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Power Minister raises alarm over Nigeria’s rising inflation

The Minister of Power, Chief Adebayo Adelabu, has raised the alarm over Nigeria’s rising inflation which he blamed on the rising cost of energy in the country.

He said the cost of energy is raising the cost of commodity production in the country and believes reducing the cost of energy will go a long way to reduce cost of production and inflation rate.

Speaking at the inauguration of the 352.24KWP Interconnected Mini Grid Project by PowerGen Toto Community, Nasarawa State on Thursday, Adelabu described rural-urban migration as a threat to food security, which the government will checkmate with the provision of electricity for everyone.

The minister said if rising cost of production does not get urgent solution, businesses will collapse.

He said: "The cost of energy is a major part of the escalating cost of commodities in Nigeria. If you are able to reduce the cost of energy, I believe your total cost of production will reduce automatically.

"And once that cost of production reduces, it will also reduce the prices at which we offer all these goods and services to our people, when the prices reduce, it enables us be able to afford to buy all these things and its direct impact on reduction of inflation.

"Inflation today is in the region of 26 to 27per cent. We cannot continue like that. It is not only a threat to household affordability but to business continuity.

"Businesses will collapse if costs keep increasing because not only they wouldn't be able to make profit they won't be able to cover their cost."

Adelabu promised to keep providing electricity to rural areas to reduce migration to the cities.

He identified lack of electricity as one of the reasons rural dwellers leave for cities.

"We need to reduce the trend of rural urban migration. It is not desirable. It is a threat to our food security in the country. Everybody leaves the village and you all want to enjoy light in the city.

“We must bring the light, power to the people in the village. And this is what we are doing today.

"The mini-grid we are inaugurating today is therefore a beacon of hope and a living proof of our commitment to reinvigorate the power sector, as it symbolizes our pledge to provide affordable energy to our rural communities and empower our citizens, regardless of their economic status," he said.

Adelabu said the pilot project in Toto was over 2000 connections that was impacting on over 183,800 people.

"Over 2000 connections in a community like this. And that is impacting on 180,000 people, precisely 183,800 people," he said.

The project, said one of the beneficiaries, a table water factory operator, Abubakar Nasir, has reduced the cost of energy by 70per cent.

But describing electricity as dividend of democracy, the minister said, "irrespective of your tribe, religion and economic status, we are one Nigeria and must enjoy this dividend of democracy together.

"To the people of Toto and the people of Nasarawa State, this mini-grid is for no one else but you to enjoy."

Speaking, AEDC Managing Director, Mr. Christopher Ezeafulukwu described the project as a unique catalytic interconnected mini-grid project; a project that was initiated in 2020 by AEDC to explore innovative ways to better serve its customers.

He said the project was borne out of AEDC’s desire to provide more reliable electricity supply to underserved communities like Toto.

AEDC, he said, "had received some support from the United States Trade and Development Agency (USTDA) to explore innovative business models that would see us, amongst other things, augment grid supply with off-grid sources such as mini-grids. We were quite excited when our partnership with PowerGen provided us the prospect of validating the Rural Interconnected Mini-Grid business model that had been developed through the generous support from USTDA and Rocky Mountain Institute (RMI).

"The choice of Toto Community in Nasarawa State for the pilot project was not difficult for us and our partners to make, given the economic potentials of the Community, which had been underserved.

"Even at the conception stage, we could envision the massive transformative impact a successful interconnected mini-grid project would have on Toto.

"We are indeed very glad that our vision at AEDC has come to fruition and the journey we embarked upon with our worthy partners, has been successfully completed."

The Managing Director said the successful execution of this unique interconnected mini-grid project by AEDC in collaboration with PowerGen and REA is a testament to the renewed commitment to optimize renewable energy and off-grid opportunities to complement the grid capacity to ensure sustainable electricity supply to our esteemed customers.

He said this model will help deal with the challenges posed by the undeniable fact that macro-economic realities of today make it commercially unviable for Distribution Companies to serve some locations within their coverage areas under the current grid arrangement.

He said AEDC will leverage this success to forge stronger partnerships and collaboration that would see the company execute more of this type of projects.

Meanwhile, the Rural Electrification Agency (REA), Engr. Ahmad Salihijo Ahmad said President Bola Tinubu has succeeded in opening up the power sector to even more investment opportunities and participation, while providing the needed decentralized system for State Governments to optimally participate in the electricity market, across the entire value chain.

According to him, since the passage of the new Act, the Federal Ministry of Power continues to galvanize strategic multi-stakeholder engagements targeted at optimizing the essence and objectives of this solution-focused framework through the leadership direction of the minister.

He said: "We have the opportunity to take the minister off-grid to an actual REA project. In the last couple of weeks, we have had the opportunity to provide comprehensive briefing to the Minister.

“We are happy to be here together in Toto, Nasarawa to assess these projects and rejoice with the beneficiaries.

"Secondly, at 352.24Kwp, this is one of the nation’s largest inter-connected mini-grid and we are glad that as an Agency, we had the mandate to implement this very important project through the Nigeria Electrification Project."