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Despite yearly allocation, rural electrification dims

By Kingsley Jeremiah, Abuja
15 September 2019   |   4:27 am
With only 41.1 percent of the country’s 200 million people having access to electricity, and with 51.4 percent of this population residing in rural-urban areas, healthcare delivery, agricultural development...

• Threatens Health Delivery, Agric Development
• Stakeholders Demand Value For N86b Projects
• Accuse Agency Of Deviating From Statutory Responsibility
• 60% Of Farm Produce Lost To Acute Power Shortage – Farmers

With only 41.1 percent of the country’s 200 million people having access to electricity, and with 51.4 percent of this population residing in rural-urban areas, healthcare delivery, agricultural development, are taking a hit, while rural-migration and insecurity continue to soar.

This poor and erratic power supply calls for serious attention as the worrisome scenario persists despite the capital allocation of about N86b to the Rural Electrification Agency (REA) in the past four years, and an established Rural Electrification Fund (REF) designed by the Federal Government to breach the gap.

REA, an implementing agency is mandated to provide “access to reliable electric power supply for rural dwellers irrespective of where they live and what they do.”

While the REF received N2b in seed funding from the Federal Government, the REA equally received a $350m World Bank loan, which the country is expected to pay back in about 30 years.

Income into the fund include any surplus appropriated pursuant to the EPSR Act (section 53), any fines obtained by the Nigerian Electricity Regulatory Commission (NERC) pursuant to the EPSR Act 2005, any donations, gifts, or loans made by international agencies, state governments, the Federal Government, local communities, businesses, any contribution that may be made pursuant to the EPSR Act 2005, and interest and other benefits accrued to the fund, monies appropriated by the National Assembly/special intervention fund, percentage of the annual turnover of the licensee’s as may be determined by the commission.

A total capital project of N21.5b was planned in the 2019 budget for rural electrification projects. In 2018, N22.6b was voted it, N30b approved in 2017, while N11b was earmarked for rural electrification projects in 2016.

These allocations notwithstanding, experts decry what they described as government’s poor spending on the sector, asking for a model that would attract massive private investments.

The stakeholders, who also raised concerns on the structure of the sector, especially the limited roles state and local governments are made to play in addressing the gap, contended that the value of funds expended on these projects was far from being sufficient.

The Country Campaign Director for Power for All in Nigeria and Chief Executive Officer (CEO) of Clean Technology Hub–Energy Innovation Centre, Ify Malo noted that current realities would compound poorer quality of life, less economic output, a high rural-urban migration, particularly among young people.

“Power is life in many ways. With electricity, children can study better, hospitals can store life-saving drugs, and pregnant women can deliver safer. Markets can stay open longer; micro-industries and businesses can grow in these areas. Our economic development will be faster when we use power to unlock the wealth in our rural areas,” Malo noted.

Malo, who said the scale of the problem of rural electrification was increasing, however, pointed out that the situation could also represent a huge market opportunity for off-grid renewable energy.

The Vice Chairman of the Nigerian-Agribusiness Group, (NABG) Emmanuel Ijewere said over 60 percent of farm produce in the country is wasted due to poor supply of power, especially in rural communities.

According to him, the biggest problem in the agricultural sector has to do with preservation. We lose about 60 percent of what we harvest. This affects farmers as there is a direct correlation between lack of power and increasing power,” he said.

A member of the Farmers Association of Nigeria, Kabiru Bello, also decried the development, stating that farmers mainly depend on electricity for most agricultural activities.

“I am into cashew and animal production, but lack of electricity has been hindering my production processes leading to serious losses. Storage and processing of cashew produce require constant power supply, the absence of which results in losses,” he said.

While the country has allegedly misappropriated over $16b in the power sector, key actors at the REA in previous administrations allegedly colluded to misappropriate over N10b of public funds from the agency’s account.

In June this year, a High Court of the Federal Capital Territory (FCT), presided by Justice Adebukola Banjoko, convicted five former Directors of the REA for their alleged involvement in a contract scam leading to the award of a N5.2b rural electrification project.

The United Nations’ World Urbanisation Prospects indicated that in recent years, approximately 62.5 million rural dwellers moved to urban centres as the infrastructure gap is expected to add another 226 million by 2050.

The low and erratic power supply across the rural communities in the country, according to UN affects hospitals, forcing their managements to rely on kerosene lanterns as source of lighting, and petrol power generating as their primary source of electricity. As a result, medical personnel are unable to perform optimally, referring most patients to hospitals in urban areas.

Indeed, the World Health Organisation (WHO) earlier noted that in places like Nigeria, unreliable electricity access worsens vaccine spoilage, interrupt the use of essential medical and diagnostic devices, and lead to lack of even the most basic lighting and communications for maternal delivery and emergency procedures.

The health body expressed worry that the development could threaten disease control, adding that more energy is required to expand services for prevention and treatment of non-communicable diseases (NCDs), especially the diagnosis and treatment of breast cancer, cervical cancer, and other NCDs, where women have a particularly heavy burden.

While the President Muhammadu Buhari-led administration is focusing on reviving the agricultural sector, the loopholes in rural electrification if not urgently addressed, stakeholders insist, could negatively impact farmers’ projected objectives.

The stakeholders accused REA of deviating from statutory responsibilities and concentrating on urban locations, especially markets and schools.

Apart from projects across markets in the country, the Federal Government said it would provide sustainable and clean power supply to 37 federal universities and seven university teaching hospitals across the country through the agency.

But stakeholders like the former Chairman of NERC, Sam Amadi noted that the development is blatant deviation, especially as those locations could be served from the national grid.

“REA is designed as a special purpose vehicle to fast-track rural electrification across the country. It ought not to build mini-grids where DisCos have the mandate to operate. It ought to focus on those rural communities that are not connected to the grid. Like in Chile and elsewhere, the REA should focus on the use of renewable resources available in the communities to develop electricity through non-profits and low-cost Independent Power Plants (IPPs),” Amadi said.

A professor of energy economics, Adeola Adenikinju stressed that there was a substantial divide between rural and urban communities’ access to electricity, adding that the development would make it difficult to boost the domestic economy, reduce poverty and unemployment.

“On the way forward, the overlap of responsibilities for rural electricity must be streamlined. Also, we should emphasise public private partnerships in rural electricity supply. The government must also allocate more resources to rural electricity supply,” he said.

Meanwhile, since the unbundling and privatisation of power assets under the defunct Power Holding Company of Nigeria (PHCN), power distribution is now the sole responsibility of distribution companies. Therefore since in 2013 to 2017, the REA has mostly been engaged in completing legacy rural electrification projects.

Pioneer Managing Director of NBET Plc, Rumundaka Wonodi, is more concerned with the socio-economic cost of poor power infrastructure to rural dwellers, especially its challenges on preservation of vaccines, rural-urban migration, and challenges to agriculture.

“The FGN cannot do this alone. States must be in a position to support and if this requires some devolution of powers, it needs to get done.

“Also, the REA must continue to work with the DisCos where it is optimal to collaborate. While the power sector reform is predicated on the entrance of private capital and operatorship, all stakeholders must realise that when it comes to rural electrification, the programme needs grants and subsidies. To pretend that these can be financed like other sector projects will be limiting at best,” he said.

Pointing to government’s initiative on energising economies, Wonodi said he remained critical of some of the initiatives of the agency, especially the mode of implementation.