Stakeholders have reached a consensus of opinion on the state of power supply in Nigeria.
Speaking on AIT Electricity Town Hall Meeting titled: “Ending the Electricity Crisis” on Wednesday, the stakeholders comprising sector players, experts, and consumers were unanimous in their view that the reform which culminated in the privatisation of the upstream and downstream segments of the Nigeria Electricity Supply Industry (NESI) in 2013 has failed completely, warning that urgent review of the reform had become imperative.
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Maintaining that the privatisation experiment was a total failure, the Secretary General, National Union of Electricity Employees ( NUEE ) & Deputy National President, Nigerian Labour Congress, NLC, Comrade Joe Ajero who joined the meeting virtually in Lagos was of the view that the lamentation over the crisis in the power sector came about because the Nigerian government handed over the power asset to the private operators prematurely without considering the huge investment and long gestation period involved.
He maintained that all three segments of the Nigerian electricity value chain have failed woefully, adding that one cannot be beating his chest saying that he is giving Nigerians 4,000 mega watts, MW, of electricity which was achieved 20 years ago under former President, Olusegun Obasanjo.
“You can’t be talking of giving Nigerians 4000 megawatts now. When OBJ came on board, under Liyel Imoke in 2002, They repaired some of the power plants and we had 4000 megawatts.
If in 2022, you’re still talking of the same 4,000 megawatts, then the experiment on privatisation or whatever is a total failure,” he said.
He blamed the states for not making effort at their level towards growing the power sector to perform optimally.
According to him, the states in Nigeria, just like in any other government around the world, have the responsibility of generating, transmitting, and distributing electricity, but which has been ignored by states in the country.
“It’s when you reached the optimal level that you begin to think of who manages it for you. No power generation company can build a power plant. They can’t do that. The distribution companies (DisCos) we are seeing today, the banks are taking over. And that was what we told Nigerians, that these guys don’t have the resources.
“They ran to Nigerian banks to obtain loans to buy the assets, and the banks are now running the distribution companies. But they claimed they were coming with Foreign Direct Investment, which didn’t come from anywhere, even as the banks are equally having liquidity problem,” he said.
He noted that in addition to the about N400 billions received as debts owed the defunct PHCN by the DisCos, the federal government had invested more than 2 trillion in the market, all to no avail, “and you keep on telling us that government has no business in business”.
Speaking further, he said, “I see this as a national emergency which requires that we the stakeholders come together to proffer solution, and you find out, how many years will it take for a generation company to construct a power plant? A minimum of three or four years. How many years will it take them to recoup their profit? a minimum of 15 years.
“Now, is the Nigerian investor ready to build a plant and recoup profit within 15 to 25 years. We need to ask who will come into that area to invest, and if the person invests with loan, how is he going to service the loan?
Earlier in her response to the question, why are Nigerians still in darkness?, the Executive Secretary, ES, Association of Power Generation Companies, APGC, Dr (Mrs) Joy Ogaji, who was one of the panelists noted that the generation end of the value chain had been able to meet its own end of the bargain based on the fact that it can only generate what can be transmitted and distributed at any point in time, which, according to her, the generation companies had been meeting, with extra capacity that is not put to use.
She said, “We the degeneration companies have kept the contracts that we signed with the Bureau of Public Enterprises, i.e. BPE, in 2013 to ramp up capacity to 5000 within a period of five years, from 2013 to 2018 October. Anybody that wants to check the data should go and check the industry data and they will see that by the 2018 we had even exceeded 5000.
“By 2018, the country was having available duration of about 7,500 megawatts and above. But if you want to know why Nigerians are not having light, it’s between transmission and distribution; they were have not been able to take between 2013 and today more than 4000 megawatts.
“Sometimes, for a few seconds, they would take up to 4200, other times, for a few seconds, they said they had gone up to 5000. But sustained utilisation of what is being made available has not happened.”
Dr Ogaji believe that the demand forecast from the System Operator, SO, that stands currently at about 28,000 was a mere fantasy since in nine years of post privatisation, only 4000 mega watts is what is achieved.
She attributed the challenges bedeviling the sector to what she described as a Nigerian factor of flouting contract agreement with no consequence.
“The Nigerian factor is such that we rush to sign contracts; we can quickly enter into an MoU even moved into a contract which we do not intend to keep to. That’s one of the reasons why we’re in darkness. The second one is bureaucracy,” Dr Ogaji said.
In his submission, the Executive Director, Research And Advocacy, Association of Nigerian Electricity Distributors (ANED), Chief Sunday Oduntan, said the inefficiency of the Nigerian power sector could not be blamed on any segment of the value chain alone, adding that the problem is an aggregate of the inefficiency of the generation, transmission, and distribution sub-sectors.
“The three layers of the value chain – generation, transmission, and distribution have failed the country. Why have we failed? If you have over 200 million people in the country, and you need to serve over 32 million people or households, why should we be saying celebrating that we’ve done 10,000 megawatts, we’re doing 4,000 or 5,000,” he said.
According to Oduntan, the truth is that enough is not being generated, and the little effort being put in by generation companies, GenCos, is not being complimented by the transporter of the product – the Transmission Company of Nigeria, TCN, even as the the distribution companies are not efficient.
He however identified transmission as the major bottleneck along the country’s electricity value chain, adding that TCN has never been able to wheel 100 per cent of what is generated to the DIsCos.
Another panelist who also joined the conversation virtually, former GM, NEPA / PHCN, Engr Cyprian Nwachukwu, on his part admitted that even before the privatisation stage of the reform, most of the infrastructure belonging each of generation, transmission, and distribution segments were in seriously in bad shape, with transmission lagging behind others.
According to him, the monies approved by the federal government at the outset were not effectively utilised as not all the contractors were able to complete their projects across the value chain.
He equally traced the genesis of the crisis to DisCos’ non-transparent and poor management of funds that acrued from the debts owed the defunct PHCN which were inherited by the DisCos from at privatisation.
“With privatisation, many of the DisCos were not playing clean. They were collecting all the arrears that NEPA had which was in their books, and they were not remitting so much to government purse,” Engr Nwachukwu said, adding that at the same time, many of TCN’s equipment were not in good shape at all, and were breaking down every now and then.
Speaking from the consumer perspective, President , Nigeria Consumer Protection Network, NCPN, and member, National Technical Investigative Panel on Power System Collapses / System Stability and Reliability (June , 2013) Kunle Kola Olubiyo, blamed the sectorial quagmire on inability of the Nigerian Electricity Regulatory Commission, NERC, to conduct regular checks and audit of the system and ensure that monies meant for public interest are properly remitted.
“You have the BPE, you have the NERC and other regulatory institutions that are suppose to to monitor the system and make sure that such money in public interest are properly remitted,” he said.
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