Confronting Nigeria’s energy challenge
Some years after the much-heralded privatisation of the energy sector in Nigeria, power generation and supply have sadly, remained at best epileptic, almost dismal. The organised private sector, businessmen and private citizens are all disenchanted with the excuses and bickering which have dominated the power sector. This near-crisis situation came to the fore recently in Jos when the Minister of Power, Works and Housing, Babatunde Fashola read the riot act to distribution companies (DISCOs) to ‘stop the blame game on infrastructure and run the assets they inherited in line with privatisation.’ That top players in the sector are still foot-dragging and having puerile disputes over their obligations shows the depth of the challenge which the sector still faces. This is sad. It is unfortunate. It is embarrassing.
The warning took a long time coming. The pains and travails of the average Nigerian groaning under lack of power supply must have reached the ears of government before now. The ruling party made pronouncements during campaigns that an All Progressives Congress government would fix the power sector problem within two years. From all indications, a solution is not in sight. Rather, the distribution companies are complaining about infrastructure. The government is complaining that DISCOs have not been making remittances to Nigerian Bulk Electricity Trading (NBET). This is not what Nigerians bargained for. Certainly this is not what the Federal Government promised Nigerians before and after the privatisation exercise. There are still areas in the country which stay for upwards of three weeks without power supply. Manufacturers still rely more on power generators to produce goods. Importation of generators is still high in foreign exchange consumption. Indeed, it would seem that there is a cartel that is sworn to making the nation live in darkness by thwarting all efforts to improve the power sector.
Sadly, the old problems have re-emerged. Inflated contracts, assets stripping and buck passing still haunt the energy sector. The capacity of the national grid has not been expanded to accommodate increased supply of megawatts of energy. The DISCOs are deeply indebted to the generating companies, GENCOs. Indeed, the lack of transparency which dominated the privatisation process has come to haunt the entire sector.
Who are the owners of the 11 companies that bought into the privatisation process? Why are they now complaining about infrastructure? Was there no due diligence before the purchases were made? Why has the capacity of the national grid not been expanded? Why is Transmission Company of Nigeria (TCN) still in the hands of government? Why is the nation still bogged down by the antiquated practice of feeding all generated energy into the same old national grid? Is it true that the GENCOs constantly generate thousands of megawatts that are lying idle because the national grid cannot exceed the installed capacity of 5,000 megawatts? Is it not time Nigeria started thinking outside the box to solve the national embarrassment that is public electricity?
Nigeria’s inability to plan for the future is a great challenge. The minister once admitted that there is no reliable data to plan for energy generation. In other words, there is no accurate information on the number of households or industries which the nation must generate and supply with power. This is a great drawback. The present administration should establish that fact as soon as possible.
Power supply is crucial to national development. With a vibrant power sector, industries would perform at optimum capacity. Small business men and women would be able to plan and live their lives with minimum costs. The multiplier effect on the people would be tremendous. Currently, the cost of running generators is overwhelming. It adds to production costs. It makes importation more attractive. It compels manufacturers to produce their goods outside Nigeria.
Privatising the sector was and still the best option in the circumstances. The individuals and business concerns that have benefitted from the exercise have an obligation to the Nigerian people. Power generation and supply must be steady and constant. There should be no excuses from government or from operators. All existing laws which pose a cog in the wheel of progress should be amended or removed immediately through due process. The federal spirit which the 1999 Constitution guarantees should be brought to bear on power generation and distribution. The point made by the Energy Minister that DISCOs ‘don’t have exclusivity over distribution areas’ needs to be pursued with vigour. Provision must be made for all generated energy to be utilised appropriately. The national grid concept has become anachronistic; it should be jettisoned. Smaller units of power generation and distribution should be created across the country. That way, the competitive dynamic and the spirit of efficiency which underlies privatisation would be felt by all in the country.