GOVERNMENT’S transfer of 17 of the 18 firms unbundled from the Power Holding Company of Nigeria to private owners on October 31 last year was applauded by many as a significant paradigm shift, as it was in line with global best practices. Optimism about a sea change in electricity output, which arose from the pledges the buyers had made to invest and turn the sector around, therefore, resonated across the country.
Ironically, the hope of Nigerians, sooner than later, dissolved into anguish. The Minister of Power, Chinedu Nebo’s media briefing on November 24, where he showcased his performance, indirectly, became a veritable forum to properly situate the crisis in the power sector. Nebo had criticised the electricity distribution companies for rejecting electricity load allocations to them and having warehouses that were empty of equipment needed to swiftly respond to customers’ demands.
Not done, the minister charged the grossly inept firms, “From now henceforth, any DisCo that rejects electricity load allocation would be sanctioned, or its licence withdrawn.” Much earlier, the National Electricity Regulatory Commission, headed by Sam Amadi, had given the DisCos a 45-day ultimatum to give pre-paid meters to consumers who had paid for them since 2011.
Apparently, these ultimatums to the DisCos are not new. In January, the minister conveyed a directive from President Goodluck Jonathan charging them to ensure that power supply to customers was significantly and visibly improved by June. He emphasised that the Federal Government “will no longer tolerate any excuse for non-performance,” and as usual, ended the engagement with a threat to revoke the licence of any errant company. Many are no longer persuaded by such executive sound and fury.
As the Nebo revelation shows, nothing epitomises the disinclination of the DisCos so involved, to service delivery, than the rejection of power loads given them. Today, most homes in the country have no electricity; they groan, while toxic fumes from generators have wiped out many families. Many industries have folded up. Others still in business are being sustained by diesel generators, which increase their production costs; a burden ultimately transferred to consumers.
From the 4,517.6 megawatts the country had on December 23, 2013, to the 3,750.73MW generated as of November 19, 2014, according to the Ministry of Power figures, it is evident that progress is eluding us in the power sector reforms, one year after the DisCos and electricity generation companies seized the power landscape. This is definitely not what Nigerians bargained for!
Yet, consumers are being made to pay bills for electricity they do not consume through the racket-induced estimated billing system, just as the tariffs are hiked periodically – no thanks to the Multi-Year Tariff Order. This is unfortunate. We do not know of any country where citizens are fleeced with the knowledge and connivance of the state.
The waywardness in the power sector has its genesis in the cronyism and patronage that underpinned the privatisation process. Former President Olusegun Obasanjo whose administration initiated the power reforms accused the privatisation handlers of selling the power firms to their “friends and families.”
This is the real nemesis. And it explains perhaps, why the DisCos flagrantly disregard the rules of engagement and countless regulator’s directives. We believe that a government that cannot enforce its rules has lost the capacity to govern. It is at this crossroads that the Jonathan administration is located.
All over the world, rules govern privatisation; just as developed economies of the West have reaped bountifully from such economic policy. If ours is an exception, then the government should have a rethink. The privatisation process hit the rocks right from the outset, when foreign firms with the requisite expertise and capital to participate were made to steer clear, due to glaring opacity and cronyism that attended the sale process.
It is an embarrassment that in spite of over $35 billion invested in power in the last 10 years, the government’s promise of achieving 5,000MW output by the end of December this year, has again been shifted to January 2015, a pattern that has marked the entire power reform roadmap. In fact, the envisaged 5,000MW is a far cry from the 200,000MW, which Nebo said in May were needed to meet national demand.
Just as Ghana has been teaching us lessons in good governance, it has once again showed Nigeria the way in the handling or managing of electricity crisis, when its president, John Mahama, sacked the Managing Director, Electricity Company of Ghana, William Mensah, two weeks ago. And what was his offence? The country’s power output decreased to 2,125MW, the worst in recent times. Ghana with a population of about 27 million has an installed capacity of 2,884 MW. Contrast Nigeria’s current 3,700MW serving over 160 million people with South Africa’s power output of 44,074.4MW for a population of 49 million, according to its Presidential Task Force in Power, then our tragic situation comes out in bold relief.
A more efficient government is a more trusted government. The Federal Government must address its own irresponsibility that has fuelled gas shortage in a major oil producing country. The National Independent Power Projects with a capacity of about 5,000MW have yet to be activated as a result. Also, not wheeled into national grid are megawatts generated by independent providers and some state governments. The Transmission Company of Nigeria and the GenCos should be made to work, just as the DisCos must be whipped into line. The government should revoke the licences of those firms that remain intransigent.
Nigeria cannot reinvent the wheel. Britain, Brazil, Australia and East European countries have successfully reformed their power sectors through privatisation, while China and India, emerging global economic powers have gone far too in raising their capacity. By just modifying power sector legal environments, they succeeded in attracting foreign investments and technical capabilities to change their economic stories.
This is the way Nigeria should go now, to end its ridiculous narrative of being Africa’s biggest economy run with generators.
