Vanguard (Lagos)

Nigeria: Generator Economy and the Power Crises

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Lagos — These statements will be considered heresy, the utterance of the ignorant, for they contradict the popularized view of corruption.

But the signs of corruption as systemic, structural, institutional and institutionalized are also everywhere around us.

These signs are not the facts reported as corrupt practices. Corrupt practices are the symptoms not the disease.

Corruption is in the very structure of government and its routine practices. Once in a while the veil is taken away, the clouds are dispersed and we are face to face with corruption but fail to recognize it for what it is because of the ideas we have about it.

And because we cannot recognize it, we therefore cannot understand it, and we therefore make our own idea of corruption the reality of corruption. No wonder the more things seem to change, the more they remain the same.

In bold headline in the front page of the Vanguard of January 28, 2008, Corruption was on display. But how many of us recognized the Real Thing? Ironically that thing shared the place of honour with the picture of the Vice President, his wife and a pastor.

The contrast could not be more glaring. Corruption wore the disguise of funds Nigerians spend annually to fuel their generators.

I know from personal experience what this form of corruption is, for I know how important electricity is to me. In this age and times, I have the following back up to NEPA for NEPA is NEPA no matter its change in name:

-Candles;

-Rechargeable Lanterns;

-Personal generator;

-A share in the estate generator.

When NEPA fails, and the generators are in need of repair, and the rechargeable store of power is expended, I resort to candle, at dawn and at dusk. Why all this backup? So that I can have continuous supply of light.

What we do with respect to electricity, we do same with respect to water. I have had over the past decade and a half not depended upon private sector or public sector supply of water. I have had to invest in a bore hole to obtain water. But this effort is ambushed by the stiff-necked NEPA. Pumps need electrical power to make them work.

I suppose that is why the idea of solar power has become also an urban need for any seriously concerned about steady power supply for work. So I know of this corruption at the household level. I could quickly appreciate its reality behind the staggering figures quoted in the Vanguard report of Monday, January 28 2008.

"Nigerians spend N16.408 Trillion to fuel generator annually. The business community's hope that President Umaru Yar'Adua will address the power issue frontally as he indicated during his campaign has been dashed as the President has demonstrated his inability to declare a state of emergency in the power sector."

This is the headline of the investigation report of Omoh Gabriel and Hector Igbikiowubo. The following are the details of their report.

"Nigerians spend about N16.408 Trillion annually on fuelling generators in the country. The break down shows that in the telecom sector, N6.7 Trillion is spent per annum to purchase diesel while filling stations spend N43.98 billion; factories N191.08 billion; banks N11.7 billion; insurance companies N80 billion; residential N7.812 trillion; and commercial enterprises, N1.57 trillion giving a total of 16,408,760 trillion or $140 billion expended on fuelling generators in the country annually."

The above does not include expenditures on labour, repairs and the impact on the environment and thus the health of the citizenry.

When the above are added, we see that the Generator Economy is the real Power Economy and that NEPA is its sub-sector. The report continues:

"Owing to paucity of data from the Customs and Excise department, the Federal Office of Statistics, PHCN, the Standards Organization of Nigeria (SON) and other government agencies visited, Financial Vanguard discovered that generating sets utilized by this category of consumer range from 0.8KVA to 500KVA, depending on how many consumers it is meant to serve.

It was projected that most of those who have recourse to use generating sets are mostly urban dwellers and a few others in the rural areas.

This amount to 300,000,000 litres of petrol per day and at current pump price of N70 per litre, N21 billion per day, N651 billion per month, N7,812 trillion or $66,769 billion per annum.

Investigations revealed that there may be about five million commercial enterprises operating in the country including barber shops, hair dressing, salons, restaurants, super markets, boutiques, block moulding factories, recording studios, dry cleaning services, night clubs, casinos, offices etc utilizing an average of eight litres of petrol per day on different capacity of generating sets.

This translates to 40 million litres of petrol per day or 1.24 billion litres of petrol per month or 14.88 billion litres per annum. At current pump price, this translates to N1.57trillion or $13.35 billion expenditures per annum. However this does not include the cost of oil change, spare parts and labour."

Although there is need to reconcile these different figures given as the annual expenditures on fuel - N16.408 trillion or N7.812 trillion or N1.57 trillion, Gabriel and Igbikiowubo do show us how to go about quantifying the costs of fuelling generating sets in the country.

When the costs of these generators and NEPA bills are added we begin to appreciate the cost of energy to those who cannot work without it.

More importantly we begin to appreciate the contribution of the import of generators to the economy of the exporting countries.

Why do we describe the Generator Economy both domestic and international as a disguise of Corruption? Because it is the effect of the decision to structure the supply of power in Nigeria in a manner that guarantees the sustainability of the Generator Economy.

This statement embraces even the supply of fuel through the refinery and from export. The Generator Economy will be less attritional if the supplies of diesel and petrol were produced locally. But this is not the case.

A massive proportion of the fuel that can be locally produced are imported, thus raising the import costs of fuel both to the local distributors and the end users.

Thus an international and national network of producers of fuel and generators has been brought into being by the decision of Government to so structure the supply of power in Nigeria as to result in the creation of the Generator and Fuel Importers Economy.

We will discover in this arrangement the organizations and enterprises whose wealth and income depend solely on the frictionless and continuous functioning of the Generator and Fuel Importers' Economy. The System of Decision Making that ensures the emergence and sustenance of the Generator and Fuel Importers' Economy is the Superstructure of Corruption.

The Substructure of Corruption is the system of power that determines who makes decision on matters both of private and public sector importance. The Vanguard Comment titled $10 billion Down Electricity Lane addresses the issue of how production of Electricity is organized, yet it would be one thing if Government did nothing and committed nothing to the production of Electricity.

It is another if Government embarks on the production of Electricity in the certainty that its plan will fail so that the Generator Economy could function as its solution to power failure.

A portion of the Vanguard Comment is quoted against the backdrop of this appreciation of the nature of corruption in Nigeria.

"President Umaru Yar'Adua stood beside former president Olusegun Obasanjo when he made a partial confession of his administration's failure to tackle poor electricity supply and quickly blamed it on sabotage.

As he expressed his shock over the $10 billion spent on electricity in the past eight years, President Yar'Adua might have forgotten the circumstances of Obasanjo's confession.

We would remind him of the incident during the campaigns last April in Abuja, when Obasanjo, trying to prise votes from Nigeria, for Yar'Adua's benefit said, "One of the things that has caused Nigerians some concern in recent time is the phenomenon of low supply of electricity.

I thought that the measure we have taken in recent times would have put things right. "I think there is sabotage. I am not saying I am sure. I will set up a team to investigate and the result would be made public.

Whoever is involved would not be spared."

It is improbable that Obasanjo set up his investigation, these words uttered in the heat of the campaign admitted that the Federal Government mismanaged the energy plan in case there was any.

President Yar'Adua could take the hint and investigate the waste of $10 billion as he told bewildered Nigerians, many of who never imagined that the waste was of such immense proportions.

This is still no acceptable explanation for the collapse of power supply in Nigeria. If in eight years new power plants could not be completed, and the existing ones were not properly maintained, the source of the sabotage that Obasanjo alluded to is easy to identify".

Even without the offer of an explanation for the ineffectiveness of Government's expenditures in the energy sector, the cost to the Nation of Government's failure in this sector is the sum of what it actually expended plus that which was expended by Nigerians in the Generator Economy.

When you add to this the effect of the high cost of the energy in the Generator Economy on the pricing of Nigerian goods and services in the local and international markets, that is, the making of Nigerian goods less competitive in the local and international markets, the systemic costs to Nigeria of Corruption in the Energy Sector can be better appreciated.

Similar appreciation can be made of the cost to Nigeria of Corruption in the Transportation Sector. Last year's Vanguard and other media houses provided the same expose on the enourmous sums allocated to no effect to the Ministry of Works under its ministers.

The condition of the Lagos-Benin Road was the Parable for Government's ineffectiveness in the Transportation Sector. Again similar appreciation can be made of the Cost to Nigeria of Corruption in the Security Sector where the Crises of the Niger Delta and of criminal insurgency in the Nation are threats to the solvency of the Nation.

When in the context of corruption that is so institutionalized attention is now turned therefore to governance issues that have rendered legitimacy of officeholders and the electoral process for their selection highly problemmatic.

We find that Corruption is indeed a metaphor for the way stakeholders in the Nigerian Project have decided to go about the optimization of the profit of their investments in the ownership and management of Nigeria.

No other explanation can account for the behavior of Government in the face of evidence of its deliberate rejection of the failure of its set policies in producing the results for which the policies were made in the self congratulations of One hundred days, 1000 days in Office Advertorials and the gratuitious insults to the thinking populace of Government award of National honour to its officials that have failed Nigeria so abysmally.

Revelations after revelations - A Senator publicly affirms that he knows some members of the august body who are criminals!

The Army is investigating the case of arms that were taken from its armoury for sale or for partisan support of insurgency. If there is going to be an address effective to the task in this matter of corruption, it will take more than a Presidential Declaration of a State of Emergency in the Power Sector.

For as we have briefly sketched in this expose, any who desires to speak relevantly and factually about Corruption must first find a place to stand; Archimedes' mathematical thought on the mechanics of moving the world as transmitted to first year students in secondary schools is "give me a place to stand, and I will move the world".

Stated less opaquely, his statement is give me a place in space to stand and I will be able to move the world.

Applied to the issue of corruption, the challenge to a President who wants to be heroic and perhaps quixotic in the process is finding an institutional place to stand, a place not part of the problem in order to effectively change the order of power.

The corruption of office holders is to be likened to the acts of scavengers after a ruinous war of government against its society.

The ruinous war, the way stakeholders have arranged to appropriate Nigeria for private gain is corruption in the Nigerian Vernacular.

The conduct of politicians in contesting for office, and their behavour in office is contextualized by this ruinous war.

We have only been given a description of the tip of the iceberg in this report on the Generator Economy. What is beneath the surface, the 8/9th of the Iceberg, is yet to be adequately investigated.

President Obasanjo appointed a go-getter no nonsense intellectual and public service muscle-man to tame the power problem. He put into words the reality of a Ministry that was organized to be dysfunctional.

For lack of a better word Bola Ige and Obasanjo have labeled the problem of an agency organized at great expense to be ineffective in the attainment of its mission while yet affirming its commitment to this mission as sabotage.

In Hollywood and in the world of the master spies this problem will be identified as the problem of Fifth Column Capture of Government by its enemy.

President Yar'Adua and all of this Government came and will come out out of the Governance Sector of the Corruption Problematique. The Election Tribunals are busy trying to undo the effects of Impunity Gone Crazy.

The legitimation of his regime will be determined by what he does and does not do about the salient sectors of the Corruption Problem, namely, Power, Transportation, Security and Governance.

And the first step in this task is recognition of the fact that he has inherited anti-corruption Agencies from his predecessor informed by the paradigm of crime.

Corruption is not a crime; it is a name for a system of power and government which is superstructurally based on a rule of law ethos but substructurally based on the system of predation, the rule of the mighty over the weak.

A different paradigm is needed, the paradigm of restructure, the paradigm of re-engineering. This is the primary issue.

Consolidation of the Anti-Corruption Agencies will not do, for all are informed by the same paradigm.

Without a paradigm shift, the Yar'Adua Administration will be embarking on the reform journey in a sea raging with the ferocity of monsoon winds in a wicker basket with only spotty seals of bitumen.

He will find himself facing winds that can capsize his slender resources of support from the system whose essence is corruption.

This issue must be addressed - the change of the concept of corruption as crime and immorality to the concept of corruption as a system of power and government operated for the benefit of the few to the detriment of the rest of Nigeria.

Without this preliminary acknowledgment of what is the problem, we will have prescriptions without antecedent theoretical analyses of problems.

With analysis inadequate, prescriptious will be irrelevant and plans based on such prescriptions are abound to compound the problem by adding the burden of self seeking careerists on the back of a people already bent double by the oppressiveness of problems.

Activism pursued with such a mind set will make as much sense as a man paying the robber for sparing his life out of what the robber has not forcibly seized.


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