63 Years Of Electricity Mirage
Reliable electric power supply has remained an elusive mirage for millions of Nigerians, as well being a major factor underlying Nigeria’s economic woes. There is no prosperous nation, despite it’s natural endowments and strategic location on the globe, that is not backed by a robust power sector. Series of past Nigerian leaders appeared to champion national industrialisation. Apparently, they were not oblivious of the fact that industrialisation runs on the backbone of sufficient, steady, or predictable, electricity. Their past posturings notwithstanding, industrialisation has remained elusive while electricity for basic household uses remains a prayer point for most Nigerians, 62 years after colonial independence. According to reports, electricity power generation in Nigeria began in 1886 when two generating sets were installed to serve the then colony of Lagos while later in 1951, the Electricity Corporation of Nigeria (ECN) was established by an Act of Parliament. Shortly after Independence in 1962, the Niger Dams Authority (NDA) was established for the development of hydroelectric power.
Ten years later in 1972, both ECN and NDA were merged into the infamous the National Electric Power Authority, NEPA with the responsibility of generating, transmitting and distributing electricity across Nigeria. Similar to most post-independence government establishments, NEPA’s failures ranked those of the defunct NITEL and the Nigerian Airways. 32 years later, during the Olusegun Obasanjo – led civilian administration’s privatisation drives in 2004, NEPA was privatised into government-owned Power Holding Company of Nigeria (PHCN). As if there was something ominous about the phrase ‘Power Holding’ in PHCN which still held the free flow of electricity, PHCN was quickly unbundled, following an Electric Power Sector Reform (EPSR) Act of March 2005, to enable private companies participate in electricity generation, transmission, and distribution, in a wave of reforms that also swept off poorly performing NITEL. The Act also created the Nigerian Electricity Regulatory Commission (NERC) as an independent regulator for the energy sector.
The PHCN was unbundled into eleven electricity Distribution Companies (DisCos), six Generating Companies (GenCos), and a Transmission Company (TCN). Unfortunately, while the federal government privatised the GenCos and DisCos, it retained ownership of the TCN which then stood as a stifling bottleneck to both the production and consumption ends in the electricity business, by ‘holding’ central monopoly as the sole receiver of all generated electricity from the GenCos and the sole suppler to the DisCos, whereas government should have been only a regulator via the NERC, or at most an equal competitor like MTEL in the telecoms sector. It is therefore noteworthy that its the participation of government via TCN in the electricity business processes that holds the flow of power. Is it not abnormal that the TCN which does not bear the business risks nor benefits of investing in electricity generation or distribution infrastructure, solely manages electricity transmission network in the country? What is the stake of the TCN, and what motivates its priorities?
It is no wonder the TCN has not done the much needed overhaul of its inherited, dilapidated transmission infrastructure. As the energy sector continues to slumber in Nigeria, it is imperative to compare Nigeria with its African peers. According to the US Energy Information Administration’s 1980 – 2021 energy survey, most populous African nation, Nigeria with a population of over 220 million ranks 5th in energy production capacity at 11.7 Gigawatts, behind much less populated South Africa at 63.28 Gigawatts, serving a 60.41 million population, followed closely by Egypt at 60.07 Gigawatts, serving 112.7 million persons, Algeria at 21.69 Gigawatts for 48.6 million persons, and Morocco at 14.26 Gigawatts which serves 37.84 million persons.Nigeria ranks far lower if the comparison is computed on energy per head basis, where Libya which produces 10.53 Gigawatts for a 6.9 million population supplies over 1500 watts per head, Nigeria in comparison, supplies a paltry 52.18 watts per head. This is even lower, considering the actual power consumed due to transmission inefficiency, and the epileptic, unpredictable nature of our supply, unlike in West African neighbour, Ghana, where though production capacity is low at 5.35 Gigawatts for 34.12 million, the supply schedule is dependable to the extent that companies now exit Nigeria for Ghana due to power epilepsy, whereas their major markets remain in Nigeria.
Ghana is turning the Economic Commission of West African States’ free trade treaty to its advantage. Local businesses relocating to Ghana, a neighbouring country with stable electricity and a more business friendly environment, can produce and ship to countries within the ECOWAS free trade zone. In 2006, two of Nigeria’s leading tyre manufacturers, Michelin and Dunlop, relocated factories to Ghana citing epileptic energy supply in Nigeria as main reason. Other companies have since followed suit. The high unemployment rate, rapidly dwindling economy and a depreciating currency are some effects of these corporate decisions. South Africa and Botswana generate most of their electricity from coal to achieve more than 72 per cent universal electricity access in their respective countries, followed by Kenya and Senegal. Meanwhile Nigeria has rich coal and petroleum energy resources among others, that could be applied to boost its energy mix.
While the industrialised world has used fossil energy to hone their technologies to levels where universal electricity access through clean and renewable energy resources are now achievable, Nigeria would find it more difficult to use its fossils when global environmental conditions become critical, and may emerge as an old-fashioned polluter when, and IF, it does wake up. Considering that privatisation of the energy sector was a laudable reform, it emerged with a faulty structural constrictions posing as the TCN, which has knotted operators into a circle of vicious blame traders, whereas the much-needed commodity is kilowatt-hours. It is very obvious that the model of the reform structure that emerged in the telecoms sector would have been more appropriate as witnessed in the rapid transformations that followed the unbundling of NITEL, where government’s regulatory agency, the National Communications Commission, stood away from the daily operational processes of MTN, Econet, Glo and government-owned MTEL, enabling these operators to have end-to-end control of production, distribution and sales, as well as being able to solely pursue priorities that drive company objectives.
The manifesting benefits became outstanding, and transformational in proportions no one ever imagined. It is to the credit of Nigeria that these telecom companies, while competing to serve Nigerians, gained the enabling capacities that made them big international players. A vibrant energy company in Nigeria should have the enablement to independently plan its strategy, source its fuel, generate electricity, and distribute electricity directly to its consumers while NERC devises the appropriate energy metering modality and service ethics. It would be to the nation’s advantage if energy firms operate in a competitive environment by not allotting them exclusive coverage areas, a monopoly that breeds complacency. NERC should devise a means by which these firms run supply lines side by side in every part of Nigeria they have the capacity to operate. As every business is driven by profits and customer base, a company’s ability to control its business processes amidst competition, would enable it see the potentials that spur it towards innovations and expansion. Nigeria’s energy sector continues to slumber in the absence of total, private process control and free competition.
By: Joseph Nwankwo
Tinubu’s Ministers: Nigeria’s Messiah?
It is over one month since the swearing-in of the new members of President Bola Tinubu’s cabinet, precisely on August 21, 2023, sequel to their nomination and confirmation by the Senate. It can be said that competence appears to be the dominant consideration in the mind of President Tinubu in constituting his cabinet as many of the ministers have intimidating academic and professional records that qualify them for high and demanding public offices. Asides their academic prowess, Tinubu tends to have considered impact and valuable contributions as well as their wealth of experience in both private and public sectors towards nation building. The likes of Dr Bosun Tijani, who is the current Minister of Communication, Innovation and Digital Economy, prior to his appointment was the CEO of CcHUB, a technology innovation Centre which had led a number of social technology projects including Lagos Innovation Hotspots and the i-HQ concept. The ministry under his watch, no doubt is expected to create and formulate policies that will propel the Nigerian economy to a digitised economy. Same with Wale Edun, the Minister of Finance and Coordinating minister of the Economy. He is an economist, investment banker and a former commissioner for finance in Lagos state. The roll call of his cabinet members with such sterling credentials goes on and on. And let us not forget the former state governors in the cabinet who were carefully co-opted not just on the basis of party affiliation, but on competence and performance.
Now, the dice is cast! The stage is set! The ball in their court! 46 days have passed and the time keeps counting by every tick of the clock. The hopes of Nigerians for a transformed, innovative and sustainable development are hanging on President Tinubu and his cabinet. Admittedly, the performance of any government is directly proportional to the quality of its elected or appointed officials. That is why presidents, and governors in any given government often recruit the right people to oversee the various sectors of the economy as ministers or commissioners, knowing that sectoral excellence positively affects the overall deliverables of government. Hence, Tinubu’s ministers will have a lot in their hands as they have officially kick-started their ministry’s assignment against the backdrop of economic hardship occasioned by fuel subsidy removal and continued devaluation of naira which has degenerated into high rate of inflation.
As it stands, Nigeria is obviously going through difficult times – broke- and in serious need of resources to revamp the ailing economy and invest in human capital and infrastructure; cognisance of the facts that the past administration plunged the country into a debt abyss. Nigeria’s total debt stock stood at N46 trillion as at March 2023, according to data by the Debt Management Office (DMO). President Tinubu recently said that servicing Nigeria’s external debt with 90 percent of the country’s revenue was not sustainable. This came after KPMG, on the 19th May, 2023 projected that Nigeria’s debt service-to-revenue ratio may exceed 100 percent this year. A figure which was later pegged at 73.5 per cent by DMO, saying it was unsustainable.
According to reports, prior to the aforementioned projections, Nigeria had spent 80.6 per cent of its revenue on debt servicing with the hope that it would drop steeply to 60 per cent before the end of the year. With this and many other challenges facing Nigeria as a nation, much is expected of the newly sworn-in ministers. Nigerians anxiously want to see changes in their lives. Just a few days ago, a Nigerian woman said nothing meaningful had been seen from the ministers since assumption of office. “I was expecting everything to be settling down, now that the newly appointed ministers had been sworn-in”, a middle-aged woman who simply identified herself as Sister Kate decried. Asked why Kate said, “We are believing that the ministers will turn things around and deliver the Renewed Hope Agenda of Mr. President to us. “ Whether coming too early or not, her belief is a pointer that Nigerians are eagerly waiting for a change – the reality of the Renewed Hope Agenda.
To accentuate the above, President Tinubu, during the Ministers’ inauguration tasked his cabinet members to meet the expectations of Nigerians for a renewed socio-economic development. “Your assignment begins immediately, and you must work to make yourself worthy of God and the people to make Nigerians believe that the right hands are chosen.”I believe in you and hope the government will be a progressive way to gain public confidence and trust. “Nigerians expect you to hit the ground running just as we had promised them during our campaigns. With your inauguration today, you have become ministers of the Federal Republic, not ministers of a particular state or region.” the president said.” That is the simple truth. The entire Nigerian populace is counting on Tinubu and members of his cabinet to redeem our ailing economy before it becomes unredeemable”, Mr. Kelvin Emeka, an economist said. Emeka noted that the first task of Tinubu’s cabinet is to re-awaken the economy and address the prevalent increase in prices of commodities so as to nip hunger in the bud.
In a chat with Alhaji Ibrahim Usman, an Abuja-based political analyst, he said the newly sworn-in ministers are the force that will drive Tinubu-led administration into fulfilling his electioneering promises. According to him, the ministers must give prior attention to policies and projects that are geared towards addressing the hardship currently in the country. “I can tell you; we are just looking up to the ministers; to face the reality in the country now. “I think it will be good if the newly sworn-in ministers will make it a point of duty to implement policies and projects that will alleviate the sufferings of Nigerians”, he said. The future that Nigerians hoped for, voted for and eagerly await is not unattainable. Though the deplorable systems, endemic poverty, bad governance, and dire situations may appear to dash the hope of a better Nigeria, but the onus to rescue the situation and bring back hope to Nigerians, lies in the hands of Tinubu’s ministers. This is the burden every minister must bear in the course of managing his/her ministry. The hopes of Nigerians lie in your hand.
By; Calista Ezeaku
Averting More Hardship On Nigerians
Barring any last minute intervention, Nigerian workers under the aegis of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), will on Tuesday, October 3, down tools over the federal government’s failure to address excruciating suffering and socioeconomic hardships across the country, occasioned by the removal of subsidy on Premium Motor Spirit (PMS), commonly known as petrol. Concerns have been raised over the frequency of labour strikes in the country and the fact that the previous strikes and protests hardly yield any positive results. Some people have observed that strike has become an easy way for the labour leaders to enrich themselves as they would suspend the strike as soon as the government greased their palms and left the workers, their followers to their fate.
Despite these, one would want to believe that the labour leaders cannot afford to dash the hope of millions of the citizens who look up to the labour unions to compel the authorities to sit up and take the necessary measures to bring the country and the citizens out of the current economic quagmire. A public analyst described Nigerians as “very nice and understanding people”. Perhaps that explains the quietness in the land, that despite the excruciating hardship, exacerbated by the floating of the Naira, removal of fuel subsidy and other economic policy so far put in place by the current government Nigerians – the poor, the middle class, the elite have remained cold. The youths are busy watching “Big Brother Naija” and seem to care little if the country is sinking or not.
So, Joe Ajero of the NLC and Alex Osifo of the TUC must restore the peoples’ trust and confidence in the unions, stand with the people and ensure that the strike yields positive results before it is called off. It has been four months since the unwanted pronouncement “fuel subsidy is gone” which has thrown the country into a severe energy crisis, ruptured the economy and made life hellish for the masses. Yet all the palliative measures promised by the federal government to cushion the effect of the removal are hardly seen. The buses to facilitate movement of government workers and other citizens are not there. The food items said to have been given to states to be distributed to the citizens are not within the reach of non-members of the ruling political parties in the states.
The free fall of Naira is unimaginable. It has passed the N1,000 rate against a dollar and there is no assurance that it will not get N1500 per dollar before the end of the year. Zimbabwe here we come. What about the scarcity of forex? People now pass through trauma getting foreign currencies to do their business, pay school fees, hospital bills and all that. One logical argument is that Nigeria’s woes predate Tinubu’s administration. That is a fact. But another undisputed fact is that Tinubu’s policies have worsened the situation. It is also true that the reason for having people in charge of institutions or entities is for them to direct the affairs of such bodies unto greatness and solve the problems that may arise.
Right from the time the debate on fuel subsidy removal was raging, some experts had warned that any policies that will throw the country into an energy crisis would have a devastating effect on the nation since everything in the country revolves around crude oil/ energy but little attention was paid to them. Nigerians rather believed the side of the story that stated that the cost of maintaining the subsidy was putting a serious strain on the country’s budget, and that removing the subsidy could free up funds for other critical sectors, such as healthcare, education, and infrastructure. Today, the country knows better. Has it not dawn on all and sundry that reliable and affordable energy is essential for the development of the country and well-being of citizens; that stable and secure energy supply is essential for economic activities, industrial production, and the functioning of critical infrastructure in the country; that fluctuations in energy availability or price volatility can directly impact Nigeria’s economic stability and that energy disruptions can lead to production slowdowns, increased costs, and economic downturns?
Therefore, the sooner the subsidy removal policy and the likes are reviewed with the aim of reversing the unworkable ones or introducing policies to stabilise things in the country, the better. The leadership of the country just has to find a way around these issues. It is a quality of good leadership not weakness to backtrack when a policy is not working or is causing more harm than good. And what better solution is needed at this precarious time than making the nation’s refineries functional. This has become the song of many concerned Nigerians including the labour unions. The refineries should be made to work as quickly as possible and new ones built so that the exportation of crude only to bring it back as a refined product must stop. In the international market crude oil is getting to $100 per barrel. Nigeria should be happy about it just like other oil producing countries instead of facing increasing hardship internally.
The current administration must do everything possible to meet the demands of the workers so that the proposed indefinite strike does not shut down the system. President Tinubu should personally meet with labour leaders and tell them the truth about the state of the nation and the measures he intends to take to pull the country out of the woods. In the past few days, the presidency has fed Nigerians with many lies – Tinubu is the first African leader to ring the National Association of Securities Dealers Automated Quotations (NASDAQ) bell, the United Arab Emirate (UAE) has lifted the visa ban on Nigeria and all that. Only for them to retract the information and say they were not true. Too bad. Government for once, should be open to the citizens. As noted earlier, Nigerians have the reputation of being good and understanding citizens. If they know the truth and see the sincerity of the leaders to make things right, they will be willing to tighten their belts for the betterment of the country.
But let the leaders both the president, the vice president, governors and their deputies, federal and state lawmakers, ministers and all those in government lead by example. You cannot tell the people to tighten their belts when they see you every time you loosen yours. The cost of governance and the cost of opulence in government must be reduced. As a matter of fact, many people had expected Tinubu to pick up Steve Orosanya’s report and merge some ministries, agencies and departments and have a lean and workable government. But the contrary is what we see. He has exceeded the constitutional requirement of 36 ministers. We now have 48 ministers and still counting with numerous Special Assistants, advisers and the likes. Must everybody be in government at the same time? If the system is working, political appointments and politics will not be seen as the ultimate because people will profit from any other thing they do.
To whom much is given, much is expected. The position of Tinubu as the president has just been further solidified by the presidential election petition tribunal. He has gone to the United Nations General Assembly and other countries to woo investors to Nigeria. It is time for him to sit down and draw a clear, workable roadmap on how to deal with the numerous challenges in the country so that investors will find the country attractive. The issue of corruption and insecurity across the country, economic hardship must top the list. All the states in the country have their unique endowments. It is time for the state governors to maximise these potentials so as to raise the economy of their domain instead of some of them folding their hands and waiting for monthly federal allocations. The states must be the drivers of Nigeria’s economy as it is seen in many countries of the world. It is said that he that seeks equity must come to equity with clean hands. Nigeria cannot be good as desired if all Nigerians at our various spheres of influence do not shun corruption and imbibe integrity. Patience and understanding are also required from the citizens knowing that what has taken a long time to destroy cannot be restored in a day.
By: Calista Ezeaku
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