For long now, the country’s conversion on electricity power supply challenge has become neither endless nor subsiding which is likened to History, which Historians define as “an endless dialogue between the present and the past through a continuous process of interaction between the historian and his facts to assist the curious questioner improve the present and future based on a clearer understanding of the past’s mistakes and achievements”.
In essence, Nigerians are no longer confident in the Federal Government’s pledges because they are prone to making promises but failing to follow through. So, this piece, which we dubbed “the start of something new in the Federal Government,” was elicited in response to a statement by presidential spokeswoman GarbaShehu. Shehu asserted, among other things, that President Muhammadu Buhari has considerably improved the country’s electricity generation in an interview on Channels Television’s Sunrise Daily programme. ‘Since 2015, the government has increased electricity generation by 200 times,’ he says.
He delivered his message with the authority that comes with his position. However, unlike in the past, his reliance on facts, particularly his fervent belief that the nation’s electricity outlook remains positive, despite the country’s current epileptic power supply and unjustifiably high tariff regime, has not advanced our discussion or aided the country’s quest to find a quick solution to its electricity or energy crisis.
True, President Olusegun Obasanjo’s government did not get far with the 2005 Electricity Reform Act (EPSR, ACT of 2005), which provided for the privatisation of the power sector. Yes, it is also true that the current frustration in the industry was exacerbated by the fact that, as Garuba pointed out during the interview, the current Federal Government inherited a hasty privatisation of the power sector by the Goodluck Jonathan government (the roadmap for power sector reform of 2010), Regardless of the correctness of these allegations, Shehu’s analyses and reasons did not go unchallenged.
First, there is ample proof that no administration in the country, including the current Muhammadu Buhari-led Federal Government, can claim to have kept its hands clean when it comes to the crisis in electricity generation in the country.
Without delving into the details of how responsible each of these governments appears to be in this case, one issue that should not be forgotten when discussing Nigeria’s power or electrical crisis is that the problem has nothing to do with privatisation, in my opinion. It is not motivated by a desire to create an authentic plan for restoring the sector’s health and vigour, nor is it a result of the current drive to establish a new tariff system. Rather, it is a philosophical issue with what successive Federal governments have done, which has never been in the best Interests of the people, the nation, or the sector.
The operation of the outmoded grid system, in which power generated across the country is pooled, assembled, or directed to a control or switch centre before being delivered to consumers across the country, lies at the heart of the problem. Aside from being a clumsy arrangement that operates in an environment laced with outmoded transmission lines and facilities that can not hold supplies overnight, industry watchers say the practice is not only out-of-date and archaic, but also directly contradicts the global vision and model that favours decentralisation of energy generation and distribution.
Energy or power centralization, in my opinion, has never aided the socioeconomic development of any nation seeking industrial advancement.
There is yet another source of annoyance, this time fueled by the painful realisation that, rather than acting as energy sector regulators, successive administrations choose to act as both “captain and coach” in the nation’s power sector, owning shares in Gencos, Discos, and TCN, for reasons that remain unknown.
This is despite ground-breaking research that suggests the private sector is more likely to grasp the location and type of market failures, bottlenecks, and impediments that exist in the energy industry. It has also been stated elsewhere that the government’s ability to devise and implement effective solutions to observe market failures or bottlenecks is fraught with dispute.
In Nigeria, the following have always been the bane of our electricity generation: Consistent policymakers’ failures to define the country’s power generation and distribution business; a lack of a clear strategy for profitably penetrating it; restricting traditional market forces from determining electricity tariff regimes in ways that will lead to the realisation of investors’ economic rights while expanding fundamental freedoms and choices for individual consumers; and government unwillingness to respond quickly to the chasm by acting fast to embracing innovative ways of power generation. Of course, these are the necessary ingredients for foresighted decision-making, as well as the conditions that every leader eager of success must continually meet. The survival of the industry has clearly been left to chance by the nation’s handlers.
As we all know, if you do not discover your potential, you are surely gambling on your survival.
Again, it is weak regulations and sloppy oversight like these that largely promotes situations where, according to one commentator, an electricity consumer purchases a pole, cables, metre, and contributes money to buy or replace the Community transformer; and, once that is done, they automatically become the Disco Property. And, without taking a metre reading, the electric distribution companies will send him or her exorbitant anticipated bills for electricity he or she never used.
This is not the only reason for concern.
Within the industry, there is also some unforgivable mistrust.
The first that comes to mind is a recent report that the Senate Committee on Public Accounts has launched an investigation into N14.7 billion in proceeds from the defunct Power Holding Company of Nigeria (PHCN) privatisation that were allegedly hidden in commercial banks by the Bureau of Public Enterprises (BPE). The committee is responding to a question raised in the ‘Auditor-General for the Federation’s Annual Report on Non-Compliance and Internal Control Weaknesses Issues in Ministries, Departments, and Agencies of the Federal Government of Nigeria for the Year Ended 31st December 2019’.
Before the dust had time to settle from the preceding troubling or concerning development, another had risen. This time, it is due to a greater understanding of how TCN, DISCO’s inefficiencies affect the industry. Electricity Generating Companies lost around N120.25 billion in stranded power in 2021, with an average monthly output of 2,448.50 megawatts.
Generating corporations lose an average of N13 billion every month, according to industry data published by Business Standards. This is the total monetary value of the volume of energy generated by generating firms but which was unable to reach customers owing to infrastructural issues or because distribution companies rejected them for fear of not being able to recoup the money from consumers.
What the preceding development tells us is that implementing meaningful changes is difficult when institutions are the root cause of the problems in the first place. It also suggests that engineering prosperity without confronting the root cause of the problem and the politics that keeps them in place is unlikely to bear fruit, as the institutional structure that causes market failure will also prevent interventions from being implemented.
To jumpstart the process of serving the industry, we must acknowledge that what we really need right now is not a new theory, concept, or framework, but individuals who can think strategically and from a balanced standpoint.
