frustrating for Nigerian manufacturers, considering the huge costs spent on re-energising production lines shut down anytime the grid collapses.

Please recall that the national grid collapsed thrice in 24 hours last week, and the power supply has yet to be completely restored across the country.

The Director-General of LCCI, Dr Chinyere Almona, who called on the government to consider privatisation of the national grid, said: “LCCI is deeply concerned about the frequency of collapse recorded by the national grid, the sole supply source of hydroelectric power nationwide.

“This year alone, we have recorded eight grid failures, with three being recorded within a week. The worsening performance of the national grid is an issue of concern to the business community.’’

Almona lamented that the relevant authorities seem to be at a loss on the root causes of the incessant collapses, with no lessons learned.

“By now, after numerous failures, the national grid managers should have identified the root causes and found lasting solutions.

“It is concerning that there appears to be no clear understanding of these causes or lessons learned from the restoration processes.

“After about 105 collapses in 10 years, power sector stakeholders should know what drives these recurring failures and how to prevent them.

“We are troubled by the apparent lack of such understanding among regulators in the power sector,” she lamented.

On the way out, Almona stated: “With businesses suffering from the burden of poor power supply, we need quick intervention actions to salvage the situation.

“We urge the government to consider privatising the national grid and support more efforts to scale up metering in the coming months.

“In finding a lasting solution to the perennial poor power supply and the recurring collapse of our national grid, the government should create the needed conducive regulatory environment, extend concessionary credit to operators in that sector, offer import waivers, and collaborate with the private sector to work together in policy formulation and implementation.”

On his part, the Director General of MAN, Segun Ajayi-Kadir, said the frequent national grid collapse is frustrating for Nigerian manufacturers, considering the huge costs spent on re-energising production lines that are shut down anytime the grid collapses.

He said: “It’s unacceptable that most manufacturers have to always shut down production lines anytime national grid collapse occurs in the country.

“To re-energise those production lines takes extra production costs, and they are still expected to be billed 250 per cent electricity tariff by power electric companies without factoring the menace causing the frequent breakdown in the national grid.”

He noted that the public hearing on the national grid collapse scheduled for Thursday, October 24, (tomorrow) by the Nigerian Electricity Regulatory Commission, NERC, is necessary if it is designed to find ways forward to stabilise power supply.

“The greatest challenge facing Nigeria’s economy currently is insecurity, and if you talk about manufacturing, the second is energy.
“There is no way manufacturing can thrive perfectly when you don’t have a steady and affordable power supply,” he stated.

In his reaction, the President of NACCIMA, Dele Oye, said the situation calls for a move towards a comprehensive and strategic privatisation of the power sector.

Oye said: “The recent spate of national grid collapses in Nigeria has raised significant concerns for our economy and the operational viability of businesses across the country.

“With the grid failing multiple times in recent months, businesses have been grappling with erratic power supply, which disrupts production lines, inflates operational costs, and ultimately affects profitability.

“The implications are dire: Prolonged outages hinder productivity and lead to lost revenue, while small and medium enterprises, often the backbone of our economy, struggle to survive under the weight of high generator costs and maintenance.

“This situation not only stifles business growth but also erodes consumer confidence and limits job creation. While the Siemens contract represents a step in the right direction toward modernizing Nigeria’s power infrastructure, it is evident that mere upgrades are insufficient.

“A comprehensive and strategic move towards fully privatizing the sector could invigorate it with much-needed efficiency, innovation, and investment.

“By unlocking private sector potential, we can enhance competition and drive improvements in service delivery that our businesses and citizens desperately need.”

Similarly, the Nigeria Employers’ Consultative Association, NECA, warned that the frequent collapse of the national grid hinders economic growth and slows down enterprise sustainability efforts.

NECA’s Director-General, Mr Wale-Smatt Oyerinde, who stated this in an interface with newsmen yesterday, urged the government to expedite action in overhauling the grid and also create the environment for private investors to invest.

He said: “It is quite worrisome that the national grid continues to collapse. At a time there is an urgent need to fast-track the nation’s industrialization efforts, we are still bogged down with constant grid collapses.

“This constant collapse hinders economic growth and slows down enterprise sustainability efforts, given the high energy cost that businesses currently have to deal with.

“We urge the government to expedite action in overhauling the grid and also create the environment for private investors to invest. The future and our potential for energy sufficiency lie with the private sector.”

Also reacting yesterday, the President of the Association of Small Business Owners of Nigeria, ASBON, Dr Femi Egbesola, said the ability of Nigerian businesses to compete internationally is being impaired as grid collapses lead to an increase in production costs.

His words: “The failure of the national grid has serious consequences for Nigerian businesses and economy. It leads to industrial output being lowered and manufacturing expenses being raised as a result of frequent power outages that interrupt production operations.

“As a result, this reduces the ability of Nigerian businesses to compete internationally as the cost of production shoots up above board.
“Additionally, many firms are forced to invest in alternate power sources, such as generators, which dramatically raise our operational expenses due to the unpredictability of power supply.

“Nigeria’s economy suffers greatly from the regular failure of the national grid. It reduces output in manufacturing and services, raises household expenses, and slows growth in the economy as a whole.

“As a result, we the business community, request and advocate for immediate and long-term responses to this issue.”