Severe power outages cripple Nigerian economy

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LAGOS, Nigeria (Reuters) -- Nigerian businesses said on Thursday they were being crippled by persistent power outages that have gripped the West African country in the past three weeks.

The erratic electricity supply has further compounded Nigeria's energy crisis, coming on top of seemingly endless fuel shortages in the oil-producing country.

The Lagos Chamber of Commerce and Industry, the umbrella group of businesses in Nigeria's commercial capital, said output from industries had dipped by 30 percent over the period.

"The erratic power supply is affecting every business especially in the manufacturing sector," Durodola Oladimeji, a director of the chamber, told Reuters.

Oladimeji said top officials of the influential business group led by its president, were scheduled to meet with Nigerian government officials on Thursday in the capital Abuja on the power problem.

Industrialists say production costs have risen by as much as 50 percent since the energy crisis began this year as companies have had to install their own power plants.

"But even now diesel to run the generating sets is hard to come by," said Oladimeji.

State power monopoly NEPA said on Thursday electricity generation had dropped to about 1,300 megawatts from 2,300 megawatts attained early last month.

The National Electric Power Authority (NEPA) blamed the drop on problems with its Kainji Hydro Power Station in central Niger State ravaged by floods last week, and the disconnection of its strategic southern Delta Thermal Station from the national network grid following damage to its transmission line after a pipeline fire last week.

"The two setbacks led to the commencement of load shedding throughout the country," NEPA's spokesman Mohammed Mousa-Booth said.

While the authority said it hoped to bring the hydro power plant back on stream within the next 25 days, it gave no time frame to reconnect the thermal plant back to the grid.

The energy crisis has pushed businesses to demand a speedy privatization of NEPA and state-owned oil refineries.

"Government should be serious and urgently privatize NEPA and the refineries since this will solve the problem," said Remi Kehinde, Managing Director of Mega Vision Productions Ltd.

Last July, lawmakers of the lower chamber House of Representatives, frustrated by the slow pace of privatization in the country, said they would introduce a bill to the house that would seek to scrap the National Council on Privatization.

It would be replaced with an advisory body that would drive the programme faster.

Under a revised privatization programme of the President Olusegun Obasanjo's government, the sale of refineries and NEPA is scheduled for next year.

In the meantime, Obasanjo has tried to boost electricity generation through rehabilitation of the ailing power plants and involving private power providers.

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