16 March 2011

Nigeria: As Over 300 Investors Apply for PHCN Firms


With an estimated population of one hundred and fifty million, there is no gainsaying that electricity is a multi-billion-dollar industry in a developing economy like Nigeria. And in a country that is threatened by mind-boggling unemployment figures and the attendant social vices, there is no other auspicious time for government to provide the enabling environment for massive investment in the power sector than now.

The grim state of power supply in the country was laid bare last week when the Minister of Finance, Olusegun Aganga, gave the lie to the self-deprecating figures Nigerians had bandied about in recent years. He declared that the country had never achieved 4,000 or 4,500 Megawatts of electricity, arguing that the highest peak ever attained for several years was 3,800 Megawatts. Even that figure, he explained, was only achieved under the current administration.

This newspaper regrets that Nigeria remains an underdeveloped economy, in spite of the humongous financial resources she has earned from the sales of hydrocarbon deposits since independence in 1960. Equally disconcerting is the fact that our contemporaries in Asia, Latin America, and even Africa have left us behind. Whereas, for instance, a country like South Africa, with a population of about fifty million, generates, transmits and distributes about 40,000 Megawatts of electricity, Nigeria has, embarrassingly, continued to doodle over generation, transmission and distribution of a measly 3,800 Megawatts. Little wonder that businesses in Nigeria are shutting down their operations, permanently, and relocating to neighbouring countries. Even small business operators, especially those in the informal sector such as the battery chargers, barbers, hair-dressers, video club owners, business centre owners, fashion designers, auto-electricians, pepper grinders, welders, etc, have been shut out of business by epileptic power supply.

That electricity remains a prime mover in the economic development of any nation is an understatement. The current rudimentary economy now needs to leapfrog in order to catch up with the developed economies or achieve the nation's vision of becoming one of the twenty most developed economies by the year 2020.

Therefore, it is exulting that as many as over three hundred firms across the world have applied for acquisition of major stakes in the privatization of the successor companies created out of the Power Holding Company of Nigeria (PHCN).

We recall that the Bureau of Public Enterprises (BPE) between the 13th and 20th December, 2010 had published adverts in local and foreign media inviting prospective core investors to express interest in the distribution firms unbundled from the PHCN as well as the four thermal power stations and two hydro power stations in the country. While we acknowledge the positive steps taken by the current government, such as the inauguration of the Presidential Action

Committee on Power which, according to the President, 'meets weekly to tackle any obstacles that may be on the way,' the establishment of the Presidential Task Force on Power, headed by Prof. Bart Nnaji,

a world-renowned expert on electricity issues rather than the usual appointment based on political patronage, and the launch of the Road Map for Power Sector Reform in August, 2010, our gripe remains the seeming lack of political will to pull through the much-needed reforms in the sector with deliberate speed.

Notwithstanding the fact that electricity is an issue of security, our concern has also been on the need to provide a legal framework that will ensure full liberalization of the sector, the need for a constitutional amendment to ensure that independent companies can generate, transmit and distribute electricity from different energy sources such as wind, water, solar, household waste, etc.

Above all is the issue of transparency. Nigerians are yet to come to terms with the revelations that about sixteen billion dollars ($16 billion) was expended on power during the administration of former President Olusegun Obasanjo without any tangible results. This newspaper therefore demands unqualified transparency in the concessioning template of PHCN. PHCN must not share the fate of Daily Times, NITEL and other public institutions that were sold at rock bottom prices to cronies of the powers that be. Nigerians will also need to know the tariff regime that will be in force once the new companies come on stream. The new optimism of Nigerians for constant power supply at affordable price through the reforms in the power sector must not end as another mirage.

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