On electricity, block the lies, leakages
WE can’t stop lamenting the parlous state of electricity generation, distribution and transmission in Africa’s most influential country. On Sunday, April 21, rainstorm did havoc to power installations around the industrial zone of Ota, Ogun State. Electricity poles fell and mangled cable littered the expressway from Sango, onward Ota, Canaanland.
This highway leads to the heartland of Ogun West and the border town of Idi Iroko. Here, you have a number of manufacturing operations, schools, hospitals, cold rooms and a host of SMES, plying their trade.
Two weeks have passed since the storm but electricity supply has not been restored, apart from tepid efforts to clear the debris off the road. The implication is that citizens and businesses along that axis, irrespective of the consumer Band in which they are yoked have not had electricity since then.
There is no communication with consumers on when the blackout is going to end. The losses are simply incalculable and individuals are left to bemoan their plight, in the absence of an intervening authority. That’s the lot of a disaggregated population in a poorly governed political space.
This jurisdiction is serviced by the Ibadan Electricity Distribution Company ( IBEDC), one of the five Distribution Companies ( Discos), slated for sale for underperformance and debt burden. The real point is that, in its chequered existence, even after it was taken over by the Debt Management Company ( AMCON), IBEDC never lived up to its responsibilities.
IBEDC, like other failed Discos, shied from investing in repairs of damaged installations from which they collected tariffs. The business of installation and repairs of electricity facilities was left to Community Development Associations. The other Discos that were taken over by banks and AMCON are; Abuja Electricity Distribution Company ( AEDC), Benin Electricity Distribution Company ( BEDC), Kaduna Electricity Distribution Company ( KEDC) and Kano Electricity Distribution Company ( KEDC). Those that are not taken over yet are just struggling. They are not really fantastic.
According to the Minister of Power, Adebayo Adelabu, these five underperforming Discos, despite their insolvency ought to be managed by technical experts. They are not, because the loans their owners took have enslaved them to their creditors. Very unfortunate that this is where the power privatisation exercise that began in 2013 has landed Nigeria.
In their present state, the banks are more about how to recover their loans. They do not have the technical interest or the passion to run electricity companies. We cannot begrudge them. But those who took the loans originally must be brought to book, for deceiving Nigerians and running down thriving legacy utilities.
In Nigeria’s financial crime scene, connected persons obtain huge loans, which they purport to invest, either in aviation, fuel importation, publishing, oil and gas, electricity etc. Sometimes the investments don’t survive and the loans are never recovered. When they’re charged to court, they make several pleas and are allowed to roam. AMCON is dragged in while the debtors join politics. Some of them are in the National Assembly, making laws for law- abiding citizens.
Sometimes there is complicity, and banks
become timid and count losses. But at the end of the day, the financial system suffers from bad loans whereby everyone gets hurt, one way or the other. As at the first half of 2023, non- performing loans in the country had reached N1.67 trillion, involving 11 banks.
We may agree that some unperforming loans could be due to hike in interest rates and bad business environment, such as the COVID- 19 epidemic. But there has to be an investigation of portfolio investors who procured stakes in the power sector and left it in crisis. That should be done to expose and punish bad business behaviour, so that the next set of buyers will be better prepared, technically and financially.
Before they are sold, the Nigeria Electricity Regulatory Commission ( NERC) should also be investigated for poor supervision of the failed Discos. NERC gets a certain percentage from tariffs fleeced from unmetered customers on behalf of government. NERC watched lamely as the Discos diminished assets bequeathed from Power Holding Company of Nigeria ( PHCN). The entire regulatory Act for the power sector must be revisited to whittle down government influence and meddlesomeness.
The model that has sustained telecommunications should be copied for the electricity sector. In the case of telecoms, the terrain was virgin for the investors apart from those who inherited NITEL. Despite the multiplicity of taxes and the huge investment in diesel, the telecoms sector is thriving.
Conversely, Discos that inherited lush power assets and trillions of intervention funds are struggling to generate and distribute around 4,000 megawatts to the entire country. As at 2023, the Central Bank of Nigeria ( CBN) had put N2.3 trillion in attempts to boost capacity of supply and metering. So far, according to NERC, only 5,885,687 customers use pre- paid meters out of 13,231,807 registeredelectricity users.
As at January 2024, all the 12 distribution companies collectively metered only 42, 961 customers. IBEDC was reported to lead in metering. BEDC is reported to be the most notorious in flouting the rules. Majority of households in Edo North, Ondo, Delta and Ekiti, which are under BEDC are not metered.
BEDC is not interested in due process, instead, it embarked on the misnomer it calls bulk- metering of communities, billing each transformer millions of naira for power it does not supply. In the new dispensation, it’s not just enough to take over from those who ran the assets aground. They must give account.
The numbers are simply embarrassing for Africa’s leading economy, and if the country is to be taken seriously in places where president Tinubu is clamouring for investors, then the style of regulation must change. And that seriousness lies within the authority of the National Assembly to invoke.
Last week, minister Adelabu was at the National Assembly, where he threatened thatin three months, the country will be thrown into darkness if the latest hike in electricity tariff is not sustained. The Senate Committee on Power had told him to discontinue the tariff branding that allocates 20 hours of electricity to customers in Band A for N225 per kilowatt ( KW). The new tariff came into operation on April 3.
It was when Adelabu sensed the seriousness on the part of the lawmakers that he threatened: “The entire sector will be grounded if we don’t increase the tariff. With what we have now, in the next three months, the entire country will be in darkness if we don’t increase tariff.”
Lawmakers in the Lower House repeated the same message by the Senate Committee to the minister, to stay off tariff increase now that
Nigerians are gasping for oxygen, affronted by the highest inflation in decades and pummeled by fuel scarcity and price increase, the type never seen before. Citizens are buying one litre of PMS for as high as N900, N1,000 and more, an affliction that has compound Adelabu’s woes.
How the new tariff will be reversed and whether the lawmakers could summon the balls to enforce their order is a different matter. At least, they have earned temporary accolade in the public square. When they enter into closed- door sessions they could change their minds.
A far weightier implication for the country was that at the same time Adelabu was threatening total blackout for Nigeria in three months, President Tinubu was labouring to explain his government’s excruciating economic policies at the World Economic Forum ( WEF) in Riyadh, Saudi Arabia. The president was literally begging investors to come to Nigeria, where the Power Minister threatened could experience a total blackout in the next three months. The dissonance at the two ends should worry this government.
Adelabu is just trying his best in a very difficult terrain. All the ministers who supervised that ministry since 1999 had to cleverly step aside, not because they were underperformers, but the demons in that ministry were too powerful. Government is the enabler of demons and same government can break them. President Tinubu should get as bold with the power situation as he claimed he was with fuel subsidy.
Minister Adelabu again said the Federal Government needs $ 10 billion annually to fix electricity over the next ten years. Before the privatisation exercise, the Federal Government invested a certain $ 16 billion to prime the sector. Eleven years after, government is still looking for more money to assist a sector that is now privately owned. That’s apart from the subsidies government claims to pay every year, running into trillions.
Meanwhile, a certain electricity generation company ( name withheld) posted in January 2024, N83 billion revenue, and an operating profit increase of 110 per cent. The power firm made N31.1 billion profit in 2023, against the N14.8 billion it recorded the previous year. If that is the prevailing average in the sector, it means business is good.
This company is not even doing up to 30 per cent capacity. Let investors look for money to expand capacity while government bothers with the enabling environment. Government should stop throwing money away.
fin“In Nigeria’s ancial crime scene, connected persons obtain huge loans, which they purport to invest, either in aviation, fuel importation, publishing, oil and gas, electricity etc. Sometimes the investments don’t survive and the loans are never recovered. When they’re charged to court, they make several pleas and are allowed to roam. AMCON is dragged in while the debtors join politics. Some of them are in the National Assembly, making “laws for law- abiding citizens.
Few words for Daniel Anjorin
Last week, this British- Nigerian lad of 14, Daniel Anjorin, was killed on his way to school, by a sword- wielding Marcus Monzo, somewhere in Northeast London. Anjorin was harmless and defenceless, but Looney Monzo appeared wellrehearsed, as he brandished the sword to bring down more victims. Two Police officers were seriously injured according to reports.
From the brief video recording of the moment the killer was cautiously overpowered, there was the impression of a city that is tentative on a pattern of repeated knife crimes. The sophistication of society coerces law and order to become tender. Everyone else is careful except the criminal. That’s absurd.
Adieu little soul, rest in the Lord!