Nigeria: Former NERC Boss Opposes Plan to Reverse Power Sector Privatisation

10 June 2020

Amid threats and suggestions to revoke the licences of the current private investors in the country's power sector-the generation companies (Gencos) and distribution companies (Discos)-over alleged non-performance, a policy analyst and former Chairman of the Nigerian Electricity Regulation Commission (NERC), Dr. Sam Amadi, has advised against cancellation of the privatisation.

This is coming as electricity consumers in the country are criticising NERC for increasing the price of prepaid meters without considering their plight in a harsh economic period and without consulting them as important stakeholders in the Nigerian Electricity Supply Industry (NESI).

Speaking yesterday on Morning Show programme on Arise News, a sister broadcast station of THISDAY, Amadi said disbanding the current private operators and terminating the privatisation process were not the best way to go, as according to him, it would lead to repeating the mistake that was made in the past.

The Minister of Power, Mr. Saleh Mamman, had in April 2020, given Discos till July (three-month period) to be willing to supply meters, improve power supply and agree on the reasonable tariff for consumers or lose their licences.

Amadi suggested that rather than using hire-and-fire approach in dealing with the power sector reform, a continuous and gradual approach that is based on regulation should be adopted, adding that NERC should also be empowered to play a key role in the issue.

He said: "My idea is that we shouldn't ever try to remove these guys who are holding it. We should use regulation. NERC should be the one that should be empowered to look at market-based industry peer review processes to benchmark and take up people who can perform.

"You see, reform is iterative and gradual. You build and then you review. You remove one block, you build again. It is not a discontinuous action (you just discontinue, and then you create something new). It's iterative. You make mistakes, you learn from the mistake, and you use pedantic tools to redefine.

"Firstly, the notion is to get efficiency. You look at your structure and you are not getting it. What needs to be altered? So you alter what needs to be altered, you keep moving. It's not something you do a one-day deliberation for."

Amadi, however, suggested that the National Assembly should set up a parliamentary commission made up of independent experts to holistically look at the problems of the sector right from the first electric power policy in 2000 till date.

He explained that the report of such parliamentary commission would guide on the next line of action to take towards solving the sector's crisis.

Meanwhile, electricity consumers have kicked against NERC's decision to increase the prices of prepaid meters, accusing the regulator of being inconsiderate to their plight in the trying pandemic period and without carrying them along as stakeholders according to NESI rules.

NERC had last Monday announced an increase in the prices of prepaid electricity meters, raising the amount for a single-phase meter from N36, 991 to N44,896; and three-phase meters from former N67, 055 to N82,855, citing "changes in foreign exchange approved by the Central Bank of Nigeria (CBN) and the applicable rate available to importers of meter component or fully assembled meters through investors and exporters' forex window."

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