The Score Card: Power, Fashola Missing The Point




Babatunde Fashola
Nigeria’s Minister of Power, Babatunde Fasholaunde Fashola,

The President Muhammed Buhari’s Government is over one year in government, and it will not be out of place to assess the performance of the Government especially in the light of the scorching economic realities Nigerians are suffering. Is there any hope or succor in sight?

I am compelled, to look at the performance of the Government from the scope of power, considering its vital and necessary importance especially in the life of Nigerians and more importantly the promises the Government made, to drive industrialization and positive economic reforms.

 

IMPORTANCE OF POWER

There is no doubt that electricity plays very important and indispensable functions in the life of the citizens of any nation, as well in the economic growth and development of any nation. Electricity power drives both social and economic life of the citizens, both in the public and private sector. It is the duty and responsibility of any Government under both the social contract agreement and under the Constitutional policies and objectives of the state to provide and ensure steady, affordable and reliable electricity supply to the citizens, and also to drive social, economic and industrial growth. The need for a steady, affordable and reliable electricity supply never be underscored.

Steady, affordable and reliable electricity supply is the bedrock of industrialization and commercialization. Its role in driving economic growth goes without saying.  Industrialization is the different between under-developed, developing and developed nations. Dr. Waheed Olagunju, the acting General Manager of of Industry, when delivering thought provoking speech, made a very brilliant, facts supported analysis of the effect of industrialization on the economic growth of a nation. In the 60’s and 70’s, Nigeria was one of the biggest economies of the world, far ahead of Singapore. Nigeria’s reliance on oil revenue was 20% and on other sources at 80%, while Singapore’s reliance on oil revenue was 80% as against 20% from other sources. Now the reverse is the case, and Singapore is a far better economy than Nigeria, even in the face of our debase GDP. This was as a result of the Singaporean Government strategic industrialization policies. Underlying their industrialization is a steady, affordable and reliable electricity power supply.

STATE OF THE NIGERIA POWER SECTOR

In the 60’s and 70’s, in the days of “ECN” Electricity Company of Nigeria, through to the days of the Nigeria Electricity Power Company , when Nigeria Population was in the region of 50million and 70million, we have hydro power generating system, that supply the nation’s electricity needs. Even though electricity generation was not completely stable, it was more regular and more affordable. The influx and noises from generating sets as we have now, was not in existence then.

As the population continues to grow and the country witnesses increasing rural to urban migration, which is not met with corresponding  expansion in the electricity generation and supply, the reliability and regularity in power supply and distribution  begin to fall. This fall was continuous until it got to an alarming state and called for serious concern. This era witnessed the influx of electricity generating sets into the country, and soon, it became a thriving business importing generating sets into the country from all over the world, and this gave birth to a cabal, profiting from the poor electricity state, and do not want to run out of business.

In the heat of all these developments in the power sector, various Governments have made attempts to address the situation, made reforms and policies, with billions of Nairas appropriated, allocated and expended, but the problems seems to have defiled all forms of solutions proffered.

To me, the reason is simple, the solutions proffered, are not matching enough for the problems they were proffered to solve. With an ever increasing population, and increasing rural urban migration, and no corresponding expansion or increase in power generation, and in the face of a thriving electricity generating set importation business, any solution proffered is mere cosmetics, and self-serving and at the expense of tax payers’ money, if it does not look at increasing power generation through alternative sources, and reduce over reliance on the traditional hydro power generation system. The creation of the Power Holding Company of Nigeria did little or nothing to help the dwindling power generating and supply situation, and the reason is obvious.

With less than 5000 Megawatts, to serve a population of over 150 Million people, and still growing, in 36 states, covering about 600 Local Government areas, a steady, regular, affordable and reliable electricity supply only be a mirage.

The billing system itself is filled with so many irregularities, and bedeviled with a lot of inhibitions, characterized by inability of PHCN officers to access and read consumers meters, irate estimated billings, and backlog of unsettled billings.

There appeared to be hope and relief in sight when the Jonathan Administration, embarked on the privation of PHCN, and we saw the birth of GENCOS (Electricity generating Companies) and DISCOS (Electricity Distribution Companies).

THE PRIVATISATION EXERCISE

The privatization exercise purport to transfer power generation and distribution from the hands, ownership, concern, control and management of Government, to private  investors, with the objective of driving efficiency, affordability and reliability in the sector. This was a welcome idea, because it is the norm in other developed countries of the world, where it worked efficiently.

The exercise was purportedly done through tenders, biddings, and selections, but as things stands now, it is very obvious that the exercise was a complete sham. Little wonder then, that years after the exercise, the power supply situation in the country, is worse than it was before the exercise.

Like what we have in the telecommunication sector, one would expect to see the running, management and control of the most vital sector of the economy, taken away from the control of Government, in the hands of electricity generating giants like GE (General Electric) with proven integrity and performances, or others in its class, with proven technical and financial muscles, like we have MTN, ECONET spinning off the privatization in the telecommunication sector. If this had been the case, the power sector, like the telecoms sector by now would have recorded many points in its drive to providing reliable, affordable and regular power supply to Nigerians, just as we have in the telecom sector. But as things stand currently, it is obvious that this is not the case.

I will like to believe that the most cardinal conditions for the selection of winners in the bidding exercise for appointment of Gencos and Discos and award of licenses should be proven demonstration of technical and financial capacity and capability to generate electricity and finance the generation and distribution of electricity. I do not see, any indigenous Company or entity that has demonstrated the capacity and ability to generate large quantity of electricity and finance the distribution of same, without a defined partnership with trusted and proven names like GE , and as the situation currently stands, the facts speaks for itself.

For an exercise that was carried out by, and under a government that was adjudged and confirmed as corrupt with impunity, it is not surprising that the exercise was a complete and monumental sham, allocating rights and licenses to companies of cronies and friends with no proven ability to perform or achieve the set objectives of the privatization and deregularisation exercise. Our infrastructures were sold to Gencos, who have no idea or ability to generate any extra power, but only relying on the existing power generating sources, years after they took over. We have Discos that do not have financial resources to drive a better distribution system away from what they met on ground. They couldn’t even afford to ensure adequate provision of prepaid meters, but rather calling for increase in tariffs to raise money to finance their operations, and thereby passing the bulk on the already impoverished Nigerians even in the face of dwindling electricity supply.

Over 2years of taken over by the Gencos, no solar farm has been constructed, no addition hydro power generating system have been developed, neither is there any attempt to explore bio electricity generating system as done in other countries of the world to boost the existing capacity as would be expected, but rather, what we have is reliance on the existing, already inadequate, unreliable system.

The country still boast of less than 3000 Mega watts of electricity supply on the national grid; which is what the Gencos shared to the various Discos nationwide to share among the Nigeria population. With this situation, one then wonders, what then the essence of the privatization is in the first place, since apparently the privatization did not provide a shift away from the status quo. Nothing has changed as far as improvement on electricity supply is concerned. The only thing that has changed is that Nigerians are being squeezed and forced to pay for electricity they are not consuming, while enjoying less supply of the commodity but paying more, with increase in tariffs.

The Discos could not provide prepaid meters to consumers, estimated bills are getting crazier. Consumers are compelled to pay services charges, even for period their apartments are vacant and not in use, even after a Court order declaring the imposition of service charges illegal.( this only happen in Nigeria). In all these, the Nigeria Electricity Regulation Commission (NERC), the regulatory authority, is mute on it. The shocking development is the approval of the increase in tarrif allowed and sanctioned by the Minister. In my apartment, my electricity monthly charges l used to be N9, 400.00, it was increased to N15, 800 and again to N24, 500, and I don’t know, what amount will be on the next bill. The only thing I know for sure is that while the monthly charges are increasing, the electricity supply is decreasing.

With the supply to the national grid fluctuating between 4000- 2500 Megawatts , and sometimes lower, I cannot be surprised as to why I had to go days without electricity at all, but I am rather surprised why my monthly charges is increasing astronomically, while the is no corresponding improvement in the supply of electricity. The Gencos and Discos are having a field day extorting Nigerians and grounding businesses, with the support and backing of the Government.

BABATUNDE RAJI FASHOLA, AS THE MINISTER OF POWER.

After a very long time taken by the President, General Muhammad Buhari (Retired), to appoint his ministers, and it was assumed that he did his homework diligently, when he announced the former Governor of State Babatunde Raji Fashola as the Minister of Power, Works and Housing. I still can’t find a rationale behind that decision. Out of over 160 Million Nigerians, how and why  will the President saddle one individual with the responsibilities of ministering three sensitive portfolios like power, works and housing at the same time.

With his track records and performances in the past, and with his political and patriotic will coupled with his intelligence and technocratic feat, I have no doubt that the man is a man of result, focus and ability. He has proven integrity, but he is just human, and not machine. All the same, I still had hopes in his ability to deliver, knowing that his job in the ministries handed over to him, are almost a work over , only if he can clearly diagnose the problems and figure out what need to be done to fix them. However, months after his taken over as minister, I see the man grudging under the weight of the ministry of power alone, not having done anything on housing and works.

In my thinking, with the Fashola that I believe that I know, my expectations from him, was the firstly, he will take deep look into the privatization exercise, call for a review of the exercise, and demand that all the Gencos and Discos demonstrate their technical and financial ability to fulfill the objectives of the privatization exercise or recount the exercise. But, nay, he allowed himself to be cornered and sandwiched by the power cabals that hijacked the privatization in the first place, under a corrupt filled exercise, and we saw him canvassing for increase in tariffs for them. In his words, trying to justify why he supported the call for increase in tariffs; he said that before now, he was against any idea to increase the tariff, and his position has always been against increase in tariffs. His position was a clear no. But that when he discussed the issue with the Executive Secretary of NERC, he advised him to listen to the agitators, which are the Gencos and the Discos. That it was after listening to them that he became convinced to support the increase in tariff. This line of thinking, with the Fashola that I know, I found a little bit disappointing.

Allowing and even considering the increase in tariff, to my mind, is like putting the Cart before the horse. It’s like asking the already impoverished Nigerians to provide the funding needed to supply them the electricity that they will still pay for in advance. In other words, asking Nigerians to finance the business of the Gencos and the Discos. Nigerians are been told that electricity supply will improve, that the supply to the national grid will increase to 10,000 Megawatts in the near future, so Nigerians should be patient, yet the Government cannot be patient till then to increase the Tariff. Electricity supply is falling every day, to its ever lowest of about 2,500 Megawatts, yet, tariff is increasing to its highest ever of average of N25,000 per month, and this is been supported by the Government.

It is very obvious that the Gencos and the Discos ,have failed in demonstrating that they have the technical and financial strength to drive the power sector, as anticipated and expected, the only logical thing to do , is for the Government to take over from them, withdraw their licenses, and issue them to Companies that can demonstrate that they have the technical and financial muscle to drive the desired change in the power sector, or at best give the Gencos and Discos ultimatum to seek technical and financial partnership or risk losing their licenses. It is only logical, that the electricity supple be improved at least with substantial improvement before even thinking of increasing tariff. Then and only then can a call for increase in tariff can be lawful, and even at that, such an increase must be reasonable.

Privatisation should usually come with de-regularisation, and brought about healthy competitive environment, as oppose to monopoly, so as to allow the forces of supply and demand to freely play out, especially in determining the appropriate pricing, as we have in the telecom sector. What we have right now, is not a level playing ground, that allows for a healthy competition, but rather, a regulated monopolistic environment, leaving Nigerians at the mercies of arbitrary increase in tariffs with Government support.

When Nigerians, elected to vote out the PDP Government in favour of the APC Government, they voted for change, a change from the current state of things, to a better state, not a reversing state.. The APC Government made monumental promises, filled with visions and better lives for Nigerians. Making Nigerians to pay exorbitant tariffs for electricity that is not improving, and with no signs that it will improve is clearly far from the promises made to Nigerians. The current state of our electricity supply as it stands today and he sky rocketing tariff is  not the one that promise the capacity of driving industrialization, but rather one that has the potential of grounding businesses and discouraging both local and foreign investments, as currently being experienced already , especially with the current increase in pump price of petroleum products.

I have no doubt in my mind that with the current capacities and abilities of the Gencos and Discos as we have, there is no solution is sight. The only way forward is that the status quo must change. The Gencos and Discos must be compelled and regulated to up their games, and desist from extorting Nigerians to finance their operations and profiting there from without corresponding services to Nigerians. They need to seek partnership with financially and technically sound and proven foreign firms to develop and sustain their operations in the areas of power generation and distribution. There is the need for the country to seek and explore alternative power generating systems, and reduce our over reliance on hydro power generating system and gas.

Also, the era of estimated billings must stop, and Nigerians should be made to pay only for what they consume. Service charges are illegal, unlawful and inappropriate and should not be allowed under any guise. NERC and NCC should wake up from their slumber and regulate properly to protect Nigerians. Prepaid meters must be free and made readily available, if the Discos must demonstrate their readiness, willingness and capability.

 

Oseini Wale Bamigbaiye Esq.

Legal Practitioner,

Abuja.

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