Continued deterioration in electricity supply

Minister of Power, Prof. Chinedu Nebo

With each passing day, Nigerians are gradually resigning themselves to the grim reality that those who bought majority stakes in the country’s public power utilities lack both the managerial and financial capacities to take them to the next level. This is because three months after the privatisation of the Power Holding Company of Nigeria was consummated, Nigerians have yet to breathe a sigh of relief as the electricity supply situation continues to deteriorate to embarrassing levels.

Instead of the improved quality of service envisaged when the Electricity Power Reform Sector Act was promulgated almost a decade ago, many households now endure unending hours of power blackout, increased tariff and the usual estimated billings that ensure that consumers pay bills, whether they enjoy services or not. This has been made worse by the lack of interest in providing consumers with prepaid meters. On top of that is the constant drone of generators that makes getting a good night rest a virtual impossibility.

Recent reports have it that, from an installed capacity of 6,668 megawatts, power generation has dropped by 2,994MW. The nightmare will be further appreciated when it is realised that even at its peak, the system delivered less than 4,000MW. This has taken its toll on employment and industrial capacity utilisation and is especially hard on small and medium scale businesses. Thousands of companies, especially textile companies, have folded up, while many others have relocated to neighbouring countries that boast regular power supply.

It however depresses consumers even more when, amidst such a monumental crisis, President Goodluck Jonathan, whose duty it is to mitigate the condition, goes about telling the world that all is well, as he did recently at the World Economic Forum in Davos, Switzerland. There, Jonathan was unusually ebullient when he declared that Nigerians were enjoying longer hours of electricity as a result of the power privatisation.

Nothing could be further from the truth. His “Davos Declaration,” was reminiscent of his last infamous interview with CNN’s Christiane Amanpour last year, where he had said, “I would have loved that you ask ordinary Nigerians in the streets of Lagos, Abuja or any other city this question about power. This is one area that Nigerians are quite pleased with the government that our commitment to improve power is working.” Thanks to the social media; Nigerians reacted immediately, some of them informing the interviewer that they were watching the programme using generators.

The gulf between the government and the governed in the country is evident in the responses of the President on electricity issues. But if indeed Jonathan has been speaking based on his conviction of improved power supply, how come N836 million – close to N1 billion – has been proposed for the fuelling of generators in the Presidency and other ministries in this year’s budget? Does it show a commitment by the government to solving the electricity problem?

Needless to say, many reasons have been advanced for the dwindling fortunes of the power sector. Chief among them is the lack of capital to further invest and improve on what the investors met on the ground. Having provided the bulk of the capital that went into acquiring the unbundled PHCN firms, local financial institutions are either no longer willing to commit more resources to the project or simply do not have more to give.

There is also the complaint about the shortage of gas supply to the thermal stations. This is a problem that had been identified since 2007, when it was discovered that some of these stations were not linked to the sources of gas supply. Sadly, seven years after, this obstacle still remains insurmountable, having been compounded by pipeline vandalism.

This gloomy outlook has been further magnified by the breakdown of equipment vital to power generation and transmission. It was reported recently that at least, 48 pieces of critical transmission equipment had been out of order across the country. At its optimum, the Transyco, which recently came under the management of a Canadian firm, Manitoba, can barely handle 4,500MW, a mere drop in the ocean for a country requiring nothing less than 20,000MW, in the minimum, to function.

It is obvious that the privatisation of the companies unbundled from PHCN lacked transparency, paving the way for companies that had no antecedents in the power business to take over the GenCos and DisCos. But the government should not hesitate to intervene to revoke any sale in the interest of the nation if a particular company is found wanting.

Particularly, the government should ensure strict implementation of the Roadmap for Power Sector Reform, on whose crest Jonathan rode to power. There is the need to take on the power sector reform holistically, from generation to transmission to distribution. So far, the approach has been haphazard. The government also owes it a duty to effectively fund the transmission company, which is the only aspect of the power utility that was not privatised, but was contracted out to a management company.
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