- Figure may double in 2019 – Manufacturers
Olugbenga Abiola
Despite the claim of the President Muhammadu Buhari-led administration that it has boosted Nigeria’s power generation from 4,600 in 2017 to 8,000 megawatts as at October 2018, organisations and individuals across Nigeria spent N7.2 trillion to fuel their generating sets in 2018, investigations by The Point have revealed.
Statistics obtained from a Non-Governmental Organisation, Independent Energy Watch Initiative, revealed that over 60 per cent of electricity consumers had access to supply for six hours, as about five per cent enjoyed about 20 hours of power supply daily.
the cost of fuel and maintenance of the over 20,000 generators in the branches rose from N9 million in 2016 to over N17 million every month in 2018. The huge cost was not only as a result of the increased cost of diesel, but also the cost of spare parts for the generators, and need for the banks to run a 24-hour service at over 30,000 ATMs locations
This implies that most Nigerians and businesses relied on their generating plants, which was supposed to be an alternative source of power, for power supply.
Aside from offices and business districts, iWIN also disclosed that power supply worsened in 2019, compared to the previous year, when supply dropped from 78 per cent to 85 per cent across about 68 million private homes in the nation.
While about 68 million homes spent a minimum of N1,200, or more, on fuel to power their generators daily, especially during the dry season, the Offices of the President and Vice President increased their fuel consumption from N32.9 million to about N45.3million within the same period.
Also, the expenditure of the 27 federal ministries, over 700 states’ ministries on fuel increased from an average of N200 million and N70 million; to N310 million and N140 million, respectively.
The most affected are the real sector, telecom and the banking industries as they spent fortunes to generate power in their industries, factories and offices across the nation.
For instance, a source in the Manufacturers Association of Nigeria, who pleaded anonymity as the group has not given any official statement on the subject, disclosed that the average residential, real sector (including Small and Medium Enterprise) expenditure on powering generators increased from N2 trillion and N3 trillion to N3.5 trillion and N5 trillion respectively within the same period.
A source in the Association of Telecommunication Companies of Nigeria also revealed that the five operators in the sector spent an average of N175 billion on power generation in their offices, outlets and mast sites across the country in 2018.
This implies that the poor state of the power sector took a great toll on operations in the telecoms industry, a development that created holes in the pockets of subscribers.
Though, the branches of banks in the banking sector across the nation dropped by between 15-18 per cent in 2018, the figures released by their headquarters expended were shocking.
The decline of the branches did not have significant impact on the expenses incurred by the banks to keep the branches running and could be attributed to the rush by many of the financial institutions to have their Automated Teller Machines close to the people at the bottom of the pyramid.
Findings revealed that the cost of fuel and maintenance of the over 20,000 generators in the branches rose from N9 million in 2016 to over N17 million every month in 2018.
The huge cost was not only as a result of the increased cost of diesel, but also the cost of spare parts for the generators, and need for the banks to run a 24-hour service at over 30,000 ATMs locations.
FIGURE MAY DOUBLE IN 2019 IF BUHARI RETURNS – STAKEHOLDERS
As far as MAN is concerned, irregular power supply has been a clog in the wheel of real sector in Nigeria. The development, to MAN, is beyond the President Muhammadu Buhari administration.
A reliable source at MAN, who spoke on the condition of anonymity, alleged that the Federal Government lacked the political will to tame the scourge and added that the figure expended on fueling generator might double if Buhari wins his re-election bid.
According to him, the current administration has lost focus as it has failed to improve power supply in the country despite the fact that it promised to end irregular supply one year after it was inaugurated.
“Irregular power supply has been a bane to the growth of the manufacturing sector, which will in turn affect the growth of the nation and further prevent the nation from joining developed economy in the world. Most of our members rely solely on other alternative source of power generation as we are speedily losing hope,” President, MAN, Eng. Mansur Ahmed, said.
President, ATCON, Mr. Olusola Teniola, described the development as a means to frustrate telco operators, considering the fact that the operators were currently battling with multiple taxation, which had risen from 26 taxes in 2015 to 38 taxes under the current administration.
He said, “At this point, if the government decides not to tackle the menace, we will have no choice but to pass the cost to the subscribers. Nigerians should be ready to pay more for calls and data subscriptions.
“It is unbearable doing business in Nigeria due to the ailing state of the power sector. We are a profit making organisation, but we cannot afford to over-burden our subscribers with tariff.”
EXPERTS EXPRESS MIXED FEELINGS
Meanwhile, some experts told The Point that pipeline vandalism was the reason behind the drop in gas supply, which in turn led to a reduction in power generation and supply of electricity across Nigeria.
Managing Director, Blue Sea Limited, Dr. Gboyega Sehindemi, explained that the outright sabotage of some crucial gas pipelines was the reason power generation had reduced drastically in most parts of the country.
He said, “Over 40 per cent (480 MM sf/d) of the installed gas supply capacity was out, due mainly to vandalism and the lost gas was equivalent to the gas requirement to generate about 1,600 megawatts of electricity.”
Saddening as this revelation was, it brought to the fore the unpreparedness of those in authority to really take the bull by the horn in checkmating all processes that seem to be rubbishing the reform in the power sector.
More worrisome is the fact that some experts argued that gas pipeline vandalism was not a new phenomenon, and yet government seems incapacitated to deal with it.
A public administrator, Dr. Olabode Meyungbo, said that having attributed the poor state of supply to pipeline vandalism, the government had failed to explain how it hoped to curb the menace.
According to him, both government and the investors should understudy the environment, as well as strategise on how to go about running the companies, and this will take some time.
He said, “What Nigerians should be asking from them is to reel off their plan in form of a timetable to intimate them on how they want to go about rejuvenating the power sector and how long the process will take. They should also be ready to give specific timeline to various steps taken in achieving such processes.”
Though not wanting to sound pessimistic, General Secretary, National Union of Electricity Employees, told The Point that with time, Nigerians themselves would find out who got it wrong as far as privatising PHCN is concerned.
According to him, labour initially kicked against the privatisation of Power Holding Company of Nigeria because of its belief that the provision of power to the generality of Nigerians is a social service and not one to be commercialised.
He said, “Unbundling the company gives room to investors to want to think of recouping their investment first, and then making more profit from their investments. The investors are not Father Christmas, people will definitely pay for services rendered to them, and I bet with time, tariff will go up. So what is the rationale behind making Nigerians pay more for what is not readily available and affordable?
“Most of these investors borrowed money from the banks and are under pressure to start paying their loans. How they will get their money back is what will be paramount in their minds, not if Nigerians are getting power or not. Moreover, power not available cannot be affordable.”
With the challenges faced by the investors, as an aside, there are fears that the Federal Government still needs to do more in finding solutions to the poor electricity supply in the country.
One of the things the Federal Government needs to do is to checkmate the vandalism of gas pipelines.
Ajaero wondered why government was not deploying massive security operatives to man the gas pipelines as it was doing for the oil
pipelines.
He was emphatic that the Federal Government should have done this initially before even thinking of privatising power infrastructure because “everyone knows that the nation’s electricity is greatly powered by gas.”
WAY FORWARD
Ajaero queried the rationale behind the country’s sole reliance on gas to generate power, while neglecting other sources, which include hydro, solar and coal.
Citing examples of what obtains in other climes, he pointed out that coal and hydro were major sources of power, whereas in Nigeria, gas constitutes about 70 per cent.
Several industry watchers had also condemned government’s inability, or unpreparedness, to pursue the generation of power using solar, hydro or coal which, apart from being readily available in the country, are also cost effective.
An Industrial Engineer, Mr. Ben Onazi, said that there was no reason the government was not thinking of encouraging the development of other sources of power to generate electricity.
While citing examples of wind being used in Katsina and solar in some other areas, he said with the development in those areas, there would be less pressure on gas-powered
plants.
“Engaging in solar could be highly expensive since we do not have any factory producing solar panels, but government should intensify its effort towards establishing such factories around the country. I heard few years back that there were plans to set up a factory to produce solar panel in Abuja but it appears the plan has been abandoned,”
he said.
Aside from developing the use of solar to power energy, many industry experts are of the opinion that hydro and coal could make a lot of difference in power generation. Not a few of them are surprised that government is not enthusiastic about developing the coal sector, since it is available in abaundance in Nigeria, especially in Enugu.
