By Jérôme-Mario Chijioke Utomi
Similar to history, which according to historians, is an endless dialogue between the present and the past through a continuous process of interaction between the historian and his facts to help the anxious researcher improve the present and the future Based on a clearer understanding of past mistakes and achievements, the challenge of converting electricity supply in the country has become, like history, neither endless nor declining.
Essentially, the first half of this recurring circle was captured recently in my article titled FG insurance on the production of 25,000 MW of electricityas it explains why Nigerians are no longer comfortable with the assurances of the Federal Government, this article which qualifies as the start of something new has been prompted in response to a statement by Garba Shehu, the presidential speech.
Shehu, who spoke in an interview on a Channels Television program, Sunrise Daily, among other things said; that President Muhammadu Buhari has significantly improved electricity production in the countryhe concluded.
Let’s face it; he spoke convincingly with a real authority that comes from the position he holds. However, the only difference here is that contrary to history, his race for facts, particularly his fervent belief that the nation’s electricity prospects remain good, in the face of the current epileptic power supply and tariff regime unjustifiably high in the country, has in no way advanced our conversation or aided the nation’s quest to find a quick solution to its power/power crisis.
Let’s face it; it is true that the Electricity Reform Act of 2005 (EPSR, ACT of 2005), which provided for the privatization of the electricity sector, did not go far before the administration of President Olusegun Obasanjo left his office in 2007. Yes, it is also partly true that the current frustration in the sector has been further fueled by the reality that the current federal government, as Garba Shehu noted in the interview, inherited the reckless privatization of the electricity sector carried out by the Goodluck Jonathan administration (the 2010 Electricity Sector Reform Roadmap), despite the validity of these claims, yet Shehu’s analyzes for reasons did not go without opposition.
First, there is enough evidence to support the fact that no administration in the country, not even the current Federal Government headed by Muhammadu Buhari, can boast clean hands when it comes to Nigeria’s electricity crisis.
Without going into the analysis to establish to what extent each of these administrations appears culpable in this affair, a point, in my opinion, that should not be overlooked when discussing the electricity crisis in Nigeria, is that the issue has nothing to do with privatization. It is neither driven by the desire to draw up a real roadmap to restore the health and vitality of the sector, nor by the ongoing effort to bring about a new tariff regime.
Rather, it is simply and bluntly a conceptual problem of what the successive federal government has done that has never been in the best interest of the people, the nation and the sector.
The fundamental element of the challenge is the operation of the outdated grid system, an arrangement where electricity generated in the country is pooled/assembled or routed to a control/switching center before finally being distributed to consumers across the country.
Besides being called a clumsy arrangement and being operated in an environment of outdated transmission lines and facilities that cannot sustain supply over time, the practice itself, according to industry observers, is not only old-fashioned, old-fashioned, but visibly runs counter to the overall vision/model that currently favors decentralization of power generation and distribution.
In my opinion, the centralization of energy/power has never helped the socio-economic development of a nation eager to progress industrially.
There is yet another frustration, this time fueled by the painful realization that instead of acting as a regulator of the energy sector, successive administrations “for reasons yet to be identified choose to operate in the sector of the country’s energy as both “captain and coach”, – holding shares in Gencos, Discos and TCN.
This has happened despite breakthrough studies that suggest the private sector is likely to better understand the location and nature of the market failures/bottlenecks/barriers that inhabit the IT sector. energy.
It has also been argued elsewhere that the government’s ability to design and implement an appropriate resolution to identified market failures/bottlenecks in the sector is often still embroiled in controversy.
Of these “persistent” failures/failures on the part of policy makers to define the electricity generation and distribution business in the country and the lack of a clear strategy to enter it profitably, or allow conventional forces of the market to determine electricity tariff regimes in a way that will lead to the realization of the economic rights of investors while expanding the fundamental freedoms and choices of individual consumers; and with the government, the reluctance to follow quickly, the “changing needs of the times”, which are of course the sufficient ingredients of far-sighted decision-making and the condition which any leader wishing to succeed must constantly fulfill, it is obvious that the nation’s managers ultimately left the survival of the sector to chance.
As we know, anyone who does not seek their potential leaves their survival to chance.
Again, it is weak regulations and haphazard oversight like this that largely favors a situation where, according to one commentator, an electricity consumer buys a pole, cables, a meter and contributes money to buy or replace the community transformer; and, as soon as this is done, they automatically become the property of Disco and the electricity distribution companies will, without reading the meter, send outrageous estimated bills that it has never consumed.
This is not the only apprehension. There are also unforgivable breaches of trust within the sector.
The first that comes to mind is the recent report that the Senate Public Accounts Committee opened an investigation into the N14.7 billion proceeds from the privatization of the defunct Power Holding Company of Nigeria (PHCN) allegedly hidden in commercial banks by the Bureau of Public Enterprise (BPE).
The committee acts on an audit matter in the “Auditor General of the Federation’s Annual Report on Issues of Non-Compliance/Internal Control Weaknesses in Ministries, Departments and Agencies of the Federal Government of Nigeria for the Year Sec ending on December 31, 2019”.
Before the dust raised by the disturbing/worrying development above could settle, another was in place. This time it is a new awareness of how TCN, DISCO inefficiencies have caused power generation companies about 120.25 billion naira in stranded energy which amounted in average at 2,448.50 megawatts each month in 2021.
According to industry data cited by Business Standards, an average of N13 billion was lost every month by production companies. This is the total monetary value of the volume of electricity produced by generation companies but which unfortunately could not reach consumers either due to infrastructure problems or because they were rejected by the distribution companies for fear of not being able to recover the money from consumers.
What the development above tells us is that it is difficult to implement meaningful change when institutions are the cause of the problems in the first place.
It also suggests that designing prosperity without addressing the root cause of the problem and the policy that keeps them in place is unlikely to bear fruit, because the institutional structure that creates market failure will also prevent interventions from being implemented.
To catalyze the process of serving the sector, we must recognize that what we need today may not be a new theory, a new concept or a new framework, but people who can think strategically with a balanced perspective.
Utomi Jerome-Mario is the Program Coordinator (Media and Public Policy), Social and Economic Justice Advocacy (SEJA), a Lagos-based non-governmental organization (NGO). He could be contacted via [email protected]/08032725374.