27 November 2018

Liberia: Deciphering the National LEC Emergency

The attention of this newspaper is drawn to a November 23, 2018 Press Release from the National Security Council which was carried in various media outlets recently. The Press Release says the Government of Liberia has declared the supply of electricity to its citizens and the general public as a national emergency which must be treated with the utmost urgency.

Underpinning the declaration of this national emergency is the intention of the Government of Liberia, as stressed in the Press Release, to single-source all electricity procurement process a matter which, in the opinion of this newspaper, is more likely than not to compromise transparency and integrity, both being cardinal requirements to any credible procurement process.

This latest development is again symptomatic of the usual knee-jerk approach to the conduct of public policy which is becoming a hallmark of this administration's style of governance. While this newspaper agrees that the issue of public electricity supply has become contentious to the point where local communities have resorted to the staging of demonstrations and strike actions to compel action by LEC to address their concerns, it does not however agree that the solution to the problem lies in single sourcing to avoid PPCC bureaucratic red-tape.

Liberia, according to statistics, suffers a huge electricity supply deficit. At approximately 12%, Liberia has one of the lowest electricity access rates in the world. In the capital city of Monrovia, less than 20% of the population has access to electricity. Further, with electricity being sold to the public at a rate of 39 US cents per kilowatt hour (kwh), a cost which far outstrips that of electricity costs in Sierra Leone, Ivory Coast and Guinea it leaves little to the imagination why power theft is so rampant.

Electricity is a very essential commodity and people will exhaust every means in their power to access the commodity even at the peril of their lives. In neighboring Guinea, for example, the cost of one kilowatt hour of electricity for residential is US$0.04, for commercial the tariff is US$0.24 and for industrial the tariff is US$0.19; while in Sierra Leone the cost per kilowatt hour of electricity is US$0.31.

In the Ivory Coast, the cost of 1kwh of electricity is US$0.13 for commercial users per kwh; US$0.09 per kwh for residential or domestic users; while Ghana's electricity tariff for commercial users is US$0.32 per kwh, while domestic users pay US$0.19.28 cents for the same consumption.

This newspaper has gone to such lengths in an attempt to understand or explain why electricity supply to the population although exigent, does not qualify as a national emergency ranking above that of corruption which is threatening to ruin this nation and run it to the ground. In view of this, there are pertinent concerns to which this newspaper feels obliged to draw the attention of the public.

Prime amongst these concerns is the current relationships between the Millennium Challenge Compact (MCC) Power Africa and the Liberia Electricity Corporation (LEC). The revitalization of the Mount Coffee Hydro plant was for example made possible by funding provided from the Millennium Challenge Account through the Millennium Challenge Compact.

A country is considered eligible for a compact (aid grant) if its score on 17 indicators exceeds the median score of its peer group. All 17 indicators are compiled by third parties with no connection to MCC; MCC grants are made without considering politics. According to sources, the focus of the MCC is to promote economic growth in the recipient countries. The program emphasizes good economic policies in recipient countries.

Aside from this the LEC has been managed by a foreign company selected under the auspices of the MCC and Power Africa, a new American initiative launched by former US President Barrack Obama during his Africa tour in 2013. The initiative aims at supporting economic growth and development by increasing access to reliable, affordable, and sustainable power in Africa.

The Power Africa's engagement in Liberia, according to sources, is rooted in an agreement between the Millennium Challenge Corporation (MCC) and the Government of Liberia, signed in November 2015. The $257 million power and roads sector compact includes funding for the rehabilitation of the Mt. Coffee Hydroelectric Plant, development of a training center for electricity technicians, support for the creation of an independent energy sector regulator, and support for the development of a nationwide road maintenance framework.

Moreover, LEC has a Board of Directors appointed by the President of Liberia. The relationships between the MCC, Power Africa and the LEC present a somehow complicated picture beyond the understanding of the ordinary Liberian. Power Africa has identified what it calls key issues facing the institution. These issues, amongst others, include:

Weak and underdeveloped enabling environment

Weak public utility that is not commercially viable, with high tariff and high commercial losses

Delayed expansion of transmission and distribution network to evacuate existing generation capacity

Nascent off-grid sector

There is nowhere amongst these issues where single sourcing is highlighted as a major problem affecting the viability of the corporation or its ability to effectively deliver services to the public. Further it remains unclear to what extent the Power Africa or the Millennium Challenge Account was involved in this latest declaration of emergency intended mainly to shake off the involvement of the PPCC which would normally require adherence to transparency requirements.

This newspaper has, in a recent editorial, warned of the dangers of sending negative signals to the international community. The case of the alleged missing billions, the alleged US$25m infusion, the latest scandal involving the NHA Managing Director caught on tape soliciting bribes from a Burkinabé businessman and now this declaration of emergency, whose singular purpose is to sole source, is sending negative signals and reinforcing the impression that the Government of Liberia under the leadership of George Weah is leading an assault on national integrity institutions.

This newspaper certainly hopes that this is not the case so, we ask why the emergency?

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