Leadership (Abuja)

Nigeria: Electricity Roadmap - Mines Ahead

analysis

The timing of the one-day strike by workers of Power Holding Company of Nigeria (PHCN) was by no means a coincidence. It was designed to rattle President Goodluck Jonathan as he moved to roll out his power roadmap. And it did.

The president eventually rolled out his power reform roadmap signalling the readiness to implement the seemingly comatose Electricity Power Sector Reform (EPSR) Act. However, his officials had to embark on stampeded negotiations to ward off an illegal strike by electricity workers unions.Under the new dispensation, the federal government would hands off generation and distribution of electricity. The two major functions in the electricity supply chain would be sold to private firms.Even transmission that still remains in government hands might have to be contracted out to some private firms to manage. With the launching of the new roadmap, the president once again shifted the goal post for the attainment of regular power supply.The new deadline is the end of 2012 when power generation is expected to hit 7,000 megawatts. Even then, the new deadline sounds rather provisional and elusive, judging the president's pronouncement. The president, in hisdeclaration of the new roadmap, said, "I believe that Nigeria would celebrate much more than one day of uninterrupted power supply by 2012." This statement, by my assessment, is not an assurance that there would be regular power supply by 2012.

Given the fact that the same administration which Jonathan now inherits missed the self-acclaimed December 31, 2009 target for attaining the elusive 6,000mw of power generation, and that the target is still elusive several monthsafter the 2009 deadline, many Nigerians are sceptical about the new target of 2012.The truth is that Jonathan's roadmap is going to skate through a dangerous minefield laid by an odd combination of political opponents and electricity workers' unions. The roadmap may be a good vote-catching device in an election year but politicians would almost certainly use it against the president.The unions in PHCN would be cheap tools in the hands of politicians in the campaign against the attainment of regular power supply by the year 2012.

Like the staff of NNPC, the unions have never hidden their resentment against the privatisationof the most inefficient power monopoly in black Africa.The programme portends danger for their jobs and no one expects them to clap for the president as he moves to deploy hundreds of them to the boisterous labour market. The truth, however, is that Nigeria needs the private sector in its electricity supply chainto end decades of darkness in the land. It is also true that hundreds of jobs would be lost in PHCN under deregulation. However, that would almost certainly translate into millions of jobs in the entireeconomy if the programme is executed transparently. It is therefore a necessary sacrifice.

The government on its part unwittingly walked into the trap set by the unions by stupidly reneging on the earlier plan to pay the PHCN workers their monetization arrears. The workers had patiently waited for their hard-earned money for seven years. Last week's strike was therefore a dress rehearsal of a grander showdown on how to tackle the government in its determination to privatise some segments of the electricity supply chain. The unions boasted that they succeeded in crippling the economy in just one day of the strike and that they were bent on stopping those they think want to sell PHCN to the 'cruel private sector'. The union's assessment of the effect of the strike, international flights would have been diverted Nigeria's airspace, while most of the communication networks in the country would have shut down if the strike had lasted till Friday.

It is obvious that the unions have a stranglehold on the economy,and if a union with such powerful weapon has the unbridled right to go on strike,The president could well forget his electricity roadmap.One thing is clear: no employer has the right to withhold workers' entitlement. The situation is even more intolerable in a country where less than 500 members of the National Assembly on part-time work draw N100 billion in a year as pay.

All the emolument of the 50, 000 staff of PHCN is less than half of what the 500 lawmakers collect in a year. Yet the staff of PHCN cannot get their pittance on time until they embark on an illegal strike. Some radio stations had earlier claimed that heads would roll in the Federal Ministry of Finance, as some officials of the ministry were to blame for thedelay in paying monetisation arrears which the government had released to PHCN staff. Surprisingly, the government delegation just negotiated a settlement with the unions and ended the strike. No one is talking about why the money was notpaid in time. Union officials said the government delegation practically'slept' in their office just to beg for an immediate end to the strike.

What could be derived the perceived panic in the federal delegation is thatthe delay in the payment was avoidable and that someone might have lodged the money somewhere for personal reasons.Ironically, the economy paid an enormousprice for that misdemeanour, while the perpetrators walked away with impunity. The danger in the success of last week's strike by the electricity workers is that it could open the floodgate for more crippling strikes, especially as the unions are bent on truncating the planned privatisation of power generation and distribution. We all know that PHCN, as presently constituted, cannot end the eternal darkness it plunged the country into.

It is equally true that consumers have to pay morefor electricity if it has to be regular. These are two very unpopular decisionsthat the government has to make. The staff of PHCN would resist the privatization for selfish reasons. Unfortunately, the pedigree of privatisation in Nigeria tends to support some of the unions' fears. One of the unions' officials told his Radio Continental interviewer last Thursday night that PHCN would go the way of Daily Times of Nigeria Plc (DTN) if it is privatised. That is a challenge to the Bureau of Public Enterprises (BPE). The agency sold the nation's media heritage to a man a British judge openly indicted for scamming, and eventually watched him strip its assets. It also sold NITEL to Transcorp and watched it strip the company and starve its workers. Retrenched staff of the liquidated Nigeria Airways had to wait for a decade to collect their severance package. The liquidator of the airline sold its assets at give-away prices to friends of top politicians. NITEL and DTN Plc present case studies on how not to privatise a public firm. Everyone is watching what would happen to the generation and distribution arms of PHCN when they are eventually privatised. If they are sold cheap and the buyers are allowed to do to them what Transcorp and Folio Communications did to NITEL and DTN Plc, the unions would have been vindicated.The history of deregulation in Nigeria is replete with privatised companies that were returned to government as empty shell. The distribution and generation arms of PHCN cannot join that rank. If anything goes wrong with the privatisation of the company, the economy would simply grind to a halt. On the other hand, while it is true that consumers have to pay more to ensure regular power supply, the government must protect consumers from the merciless grip ofthe private sector as it takes over the provision of such essential service as electricity.


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