Ijeoma Nwogwugwu, Email: ijeomanwogwugwu@thisdayonline.com
I have been particularly interested in the solutions most of the candidates preparing to contest the presidential election 12 days from today have to proffer on the electricity sector. My interest stems from its significance and the multiplier effect the Nigerian Electricity Supply Industry has on the rest of the economy. In my estimation, if this country manages to fix power, it would have solved up to 50 percent of its problems.
Manufacturers will be able to produce more at significantly reduced costs; farmers will be able to grow more crops owing to agro-allied businesses and food processing plants that will patronise them; cities with the resources to invest in monorail projects for mass transit would not have to worry about back up electric generators; overhead costs of banks would decline and impact positively on lending rates; a lot more jobs will be created from increased economic activity; access to pipe borne water will improve, etc, etc. The list is endless.
A lot of their rhetoric is not unfounded, however. After 50 years of nationhood, Nigeria, a country blessed with abundant natural resources, still cannot generate sufficient electricity to meet its energy needs. It must be particularly frustrating for the candidates, just as it is for the rest of the populace. Particularly galling for all concerned is the effort, or lack thereof, made in the last 12 years to generate and distribute more electricity by the Peoples Democratic Party-led government.
The candidates of the opposition parties have placed the blame squarely on the federal government for spending several billions of dollars in the electricity sector without significant results. Though the figure of $16 to $17 billion that they bandy round is grossly exaggerated, even at a more conservative estimate of some $10 billion, which has been allocated to the sector between 2003 and 2011, there is no reason why Nigeria is still not generating at least 10,000MW of electricity today.
The truth is that lack of consistency on the part of the PDP-led government and its inability to stay the course has cost us dearly. Starting from the Obasanjo administration, the former president, Olusegun Obasanjo, failed to faithfully implement reform in the electricity sector even after the Electric Power Sector Reform Act had been passed in 2005. Instead, he allowed himself to be convinced by his power minister, Liyel Imoke, to invest in what was originally conceptualised as the Niger Delta Power Programme, but for political reasons, later renamed the National Integrated Power Programme.
Prior to NIPP, the minister before Imoke, Olusegun Agagu, had awarded contracts to construct the Geregu, Papalanto and Omotosho power plants in Kogi, Ogun and Ondo States respectively. All three plants were hurriedly commissioned by Obasanjo before he left office in 2007. But as this is being written, not one of the plants has been able to operate optimally due to unavailability of gas to power them.
Early in 2006, Imoke made a strong case for deferring reform in the electricity through unbundling and privatisation. He felt it would take forever and not achieve the quick wins sought by the administration. He convinced Obansanjo to release funds from the Excess Crude Account to NIPP in a fire brigade approach to ramp up electricity generation to 10,000MW in space of 18 months.
Realistically, Imoke’s plan and the target he had set were not feasible. NIPP was also flawed from inception. It focused primarily on building new thermal power plants across the Niger Delta and rehabilitating some of the older power plants in the country, forgetting that the challenges in the sector were not limited to generation capacity alone. Expanding and reinforcing the transmission grid; upgrading distribution infrastructure; expanding the gas pipeline infrastructure to the new plants and future plants under construction under NIPP; and investing in new gas projects for the domestic market, were largely ignored. By the time the administration realised that its target to increase electricity generation to 10,000MW by the end of 2007 was defective, it was too late and some $5 billion had been plunked into NIPP alone.
As if the unpardonable mistakes that had been made by his predecessor were not significant, late President Umaru Yar’Adua made matters worse when he took over in May 2007. He failed to consider reform in the power sector, and suspended all projects under NIPP. Between the ill-conceived legislative probe of NIPP and a two-year suspension on further investment in the power sector, Nigeria was set back several years. It was not until 2009, that Yar’Adua finally got the approval of the state governments to expend a further $5.8 billion in the NIPP projects, and a new target of 6,000MW by December 2010 was set. That sadly has still not been met.
A summary of what largely transpired between 1999 and 2009/2010 has become necessary, so that the candidates contesting the presidential election can understand how inconsistency and policy summersaults have impeded development in the electricity sector. Even the Goodluck Jonathan government, which has realised the need to implement reforms in the power sector that will usher in private sector investment, is not immune from inconsistency and side distractions capable of derailing the programme.
A typical example was the announcement by the Minister of State for Power, Nuhu Wya, who like is predecessors, is paying lip-service to the privatisation programme. If not, how can he justify the recent revelation that a Brazilian company that nobody has ever heard of, was seeking to invest $100 billion in 23 power companies owned by PHCN under a 20-year concession arrangement. Another one is a proposal said to be backed by one presidential aide to import electricity barges into the country and connecting them to the grid under the guise that this will solve out power problems pronto.
The Brazilian firm, mind you, is fronted by two Nigerians, Charles Nwodo, a former banker and current CEO of one of the foremost logistics companies in the country, and one Abisoye Emmanuel Onigemo, who claims to be a Nigerian-born Brazilian national. Fortunately, the Brazilian embassy in Nigeria has disowned them. They have also been informed by the presidency, in not uncertain terms, that they should have expressed interest in the power companies through the Bureau of Public Enterprises like other prospective investors when the opportunity presented itself. What Minister Wya failed to understand when he contemplated the proposal is that concessioning all our power companies to one operator, would have amounted to transferring all our electricity assets from a government-run monopoly to a private monopoly, which is one of the objectives the reform programme is seeking to change.
The point here is that several attempts will always be made by ministers and government officials to strike inflated deals in the power sector and other sectors that are not in the national interest. Their primary consideration is to convince the president to approve one hair-brained scheme or the other through which they can line their pockets. In the end, nothing is achieved and Nigeria suffers the brunt of several ill-advised proposals.
What candidates seeking to contest the highest office in the land must therefore focus on are wholesale reforms capable of completely transforming the electricity sector. So far, their vituperation on the sector shows a lack of grasp of the issues. Some like General Muhammad Buhari and Nuhu Ribadu, respectively of the Congress for Progressive Change and Action Congress of Nigeria, have even talked of instituting yet another probe of the sector, as though the last one served any purpose. What I find particularly amusing is that Ribadu, once a member of the Economic Team by virtue of his position as former chairman of the Economic and Financial Crimes Commission, even attempts to distance himself from the poor judgement made by the government he once served.
Going forward, we have to stop playing politics with electricity. It is a luxury we can no longer afford if we must accelerate our march towards development. As indicated above, fixing the sector has wider implications for the rest of the economy. The first thing the front runners, who favour their chances during the presidential contest must arm themselves with, is to have a clear understanding of the issues and what needs to be done. Mouthing inane platitudes on how the federal government would keep dumping bucket loads of cash into the sector without results is not acceptable.
The government has proven beyond doubt that it lacks the will, discipline and financial capacity to turn around the sector. To attain 40,000MW, several trillions of naira would have to be invested in electricity alone, leaving out other segments of the economy. Under the right investment climate, the private sector can begin to plough that investment over time. Any candidate, who does not see that, is not deserving of the vote of the electorate.