A young man got me into my rare talking mode last November. The issue involved is how Nigeria has tied its own hands regarding electricity supply. Less than 20 hours later, I came across the report that Governor Godwin Obaseki of Edo State ordered the boss of the Benin Electricity Distribution Company, Funke Osibodu, to leave his office. Why did I tell the young man that our country chose to tie its own hands and had since been looking the other way? Why did Obaseki out of frustration order the boss of a Disco to leave his office? I shall get to those in my usual roundabout manner.
Minister of State for Petroleum Resources, Ibe Kachikwu, stated a few things in November that I noted. Of course, they are things some of us know already. That he, a cabinet minister, said these things is what’s instructive. Kachikwu stated what he thought were the limitations Nigeria walked itself into regarding electricity supply needed to power the economy. He said the economy “lacks the essential engine of growth. We are in an energy trilemma: we export energy in a primary form, we import petroleum products, and we have a power crisis…” It’s a well-known fact. We also know that moving forward, with the way the power sector is currently configured, is a challenge. The Manufacturers Association of Nigeria has on several times explained why especially as it concerns the operation of the manufacturing sector. Among other things, the lack of stable and affordable electricity in the chain-line of production affects the cost of production and erodes profitability. There’re also the astronomical billings and tariff structure that hurt manufacturers.
The journey to the point where reforms in the power sector, carried out under a previous administration, haven’t meant a significant turnaround is remembered by many. When the so-called liberalisation/privatisation was going on it was obvious to keen observers where it would end. Now, we have arrived. Lately, the Director-General, Consumer Protection Council, Mr Babatunde Irukera, said the issue of power supply is top on the list of consumer complaints to his council. In one particular state, I don’t recall, there has been electricity supply cumulatively for more than 10 hours in a day for five consecutive months. One some nights the entire capital city is in darkness. Yet, the sector has supposedly been liberalised for better service delivery. We know Discos operate as though they are the defunct government-owned NEPA. They still receive bailouts from the government several years after they began operation. They have become so corky that they pointedly tell the government that there can be no more growth in the sector because they lack funds. Meanwhile, the original idea was to hand over this sector to organisations that had the financial and technical capacity to move it forward. Nigeria handed over its power sector to fortune seekers not serious and competent business entities.
Aside from this is the structure of the sector. We create monopoly. We carve out kingdoms for the Discos and we expect them to operate as though they have competitors. One Disco for a few states. No options for the consumers. How do we expect Discos to be bothered when there’s no electricity supply or consumers complain about the absence of facilities such as pre-paid meters? When lawmakers called the operations of the Discos into question on the floor of the National Assembly earlier this year, one top official of the Discos threw a jibe. He said lawmakers made a show of questioning Discos because the 2019 election was around the corner. I pointed this insensitivity out on this page at the time. But it’s a summary of the kind of entities and the individuals to whom we gave the power sector. Then, there’s that phoney arrangement of three layers in the chain – Generation, Transmission, Distribution companies. There’s also the Federal Government that makes players enter a room and play while it locks the door and keeps the key. The Federal Government insists on a national grid that must receive the power generated and from where it is shared to all parts of the country.
A dinosaur is retained from the old arrangement when small but efficient generation and distribution arrangement would do. In the event, state governments cannot generate electricity and give to their people. At the root of this is how we configure the law that regulates the sector. Yet, we watch as though we are made for the law rather than the law made for us. Until we undo the current barriers, progress is better imagined. These were some of the things I explained to the young man who engaged me in a discussion last November.
But the Nigerian Electricity Regulatory Commission also has something to say regarding the phoney structure in the sector it is set up to regulate. A NERC official, Abdullahi Mohammed, once said that the framework on which the sector is built is shaky. He refers to the duplication of responsibilities. For example, he said, “NERC will go for inspection today, Nigeria Electricity Management Services Authority will go tomorrow, Bureau of Public Enterprises will go the following day, Presidential Taskforce on Power will go the next day. This is confusing the entire sector.” With the foregoing, one has reasons to wonder each time the Minister of Power, Babatunde Fashola, is shown going round the country to inaugurate power projects. What do we say when, in spite of those trips, frustration is what the Discos give consumers? The same treatment has got to Governor Obaseki. Whichever way one looks at it, the current structure doesn’t give a keen observer confidence that we are headed in a direction that is sustainable. Why? Sometimes, twice or thrice in a year, the entire national grid collapses and no part of the nation has electricity. It shows how vulnerable we are under the current arrangement. In a situation where the private companies in the system have stated that they have no funds to carry out further expansion, what hope has the nation?
Against this backdrop, one could understand when it was reported that Obaseki got angry with the Managing Director, Benin Disco, and ordered her to leave his office. The PUNCH newspaper reported it on November 28, 2018. The government explained that the governor took this action because the BEDC failed to meet obligations to electricity consumers in Edo as it had thrown the state into darkness for weeks. The encounter happened at the time the governor received members of the House of Representatives Committee on Power who were in the Government House on a courtesy visit. The governor is quoted as saying, “The BEDC has been an obstacle all the way. They will not provide electricity and will not allow you to get alternative sources of power. The state will not allow it. As governor of Edo State, we have lost confidence in the BEDC. We don’t want them here. We are in darkness. Let us remain in darkness until we find people who are capable of delivering electricity. This is our position.” According to Obaseki, despite the fact that the state generates about 600 to 700 megawatts of electricity, the people are still in darkness.
In its reaction, the BEDC said “out of the nine per cent allocation that the BEDC gets from the national grid, Edo State gets above 40 per cent, while the other three states share the balance.” This last part further calls attention to where the problem is. A state government generates electricity but what it generates is taken to the national grid and given to other states. The law forbids it from using what it produces. Moreover, Discos can only distribute what they are given. They are operating under a structure that limits them. We put this structure in place. We can dismantle it. For me this sector isn’t liberalised. What we have now is a pilot project, a demonstration farm. I think the Discos aren’t the entities that Obaseki and other concerned leaders like him should take issue with. All state governors that feel strongly about this matter should join him and head for Abuja. That’s where they should put their feet down, insisting they’ve had enough of this charade called liberalisation in the power sector.
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