Nigerians Are Spending Almost Three Times The Cost Of Electricity On Alternative Sources Of Power.

Abuja, Nigeria 4th August 2015Power poll results released by NOIPolls Limited for the second quarter of 2015 revealed that Nigerians are spending almost three times the cost of direct power supply from Power Distribution Companies (DISCOs) on alternative sources of power. Findings revealed that in a 15-month period (April 2014 to June 2015), Nigerian households typically spent between 3,023 to 3,726 on direct power supply, while spending between ₦7,866 and 12,351 on alternative sources of power monthly. This brings the average monthly expenditure of Nigerian households on direct electricity supply to about 3,397, while average expenditure on alternative sources stands at 9529 monthly. Moreover, in the use of alternative sources, other minor costs such as cost of repair, maintenance and replacement of parts may be considered.

More findings revealed that there has been a steady increase in the average monthly expenditure of households on alternative sources of power from Q4, 2014 to Q2, 2015. This steady increase could be a direct effect of severe power shortage experienced within this period, especially in Q2, 2015. Moreover, findings from previous NOIPolls power tracking report revealed that Q2, 2015 witnessed the worst power supply, as only an average of 27% of Nigerians saw an improvement in power supply in their area.

In view of these findings, the dependence of Nigerian households on alternative sources of electricity (such as generators) adds to the financial burden of running household activities or remaining functional as a business. This in turn creates a ripple effect, bringing about skyrocketing prices of goods and services, and general high cost of living, thereby causing untold hardship for more than half of the entire population of Nigeria. Sadly this situation will continue to linger for as long as power supply shortage exists in Nigeria.

Brief background

Going as far back as 1999, Nigeria had 79 electricity generation units out of which 19 were operational with an average daily generation and distribution of 1,750 MW. For the period 1989 – 1999, no new electric power infrastructure was constructed, furthermore, during the ten-year period, there was a lack of development which further aided in pushing the sector into the abyss of rot and decay it is still waddling in in current times. The Federal Government in 2005 embarked on a sector reform through privatization to ensure adequate and equitable generation and distribution of electricity while also setting up a commission to serve as the regulatory body overseeing the sector. This was done to ensure fair pricing and sufficient generation, transmission and distribution of electricity across the nation. These ongoing reforms in the Nigerian power sector have generated a lot of interest both locally and internationally with polarized public opinion.   

In spite of the successful unbundling of the National Electric Power Authority (NEPA) and the sale of its assets to private investors as generating, transmissions and distribution companies, the situation of power has not experienced much transformation as Nigerians are still experiencing epileptic power supply and spending over three times the monthly charge on  alternative sources of electricity.

With the aim of monitoring the progress made so far in the power sector reforms in Nigeria, NOIPolls introduced the Power Polls in 2013 to explore the perception of Nigerians towards the power sector reforms. The polls are conducted monthly to explore the amount of power supply received daily and expenditures made on power supply, as well as the state of power supply to households and its effect on consumers especially in the use of alternative sources of power and its financial implications.

In conducting the power polls, respondents were asked 5 specific questions every month; two of these questions (centered on the expenditure of households on direct power supply as well as on alternative sources) will be discussed in this release. The result presented is a 15-Month (April 2014-June 2015) tracking of household expenditures on power. For a full report, please contact NOIPolls on enquiries@noi-polls.com

Key Findings
Monthly Tracking of Average Household Expenditure on Direct Power Supply

With the aim of tracking the cost of power supply for each month, consumers were asked, “On An Average How Much Do You Pay for Power Supply"? findings revealed that within a 15-month period (April, 2014 – June, 2015), Nigerian household typically spent an average of about 3,397 on direct power supply on a monthly basis. The month of June 2015 witnessed an increase in expenditure on power supply from 3,023 in May to 3,520. Previously, the month of March 2015 recorded the highest average expenditure on power supply with 3,726, while May 2015 recorded the lowest at 3,023. Thus on average, Nigerian households typically spent between 3,023 to 3,726 on direct power supply within the period in view.

Further analysis revealed that, throughout the 15 months in view (April, 2014 - June, 2015), a higher proportion of Nigerian households (average of 42-percent) paid between 1,000 - 3,000 for power supply. Also, a considerable proportion of households (average of 25-percent) paid between 3,001 - 5,000. An in-depth analysis of  the monthly tracking revealed that April 2014 and May 2015 recorded the highest proportion of households that paid between 1,000 - 3,000 on direct power supply from DISCOs. In addition to this analysis, it was recorded that there was an increase in consumers who paid between 3,001 - 5,000 between May (24 percent) and June (29 percent) 2015.  

Quarterly Review of Household Expenditure on Direct Power Supply

A quarterly review of household expenditure on direct power supply revealed that the highest average monthly expenditure of households on power was obtained in Q1, 2015 at 3,613. Following this, a marked decrease was seen in household expenditure on power supply in Q2, 2015 at 3,319.

Average Expenditure on Alternative Sources of Power Supply

To ensure the sustenance of household activities and businesses, majority of Nigerians have adopted the use of alternative sources of electricity to their homes through the use of solar power installations, inverters and generators. The use of these alternate sources has resulted in additional financial strain to households and businesses, forcing them to direct resources that could have been channeled to other avenues into alternative means of generating power.

Household expenditure on alternative sources was also measured and findings revealed that Nigerian households spend an average of 9,529 monthly. The lowest household expenditure on alternative sources was recorded in April 2015 at 7,866; while the highest was recorded in April 2014 at 12,351 followed by May 2015 at 12,242. These findings therefore imply that Nigerians typically spend between 7,866 and 12,351 on alternative sources of power monthly.

Quarterly Review of Households  Expenditure on Alternative Sources of Power Supply

Quarterly review of household expenditures on alternative sources revealed that Q2 and Q3, 2014 recorded the highest average monthly expenditure on alternative sources with 11,198 and ₦ 9,641 respectively. In addition there has been a steady increase in the average monthly expenditure of households on alternative sources of power from Q4, 2014 to Q2, 2015. This steady increase could be a direct effect of severe power shortage experienced within the period especially in Q2, 2015. Moreover, findings from previous NOIPolls power tracking report revealed that Q2, 2015 recorded the worst power supply, as only an average of 27% of Nigerians saw an improvement in power supply in their area.

In conclusion, survey findings revealed that from Q2, 2014 - Q2, 2015, Nigerian households spent almost three times the cost of direct power supply from Power Distribution Companies (DISCOs) on alternative sources of power. Results also revealed that between Q2, 2014 and Q2, 2015, Nigerians spent an average of N3,302 – N3,613 monthly on direct electricity supply while spending between ₦ 7,866 and ₦ 12,351 on alternative sources of power monthly.

Survey Methods

The opinion poll was conducted from Q2, 2014 to Q2, 2015. It involved telephone interviews of a random nationwide sample. A total of 15,000 phone-owning Nigerians aged 18-years and above, representing the six geo-political zones in the country, were interviewed. NOIPolls Limited is No1 for country specific polling services in West Africa. We conduct periodic opinion polls and studies on various socio-economic and political issues in Nigeria. More information is available at www.noi-polls.com

Disclaimer

This press release has been produced by NOIPolls Limited to provide information on all issues which form the subject matter of the document. Kindly note that while we are willing to share results from our polls with the general public, we only request that NOIPolls be acknowledged as author whenever and wherever our poll results are used, cited or published.

NOIPolls hereby certifies that all the views expressed in this document accurately reflect its views of respondents surveyed for the poll, and background information is based on information from various sources that it believes are reliable; however, no representation is made that it is accurate or complete. Whilst reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any views expressed herein by NOIPolls for actions taken as a result of information provided in this report. Any ratings, forecasts, estimates, opinions or views herein constitute a judgment as at the date of this document. If the date of this document is not current, the views and content may not reflect NOIPolls’ current findings and/or thinking.

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