Nigeria: Tasks Before Presidential Power Initiative Committee

18 September 2020

At the end of the day, we must have an honest conversation as Nigerians and know that unless we fix electricity, we cannot make progress -- Nasir el-Rufai

There is no gainsaying the fact that quality, affordable and stable power supply is a vital catalyst to technological and industrial development of nations. Suffice it to say that nations referred to as developed attain such enviable status with citizens' unfettered access to stable and affordable power supply.

Power outages seem non-existent except in isolated cases as grown adults never witnessed any. This offers existing industries and start-ups a lifeline for continuous growth and an opportunity to contribute to national gross development product, GDP.

Over the years, Nigeria as a nation has frantically tried to meet the numerous challenges posed by lack of stable power supply to her citizens. To this effect, huge financial, human and material resources running into trillions of Naira have been invested to ensure that power supply to homes and businesses are achieved. But these efforts by government have not yielded the desired results.

According to Governor Nasir el-Rufai of Kaduna State who is the chairman, ad-hoc committee of the National Economic Council, NEC, on review of the ownership of the Electricity Distribution Companies, DisCos: "The Federal Government has in the past three years spent N1.7 trillion on Nigeria's electricity sector. The entire sector is broken.

The problems in electricity or power sector are many; capacity is one, perhaps. The tariff is an issue. The way the privatisation was done is an issue to many. What we have agreed on is that there are fundamental problems in the electric supply industry. You cannot privatise an industry and then over three years, you pump in N1.7 trillion government fund into it.

That is not privatisation and such expenditure was unsustainable. So, solutions must be found. Those solutions are not going to be nice. They may be painful, but the only way to solve the structural problems in the industry is to take some very difficult decisions."

Apart from the above, corruption has been fingered as one factor responsible for this abysmal failure. At a time in the history of the nation, the sum of $16 billion was said to have been invested in the power sector without anything to show for it.

Other factors responsible for the bane in the power sector include lack of funds and general incompetency of operators in the generation and distribution subs, technical issues, vandalism, energy loss/theft and the low quantum of available mega-watts of energy to power the entire nation.

Recently, President Muhammadu Buhari, in a bid to improve the power sector, constituted the Special Purpose Vehicle, SPV, for Presidential Power Initiate Committee. The inauguration of the committee was timely as it came on the heels of an upward review in customer tariff regime by the Nigerian Electricity Regulatory Commission, NERC, and an agreement signed by the President with Siemens AG to upgrade the nation's dilapidated power infrastructure in May.

Presidency said that "the partnership with Siemens will modernise the existing network before enlarging it until the country can produce and distribute 25,000 megawatts. The project will be financed by concessionary loans covered by Euler Hermes Group SAS, a large provider of credit insurance".

Government will "on-lend" the funding to the shareholders of Nigeria's power distribution companies and Siemens will have sole responsibility for selecting its contractors, it said. Members of the committee include Saleh Mamman, Minister of Power; Abubakar Malami, Minister of Justice; Babatunde Fashola, former Minister of Power, now Minister of Works and Housing and Zainab Ahmed, the Minister of Finance.

Others are Director-General, Bureau of Public Enterprise, Alex A. Okoh and the President, Nigerian Society of Engineers, Babagana Mohammed. Buhari, who described the power sector as one of the most critical components of sustainable development, expressed commitment to improving electricity generation and distribution. He said following the Federal Executive Council's approval, the coast is now clear for the SPV team to execute the initiative.

One major term of reference to the committee is to "ensure the implementation of Public Private Initiative, PPI, and serve as the key manager to ensure cohesion and seamless execution".

The challenges in the power industry is huge. Therefore, the tasks before the committee, like others before it, are very enormous. First, an urgent review of the entire privatisation exercise in itself should be a considered priority of the committee.

Second, it should set for itself and the nation an ambitious power generation target and also put robust machinery in motion towards achieving it. Third, ensure full adherence to the implementation of customers access to meter by DisCOs.

Fourth, the committee should look at the industry desired cost reflective tariff but should not shy away from ensuring that customers enjoy excellent services from providers. Fifth, the concessionary loan and PPPI agreement(s) of all projects should be implemented and executed in such a manner reflective of the wishes, aspirations of and to the benefits of Nigerians.

Sixth, as a matter of urgency the committee should seek meaningful collaboration with all the stakeholders with a view to identifying existing and current obstacles to progress.

Seventh, town hall meetings with customers, GenCOs and the 11 DisCOs to fully appreciate first hand the burning issues is recommended. Eight, the committee should seek to draw from the wealth of experience of Governor el-Rufai in his capacity as the chairman of the committee on review of the ownership of the Electricity Distribution Companies(DisCos), and as a former Director-General Bureau of Public Enterprise, BPE.

Ninth, seek inputs from former ministers of power from 1999 to date, Managing Directors of NEPA/PHCN and labour unions as major components of moving forward. With issues raised above, the tasks are well cut out for the team to achieve the desired results.

From the pedigrees of this team of six and the public offices they occupy, there is no doubt that the committee is capable of delivering on its mandates to the benefit of the power sector and Nigerians.

Eze is a media and communication specialist

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