Nigeria: Senate Seeks Reversal of Power Privatisation

20 May 2020

Abuja — The Senate yesterday asked the federal government to suspend forthwith the proposed increase in electricity tariff scheduled to take off on July 1, 2020, bearing in mind the increased hardship associated with the COVID-19 pandemic.

It also clamoured for the immediate reversal of the power sector privatisation exercise carried out by the President Goodluck Jonathan administration due to what it called "failure to deliver."

Adopting a motion entitled: 'Power sector recovery plan and the impact of COVID-19 pandemic', sponsored by the Chairman of the Senate Committee on Power, Gabriel Suswam, and 24 other senators, the upper legislative chamber also urged the federal government to consider additional tariff support to cushion the effect of the shock over a fixed period to allow time required for TCN and Discos to access funds and implement performance improvement investments that would support increased tariffs to certain classes of customers especially during the pandemic.

The Senate declared that if the privatisation exercise in the power sector is not reversed, Nigeria might stop having electricity in the next ten years.

The Senate also mandated its Committee on Power to investigate all federal government interventions in the power sector since the privatisation of the sector to date with a view to ascertaining the adequacy of such interventions and their desired impact, and report back within four weeks

It also charged its Committee on Power to investigate all market participants in the power value chain and ascertaining the level of corporate governance compliance in the Nigerian Electricity Industry (NESI), and report back within four weeks.

The Senate also urged the Central Bank of Nigeria (CBN) to allow operators in the power sector access to foreign exchange for procurement of equipment and materials like what is done in the aviation and oil industry.

It, however, commended the federal government "for the proactive initiative to establish the N1.7trillion COVID-19 Crisis Intervention Fund to cater for issues that are critical to effectively manage the pandemic as well as stimulate gradual return to normal socio-economic activities in the country."

The upper chamber also urged the federal government through the Federal Ministry of Finance to include the power sector in the disbursement of the proposed N500billion COVlD-19 Crisis Intervention Fund in order to ameliorate the financial hazards and operational challenges such as the enumeration of metering of actual consumers and recent problem arising from the virus.

Commenting on the issue, President of the Senate, Dr. Ahmad Lawan, said: "We gave power to them (power generation and distribution companies) and they still come to the public to ask for funds. I think it's time for Nigeria to consider reversing the privatisation of the power sector or they should just cancel the entire privatisation process completely. If we leave it, we may not have power for another ten years."

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