Nigeria’s electricity woes have prompted a significant shift in policy. The Nigerian Electricity Regulatory Commission (NERC) has directed a reduction in electricity sales to overseas customers in an effort to bolster domestic supply.
The decision stems from frustration with the current grid management practices. The NERC argues that prioritizing exports under bilateral contracts has led to “significant hardship” for Nigerians who face frequent power cuts.
To address this, a cap of 6% has been placed on the total available grid generation allocated to international customers for the next six months. This move aims to redirect more electricity towards domestic needs.
While the policy prioritizes Nigerians, it may create challenges for the power sector. Analysts warn of potential operational difficulties for generation companies and potential contract disputes. Additionally, the loss of revenue from overseas sales could strain finances.
The decision comes amidst a backdrop of chronic power shortages in Nigeria. Despite recent tariff increases for some domestic customers, power companies are struggling to meet even contracted supply levels.
Furthermore, lax enforcement of grid regulations and outstanding debts from international customers are cited as contributing factors. A 2023 report by NERC revealed over $12 million in unpaid debts from international clients.
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