OPINION: Let There Be Light, Except in Nigeria by OWEI LAKEMFA - EazyFeeds

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Thursday 30 March 2017

OPINION: Let There Be Light, Except in Nigeria by OWEI LAKEMFA

When God cre­ated the world, according to the Bible, it was dark. God said ‘Let there be light, and there was light’ the probable exception is Nigeria where for over fifty years; the people have been subjected to almost eternal darkness. The senior staff of the power sector complained in 1988 that the country was neither maintaining its pow­er plants nor are there solid plans to expand. Over this, they went on strike. The Ba­bangida regime saw this as an affront, rounded up eleven of the workers leaders and put them on trial for treason de­manding the death penalty. They eleven were sentenced to life imprisonment.

The Obasanjo administra­tion spent $15 billion pur­chasing darkness for the country. The Jonathan ad­ministration thought it had a brilliant idea; privatize the power sector thereby saving the country funds and simul­taneously improving power generation and supply in the country. In 2012, it carried out genetic engineering on the Power Holding Company of Nigeria (PHCN) It cloned from it, eleven Distribu­tion Companies (DISCOS) six Generating Companies (GENCOS) and one Transi­tion Company. With fanfare, it auctioned the DISCOS and GENCOS to private com­panies while government retained the Transmission component to transmit pow­er from the GENCOS to the DISCOS. So the single bu­reaucracy of the PHCN gave way to eighteen just to gen­erate and distribute a meager 4,500MW of electricity to 183 million people!
The sale was controversial and some of the private companies like the one in Yola, did not pay up be­fore the power sector was handed over to them. The Foreign Direct Investment the country was told would flow in for the purchases, did not materialize; rather, the money was sourced locally. With privatization, there is no known value added; new transformers were not bought and the pre-paid meters the new companies promised, have largely not materialized. The DISCOS preferred to do estimated billing for consumers which means even where they sup­ply darkness, consumers are forced to pay. There are also complaints that the DISCOS sometimes refuse to pick power from the GENCOS in order not to pay the latter. In fact, some of the companies were accused of asset-strip­ping. The 10 percent shares in the privatized companies reserved for workers under the law were not given. Rath­er, the new employers turned permanent work into casual work and most denied the staff, the right to the consti­tutionally guaranteed right to unionize. Rather than the sector improving, it became ever more unreliable. Some communities have protested not being supplied electricity for one to two years!
While it was thought that with privatization, public funds would no longer be expended on the sector, the Jonathan administration through the Central Bank coupled N213 billion for the private companies in the name of an Electricity Mar­ket Stabilization Fund. If it is a loan, it is not known whether the companies are paying back or will ever pay back.
With the new administra­tion, not a few of us called for the review of the sec­tor’s privatization as we were convinced that the country was short-changed and that almost all the new owners were incompetent and inca­pable of running the indus­try. As if to prove our point, power generation which in the pre-privatization some­times hit 4,500 MW came to as low as 2,200MW before attaining its current aver­age of 3,400MW. To worsen our plight as a people, all that the new owners sing is; increase the tariff. In this they are backed by the Nigeria Electricity Regula­tory Commission (NERC) a ‘regulator’ which is actually the mouth piece of those it was established to regulate. When Nigerians protested arbitrary tariff increases and won their case in court, the NERC vowed not to obey our courts.
Four years after privatiza­tion, officials of the Minis­try of Power paint a pitiful picture of the power sector describing it as a disaster. However, they do so, not in a critical manner but as a way of making excuses for the failure of the GENCOS and DISCOS, and making a case for an amount as huge as N702 billion to be taken out of the country’s lean purse to shore up the failed or failing private companies. In addi­tion, they made a case for an additional N495billion debt owed by the companies to be paid or written off by gov­ernment.
As to how the country can raise such huge funds, they propose a $10.2 billion ‘fa­cility’ from the World Bank. That means, they want to fur­ther bloat our foreign debts thereby complicating the country’s budget deficit. To push government to bailout the companies, the Ministry officials proclaimed that the debt of these seventeen pri­vate companies could bring down the banking sector!
Our officials lament that while the DISCOS expected to collect an average N71 billion monthly, they col­lect only N33 billion and that as a result, they only pay one quarter of the cost owed the GENCOS. They also campaign that the GEN­COS are having to pay high costs for gas and to use water and dam facilities. I won­der whether these private companies that were touted as high flying, did not make market surveys or have busi­ness plans before bidding.
THE DISCOS AND GEN­COS FROM ALL APPEAR­ANCES, ARE BANKRUPT COMPANIES WHICH NEED TO BE TAKEN OVER; POURING HUGE SUMS OF MONEY INTO THEM IS LIKE POURING WATER INTO A BASKET. Since privatization has not resulted in improved power generation, distribution or better efficiency in the sec­tor. Given the marked in­competence and bankruptcy of the companies, it makes no sense for us to continue using scarce public funds to bottle feed them. We need to cut our losses and build a power sector that can bring results. There is no alterna­tive than for us to revert the power sector to public own­ership; the overall interest of the country will be better served.

Owei Lakemfa wrote through an online medium.

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