The conclusion of the Senate that the 2013 power sector privatisation exercise is a total failure is not only timely, it is a fair assessment of the dismal state of the country’s electricity supply and distribution sector. The ordinary Nigerians who feel the pain of an epileptic supply of power most cannot but agree with the Senate.
Indeed, they think that the Senate ruling is long due. What is very urgently needed is the way forward from the logjam. The solution partially exists in the new Electricity Act, which provides legal liberalisation of power supply. The Senate, as a vital arm of government should work hard to make the states, private organisations and individuals key into the new law, towards changing the power narratives in Nigeria.
The Senate’s position was reached while considering a report presented by its Committee on Power, which was tasked to investigate frequent national grid collapse and other systemic failures. Chairman of the Committee, Senator Eyinnaya Abaribe, who explained the findings, blamed the repeated failures on ageing infrastructure, abandoned projects worth trillions of Naira, regulatory inefficiencies, security lapses and insufficient financial oversight.
Nigeria’s power sector is clearly in bad shape. The national grid’s wheeling capacity of barely 4,000 megawatts (MW) of electricity for a population of well over 200 million is scandalous. The epileptic grid failure under the supervision of the Transmission Company of Nigeria (TCN) has gone beyond being an embarrassment to a state of emergency. The ill-equipped and profit-driven Distribution companies (DisCos), their lack of technical expertise and financial base to build on inherited assets make a mockery of the privatization exercise.
Also, the power-generating companies’ inability to deliver at installed capacity calls to question the quality of the pre-qualification assessments that took place before the nation’s power assets were sold to private investors. Nigerians demand an urgent review of that exercise.
It is time to find a lasting solution to the perennial energy crisis in the country. Although belated, the Senate has hit the nail on its head by holding that the privatisation of the power sector done 11 years ago leaves so much to be desired. The senators’ idea of applying legislative measures to reset the policy is a step in the right direction, given that the present arrangement (ownership and regulatory framework) does not support Nigeria’s quest to industrialise.
No country ventures to be taken seriously on manufacturing and productivity without having a solid power base. Electricity is a critical component of economic growth. It powers the production lines and heavy machinery in mechanised production. In social life, electricity provides comfort at homes, schools and in the work environment. However, many Nigerians have been forced to adapt to stone-age discomfort due to lack of electricity. That must not be allowed to continue.
It would be recalled that in 10 years, the national grid had collapsed more than 105 times, incurring billions of Naira losses as each collapse is reported to cost about $7 million to restart. Contributing to the debate, the Senator representing Edo North, Adams Oshiomhole, lamented that the privatisation exercise had failed and has become a burden on Nigerians.
The position of the Senate reflects the position of Nigerians across the country. Despite privatisation, consumers spend their money to buy electricity accessories, including poles and cables. They pay as high as N150,000 for a single-phase pre-paid meter that is recorded as the property of the respective Distribution Company. Communities across the country gather money to buy transformers that at the end of the day become property of the DisCos. This is unacceptable, and Nigerians have waited for the day when the privatisation policy will be revisited to make the process accountable and transparent.
The lawmakers should pursue this matter with the same vigour with which they investigated the privatisation exercise. They should not abandon the electricity crisis at the level of lamentation alone. They should use this opportunity to revisit the sale, ownership and management of these public utilities that, once upon a time, gave joy to the people and hope of industrialisation to the country. The investigation must be thorough and far-reaching.
For instance, former president Obasanjo is reported to have invested $16 billion to prime the then Power Holding Company of Nigeria (PHCN) for privatisation. There were activities including the importation of turbines and other inputs. But there hasn’t been any conclusive probe of that investment to determine whether it was money well spent and to demand accountability from those who managed the process. The Senate and this government should look into that.
Subsequent governments reportedly spent huge sums to support the sector post-privatisation, after the Bureau of Public Enterprises (BPE), on behalf of the government sold six power-generating companies for $1.269 billion (N460.7 billion); as well as 60 per cent shares of 11 distribution companies for $1.256 billion (N455.9 billion). The government has retained 40 per cent of the shares with little oversight on its investment. So far, the government is credited with supporting the sector with trillions despite privatization. Additional sums in the form of loans were granted DisCos to meter customers.
In the performance agreement signed with GenCos in 2013, they were expected to add 5,000 Megawatts to the National grid by 2018. DisCos were also expected to meter their customers progressively within five years to mitigate losses in revenue collection. In 2024, going to 2025, generation is touted to be around 13,000 MW.
However, only 4,000MW is manageably wheeled to consumers by the decrepit TCN, due to lack of capacity. The DisCos are only able to meter a little above one million out of eight million registered consumers, according to the Nigerian Electricity Regulatory Commission, despite assistance from the government. That is appalling and unacceptable because it provides the excuse to overwhelm consumers with fictitious and bogus estimated charges.
At a time when South Africa, with a smaller population, is celebrating 272 days of uninterrupted power supply without load shedding in five years, let the Senate not waste this opportunity to unveil and dismantle the cabal that has laid waste prospects of growth in the power sector and in the country. This assignment can be done effectively with the collaboration of the executive.
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