BY LEKAN SOTE
The matter of electricity supply in Nigeria is gradually getting to be a deadly business: A report indicates that sometime in 2019, two students of Federal University in Oye-Ekiti, occasionally referred to as FUOYE, lost their lives to trigger happy security operatives said to be guarding a certain First Lady, when they and fellow students embarked on a street protest because electricity supply to the University had gone off for several months.
Though most of the business of getting electricity to Nigerians is in the hands of private enterprises, except for the ownership and operation of the national transmission grid in the hands of the Federal Government-owned Transmission Company of Nigeria, there is no significant improvement in the delivery of electricity to Nigerians.
“World Bank projects that Nigeria will need close to 16.8 gigawatts or 16,800 megawatts of electricity by 2035. This is a modest projection considering that another report states that Nigeria’s population should have risen to 294,986,052 by 2035”
It’s not exactly new news (excuse the tautology) for the National Assembly to now firm up on the provision in the Concurrent Legislative List of the Nigerian Constitution that allows states to establish electricity power stations to generate, transmit and distribute electricity within their borders.
It’s ironic that private enterprises that promised seamless delivery of electricity to Nigerians have failed woefully. In addition to failure to fulfill their mandates, they are piling up toxic loans that a helpless government keeps guaranteeing for them.
Records indicate that in the past eight years, Nigerian electricity consumers have paid about N5.7 trillion mostly estimated bills, whereas the electricity suppliers have only been able to guarantee 4,000 megawatts of electricity per day, though the electricity generating companies or Gencos have the capacity to produce 12,522 megawatts per day.
There are indications that individual Nigerians and corporate organisations generate another 12 gigawatts or 12,000 megawatts of electricity to complement the inadequate supply from the discos. There are 1,000 megawatts in one gigawatt.
The World Bank projects that Nigeria will need close to 16.8 gigawatts or 16,800 megawatts of electricity by 2035. This is a modest projection considering that another report states that Nigeria’s population should have risen to 294,986,052 by 2035.
The poor performance of the mix of privatised Gencos and electricity distribution companies or Discos and the Federal Government-owned Transmission Company of Nigeria is explained by some equipment faults, which suggests a lack of prompt remedial action as a result of poor maintenance culture.
In addition, the hydropower plants face poor water management regime; and inadequate supply of gas feed stock, very likely because some gas-powered Gencos won’t pay for the gas feeds they received, especially because sundry government agencies do not pay their outstanding bills to the Discos that should have redeemed their debts to the Gencos.
The Transmission Company of Nigeria was forced to announce that as many as 14 electricity generating plants (most of which are powered by gas) had little or no production. This depletes the inadequate electricity supply that is uploaded onto the national grid.
Instead of the electricity supply being stable with the introduction of the much-acclaimed Service-Based Tariff, which attracts a premium tariff paid by the consumers, unfortunately, the reverse is the case; it just keeps getting worse.
It is instructive that despite full privatisation of the generating and distributing sub-sectors of the electricity business 90 of Nigeria’s 109 Senators voted in favour of “Bill 33, for an Act to allow States (to) Generate, Transmit and Distribute Electricity in Area(s) covered by the National Grid.”
The implication of this Bill is threefold: Firstly, it allows State Governments to compete with privatised Gencos and Discos. It also allows State Governments to set up parallel transmission lines that will compete against the Federal Government-owned Transmission Company of Nigeria.
Secondly, this Bill, if finally passed into an Act, will effectively give teeth to Section 14(b) of the Concurrent Legislative List of the Constitution, which provides that “A House of Assembly may make laws for the State with respect to– the generation, transmission and distribution of electricity to areas not covered (in) that State.”
And thirdly it also expands the scope of electricity generating, transmission and distribution agencies to include even areas hitherto covered by the national completely owned by the Federal Government Transmission Company of Nigeria.
Thus states no longer have to hide under rural electricity projects to provide electricity for their citizens. In addition, they no longer have to upload the electricity they produce beyond certain mega wattage onto the national grid. Perhaps only the regulatory function is left under the monopoly of the Federal Government. The National Electricity Regulatory Commission is a federal agency.
In 2010, President Goodluck Jonathan justified his intention to privatise the electricity sector with the following argument: “We need to revolutionise the power sector.” He figured that only the private sector could muster the $85 billion investment said to be needed to provide adequate electricity infrastructure needed to cater to the electricity needs of the 140 million Nigerians at that time. Of course, the figure has risen beyond 200 million in recent times.
In September 2013, President Jonathan formally handed over the Gencos and Discos to private investors for a total of $2.5 billion, as pundits projected that by 2015, electricity supply will be steady and stable. But alas!
The unduly optimistic analysts, with their rose coloured prism, predicted that privatised electricity companies would reduce the cost of production in Nigeria’s industry up to 40 per cent and also raise Gross Domestic Product by 3 per cent.
To seal the sales transactions, the Federal Government had to pay off the 14,000 workers of Power Holding Company of Nigeria with a $2.4 billion whopper, in addition to raising another $750 million Euro bond to improve and expand the capacity of the national grid which it retained through the Transmission Company of Nigeria.
When President Muhammadu Buhari was finally confronted with the reality of private electricity investors woefully failing to deliver as anticipated, he must have thrown up his hands when he realised that he couldn’t reverse the sales without repercussions.
He then lamented: “The privatisation (of Gencos and Discos) is a complex investment that the government cannot wake up to (unilaterally and wilfully) cancel the contracts (he probably meant the sales transactions), because there are consequences.”
President Buhari added in regret: “Privatisation (of the electricity sector) has not worked well, in the sense that what the government sought to achieve (10,000 megawatts daily supply) has not yet happened.” The situation probably got worse after the Gencos and Discos were sold to oligarchs who have no competence for the endeavour they undertook.
This probably explains Bill 33 of the Senate that is more positive in promoting a mix of Federal, States and private sources of supply of electricity to the masses of Nigeria. This idea must be from the rule book of Italian cynic, noble man and political strategist, Nicollo Machiavelli, who suggested the idea that the end always justifies the means.
President Buhari has admitted that both the Federal Government and the current private investors in the electricity sector may have to relinquish portions of their shareholdings in order to accommodate new private investors who would probably be better equipped financially and technically to achieve the desired results in that industry.
Bill 33 must be affirmed by the House of Representatives because the current template of the Federal Government and the private sector doesn’t seem to be working. It’s time to review the template that is not working.
