Managing Director of Kuro Communications, Michael Enahoro spoke to Chineme Okafor on the challenges of Nigeria’s power sector, saying the execution of the 2005 Electric Power Sector Reform Act has been faulty and unable to absorb the millions of unemployed youths in the country. Excerpts:
It would be nice to know you and the entity you represent?
My name is Michael Enahoro, I am the Managing Director of a strategic project management company called Kuro Communications, one of the few companies in Nigeria that does innovation development and strategic projects integration. What that means is that we look at several aspects of the economy for the private and public sector and create the ‘Nigerianised’ international standard parts that fit with what is required in the economy and offer that to public and private sector entities that are most positioned to develop and utilise them. You will seldom hear about us but you see a lot of our works.
What are your specific worries about the power sector?
A couple of issues have really driven my concern. Our continuous observation is that Nigeria is incapable of reaching adequate power supply, and we have not taken a proper evaluation of the key aspects of the power supply system – generation, transmission and distribution, in line with the requirements of the country.
People continue to say that power the backbone of the economy, and a country like Nigeria shouldn’t be doing anything short of 50,000 megawatts because we are blessed and properly situated to tap into hydro, solar and gas power generations and supplies.
If you look at these three sources, you could ask why Nigeria has not gotten to a 24 hours power supply regime, and my main concern is that we have not really looked at it from the point of investment. We started this reform programme in 2005 when we decided to deregulate the sector and spent about $16 billion on that, we even went down to rural electrification.
From that time and the sort of investment, no country in the world would be struggling to generate 5000 megawatts of electricity. My thoughts are that the Nigerian transmission capacity is outdated and that could have provided an ample opportunity for huge economic activities comparable to the telecommunication and banking sectors reform.
If we can successfully liberalise key sectors of our economy like banking, telecommunication and petroleum, why not power which is 10 times bigger than they are. We should have taken the segments one by one starting from the transmission segment but the political will was never there, otherwise, we wouldn’t be talking about the same things after many years of reforming.
The reasons why we are where we are in the power sector are not very many, the right things and persons have not be done or put in place in the sector. If every other things have worked over the same period, why has it not worked in the power sector, I say it is all about commitment.
What really should we be looking at then?
We have set the building blocks, but the truth is that the foundation is wrong. With NERC, the private sector actors and others in the sector being set up to work with power infrastructure that were last built in 1966 and 1965, there is no way they will turn in results, we have to rebuild the infrastructure and it is not a hard task.
But the reform is meant to address this and rebuild the foundation?
Not at all. The foundation was never touched otherwise we should have allowed Manitoba do its job at the TCN and shouldn’t have sold the distribution networks yet when we know we could not generate the power to distribute to Nigerians. If you are generating less what are the guys at the distribution networks going to distribute to homes and offices.
We should have allowed Manitoba to do their job, we should have been patient and endure the pain to get to the level we want. If the telecoms guys can build up thousands of telecom towers and connected millions of Nigerians over few years and people negated NITEL for them, and we have a stable telecoms sector, why can’t we do that in the power sector?
We need to significantly rebuild the transmission capacity we have because it cannot take our potential to generate and that means we have to work backwards and reengineer the structure with a sincerity of purpose from the government in all aspects.
Can government honestly reengineer for instance, the TCN that is historically defined by evidence-based operational irregularities?
Of course, it can with a clear sincerity of purpose and a forward outlook. A lot of people in government don’t read policies and white paper documents are signed by them. The document written by Lanre Babalola is one of such documents but the government refused to just read.
We need a president with a futuristic outlook, a president who can see 30 to 40 years down the line and begin to work towards that with clear goals and committed people.
I was part of the people that worked on the MTN bid when the telecoms reforms started and nobody believed it was possible because few years back we had failed with the Abacha’s license sale but when we got here, we found there was no power, yet Nigerians ingeniously started connecting generators to support this sector. If all the generators in the telecoms towers are connected to the grid, their latent capacities will give us 6000 megawatts which the country is struggling to generate.
Does the country have the appropriate political leadership to drive this big picture plan in the power sector?
Right now, the country does not have that political leadership to drive this sort of reform. The political class don’t understand exactly how to plan for Nigeria’s future in this sector and this is appalling because we are now trying to force the hands of the end users by increasing the rates for power that is generated at exorbitant costs and which should not be in this century when you consider the advances made in technology and business financing and reengineering.
With regards to the social aspects of the power sector and Nigeria’s high youth unemployment, is the policy enough to address this?
Not at all, there are no central policies to address this. The ministry of youth is misguided and do not understand what the economy needs today in terms of workforce and what the NYSC is producing, you will see that there is a misstep.
The ministry of labour and its NDE (National Directorate of Employment) programme are also in misstep with what the economy needs today and they are hovering here and there with no output.
From 2001 to 2005, the Nigerian Bureau of Statistics reported that Nigeria sucked in 92.6 per cent of its graduate population into the telecoms and banking industry because the opportunities for building and growing the sectors were there. Everybody became telecom service providers and all sorts of work but that is not the case for the power sector.
If we are able to retool our power sector, it will absorb a lot of our youths into employment, as well as create new skills sets for the sector. The power sector opportunities are so huge that it is able to take up millions of our young people in.
The current government is almost two years old, have you honestly seen steps that could address Nigeria’s power challenges come from it?
To be honest, I haven’t. There was a tender recently by the TCN that it wants to do five big transmission projects, for me, that is not the way to go. There has to be a complete change of approach to the power sector issues.
Nigeria does not have the fund to do these things, and I don’t see where that makes sense without an honest framework that will allow private investors come, put their monies and eventually make decent returns.
But the EPSR Act 2005 provides for all that?
You can write all the words you want in a document and still don’t believe in them. It is not the words you write down or say but your actions that lead you through.
A policy statement is a policy statement, we are awarding contracts in tender journals few months after we kicked out Manitoba and doing the things that send the wrong signals to other investors. Your body language is not telling the international communities that you are open for business even though the words are there in policy papers.