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Power sector excuses and bleeding economy

By Editorial Board
24 June 2019   |   4:18 am
Nigeria's power sector has gone through twists and turns over the years and the recurrent problems of the sector have become intractable, or so it seems.

Power (Energy)

Nigeria’s power sector has gone through twists and turns over the years and the recurrent problems of the sector have become intractable, or so it seems. Governments come, read copiously from the book of lamentation on this and go. But the problems remain with the citizens who have been serially bedevilled with different excuses for poor performance by the authorities – right from the outset of this democracy 20 years ago.

The promises and failures began from the time of Chief Bola Ige, of blessed memory to Senator Danjuma Goje, to Professor Barth Nnaji to Professor Chinedu Nebo and finally to the immediate past minster in charge of that sector, Mr. Babatunde Fashola as Minister of Power. Each of them has come up with plans and assurances on how the problem could be solved to aid the growth of the Nigerian economy. We have always been told that except the power problem is resolved, the economy will continue to bleed and thus fail to generate the number of jobs that would engage the growing youth population.

Again, the current narrative in resolving the problem of the power sector, at least up to May 29, 2019, is the concept of “incremental power.” That was the slogan of the Babatunde Fashola era. Though this appears to have brought some value to the energy sector, it nonetheless appears deficient in totally addressing the power problem. This also totally deviates from his position before coming into power when he was reported to have boasted that, “any serious government should be able to solve the power problem within six months.” This change in stance by the ex-minister appears to indicate that the problems of the sector are deep-seated and thus cannot be scratched on the surface.

This also tends to suggest that there are many issues that need to be addressed in finding a solution to the problem of the sector. Issues of cross-debts by government agencies as it affects the companies and agencies in the sector, issues of corruption and challenges with the privatisation of the sector among others abound. Four years have come and gone since May 2015 and the “change” we all expected in the sector remains a mirage, after all. In fact, the problem appears to have gone worse with recent frequent reports of system collapse affecting the national grid.

System collapse has been occurring in the power sector overtime but the latest one occurred sometime in April 2019, with reports indicating that the power generation and transmission system collapsed leading to serious power outages across parts of the country. As a result of this, a huge drop was recorded in power supply from about 4,000 megawatts to about 2,039 megawatts. Most parts of the country have been experiencing epileptic supply of electricity since that time.

A number of causative factors were identified for this latest experience. First, there was the issue of shortage of gas supply from the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation due to its rehabilitation of the Escravos-Lagos Gas pipeline system. Then there is the case of the tripping of the Benin-Egbin 330KV transmission line and then the fire outbreak at the Apo transmission station in Abuja. These are a few of the recurring incidences that have bedevilled this sector over the years. Different administrations have acknowledged the challenges of the sector and later relapsed into a “business-as-usual” mode after some time.

In this same vein, quite recently the Vice President, Professor Yemi Osinbajo publicly acknowledged at the 2019 May Day celebration in Abuja that the power sector remained a challenge. What the nation needs is more than empty rhetoric or a mere acknowledgement of the problem. What the ordinary man needs is a solution to the power problem. The ordinary man needs to experience life beyond the “I better pass my neighbour” operating environment.

The challenges confronting the sector are indeed many. First, there is a disconnect between power generation and transmission with the transmission grid not able to absorb the available capacity from the power generating companies. Hence, the transmission grid needs to be upgraded. Second, there is the need to closely monitor the operation of the distribution companies regarding revenue generation, which is key to the attraction of new investment into the sector. If revenues are not coming in, as expected, there would be a clear disincentive to investors and infrastructural development in the sector. The lack of new investments by the new owners of the generating and distribution companies, following from the privatisation, is a setback to the whole rejuvenation process. This is so because most of the equipment in the sector are obsolete leading to a preponderance of weak distribution lines and transformers. There is a need for a total review of activities in the sector. This is necessary as a first step in addressing the adverse effects it has been having on the Nigerian economy.

Most of the major industries in the country have resorted to alternative sources of power supply given that some of their operations cannot work with epileptic power supply. This applies mainly to the multinational companies. Even the small and medium scale enterprises have suffered serious damage to their business survival and growth. Many of them have not been able to cope with this bad business environment and have closed shop. All these have led to tremendous job losses in the economy, in the face of a growing labour force due to the churning out of graduates from the tertiary institutions over the years.

Going forward, government needs to pursue the development of other sources of power for the country very seriously. An appropriate power-mix policy should be pursued. The dependence on gas-powered energy generation should be evaluated. Moreover, most of the powers generating companies are far removed from the location of their source of gas supply. This is a problem that probably was not properly evaluated at inception. The government should give serious attention to the development of other sources of energy such as solar, thermal and hydro-powered energy alternatives to ensure some stability in the sector. Governments at all levels should also stop budgeting for the importation or purchase of generators. In addition to these, Nigeria should also consider “going green” since fossil fuel-fired energy sources are getting obsolete.

The Buhari administration in this second term should take the energy sector more seriously than it did in the first term. Relying on a mere “incremental power strategy” as espoused by the immediate past minister in charge of power may not take the country to its desired destination as regards economic development. A more proactive overhaul of the power sector, including a possible review of the past privatisation and the attraction of new investments into the sector may be the way out.