Wasted Decade in Power Sector


Adeoba Michaels
A critical reading of the largely self-contradicting and self-indicting interview, granted the BUSINESSWORLD column of THISDAY by Dr. Sam Amadi, a former Chairman of the Nigerian Electricity Regulation Commission (NERC), and published in the newspaper’s edition of Tuesday, March 26, 2019, should have most appropriately borne the title, “ Sam Amadi’s Wasted Decade in the Power Sector” and not the hypocritical finger pointing headline given to it.

Indeed, reading the interview one is reminded of the assertions of Shannon L. Alder and Fulton J. Sheen, two famous Inspiration writers, concerning critics and their criticisms. While the former observes that often those that criticise others reveal what they lack, the latter sees the criticism of others as an oblique form of self-condemnation by the critics themselves. These observations could not be truer of a man like Dr. Sam Amadi, who as Chairman of NERC regulated the power sector and its operators for a decade. In fact, the entire interview was an expose of the inefficiencies and shortcomings that attended the privatisation exercise by the previous administration in which Amadi played a significant role.

In fairness, perhaps, one would say that he was honest enough to admit that there were flaws and inconsistencies in the privatisation exercise. For example, he admitted that the power assets were sold on wrong assumptions that the private sector investors would come with equity and improve on them. But by that admission, he also tacitly admits that the entire privatisation exercise of the sector was poorly executed with friends and cronies of those in government being the beneficiaries at the expense of investors that have the technical and financial capacities.

What he failed to add though was that he, as head of the regulatory body, carried out a tariff increase in 2014 only to reverse same due to political pressure. That reversal cost the government and the sector huge sums which would have been better deployed for the reform that was going and contributed immensely to the liquidity crisis in the sector. Worse still, that reversal marked the genesis of the problem of cost reflective tariff in the power value chain.

But, perhaps, what is most intriguing and also interesting, in the responses given by Amadi was that he asserted that growth in the sector in four years of the current administration should be greater than growth recorded in the 10 years post-privatisation. He also claimed that the sector achieved 80 per cent remittance.

In fact, to quote him, “At some point when we were there, there were up to 80 per cent remittance level and to think that debate has gone further down four years after means that where we are now is similar to where we were in 2013”.

First the comparison in growth; what are the parameters used in the measurement of growth during those periods? And if he admitted that the assets were “sold to people who had little financial assets to invest and didn’t have managerial competence to recover losses,” it stands to reason to assume that the investors were not only unable to deploy enough machinery for collection but also lacked the managerial competence to even check losses due to irregularities among consumers. So, the logical question is, where did the 80 per cent remittance come from? So far, records available from the Distribution Companies (DisCos), Transmission Company of Nigeria (TCN) and the Generation Companies (GenCos) do not support the assertion.

Then there is the question of where they left the power sector in 2015. As a regulator, Amadi should tell Nigerians what was the power output by May 29, 2015, when this administration took over. Of course Nigerians are not likely to have forgotten their experience with power when the last administration, of which Amadi was part, was leaving. If during the 10 years period he was referring to Nigeria had no sufficient grid power to distribute and four years down the line the narrative has changed from not enough power to challenges in distributing the power generated, what better parameter is there to measure the growth within the two periods. It is no longer news that there is 2,000 MW of grid electricity waiting for off-takers not to talk of the many more hydro and gas plants coming on stream this year.

And while we are still at the issue of growth comparison, I am sure Nigerians have not forgotten their experience with CAPMI which the Amadi-led NERC championed and how it turned out to be a big scam that put the present administration in the middle of a controversy; how so many people who paid for the prepaid meters had to wait for months or even years without getting them. Today, as a result of that default, the present administration and consumers are contending with the problem of estimated or crazy bills; consumers getting outrageous bills for power they did not consume. Thankfully, the present administration has by policy initiative, risen to the occasion with the introduction of the Meter Asset Provider (MAP) Regulation by which the supply of meters has been decentralised to allow private investors partake in the business under some regulatory conditions.

Perhaps the best way to respond to Amadi’s tirade is to refer Nigerians to some of the reported testimonies of Nigerians regarding their experiences in terms of electricity supply especially in the last three years. The place to start, of course, is the amount of generated power in 2015, which stood at 4,000 MW but which is now 7,000 MW and still growing; transmission capacity which was 5,000 in 2015 but now 8,100 and still growing; power distribution which was 2, 690MW in 2015 but for the first time in the history of power generation in Nigeria peaked at 5,222 by February 2016 and a more recent peak of 5,375MW in February this year.

The numerous power projects which have either been commissioned and operational over the last three years or currently being completed across the country are well reported in the media and the improvements therefrom are equally reported.

Today, for example, some states of the federation are reporting between averages of 16 to 18 hours of power daily. A particular state in one of the geopolitical zones has even reportedly complained of having 24 hours supply which they want reduced because of the cost.

In fact, in Odogunyan, Agbede and its environs of Ikorodu area in Lagos State, residents can attest to unprecedented constant power supply. I can say that authoritatively as a resident.
All these reports are out there and are verifiable. They also include the gradual but steady rehabilitation of NESI which was left in a mess by the time they were leaving.

Finally, let me return to the words of the inspiration writers I mentioned at the beginning- Shannon L. Alder and Fulton J. Sheen- and to say that it is only human for some class of people to resort to the pull-him-down syndrome when they see another person making progress where they could not when they had the opportunity.

Shannon L. Alder says such a person is only revealing what he lacks while Fulton J. Sheen sees it as an oblique form of self-condemnation. Let the reader take his pick.
.Michaels , a Public Affairs Analyst writes from Lagos