Sometime in April, the national electricity grid collapsed for the umpteenth time in the history of the power sector in Nigeria. This particular case was the fifth time in 2022.
The Federal Government claimed that the collapse was due to the activities of some unknown persons who had made attempts to vandalise a transmission tower on the Odukpani – Ikot Ekpene 330kV double circuit transmission line.
According to a statement by the Ministry of Power, the action of the ‘vandals’ had cost the nation a loss of about 400Mega Watts. Needless to say, the collapse triggered massive power outages across the country, leading to an unexpected and costly disruption of economic activities.
As expected, there was a widespread outcry from the end users of electricity, which once again called to question the wisdom in allowing the private sector to continue the ownership of the country’s power infrastructure.
Faced with a seemingly intractable crisis, it is no surprise that both government and end users, who feel the pinch most, are forced to review the decision to hand over the power sector to private investors.
Now the question is should the Federal Government return the sector to the era when it was fully in charge of electricity generation and distribution?
This question is at the root of an ongoing search by the government, end users and other stakeholders in the power sector for solutions to the myriad of challenges facing the sector since 2013.
To answer it, we think it is necessary to reconsider the background to the formal unbundling of the sector years ago.
The Electric Power Sector Reform (EPSR) Act was signed into law in March 2005 to pave the way for formal privatisation of Nigeria’s power sector. The Act was meant to enable private companies to participate in electricity generation, transmission and distribution.
The power sector was finally privatised in November 2013, with six power generation plants and 11 electricity distribution companies handed over to the private sector, while the Federal Government retained control of the Transmission Company of Nigeria (TCN).
The government’s privatisation policy was seen at the time as a practical response to the poor performance of the public sector, which, to a large extent, had failed to efficiently handle the power sector.
Privatisation, the nation was told, would help the government to save money and improve performance and efficiency in terms of electricity transmission and distribution.
During its campaign in 2015, the governing All Progressives Congress pledged to increase the generation and distribution of electricity to 40, 000 Megawatts within eight years of coming to power. It also promised to ensure a 24-hour power supply by 2019.
Unfortunately, the party has been unable to fulfill its promises.
Even post-privatisation funding by the current Federal Government has not helped matters. According to reports, the APC-led government spent N1.532tn on the sector in the last six years, even though it was intended to subsidise electricity consumption and not serve as investment.
The current reality is that privatisation has failed to relieve the government of much of its fiscal burden and to satisfy the yearning of the average Nigerian for regular electricity at affordable costs.
On May 2020, reacting to public outcry over the inability of the power sector to provide regular electricity supply to Nigerians, the Senate President, Ahmed Lawan, formally declared that the privatisation of the sector had failed. He called for a review of the privatisation of the sector.
Before then, President Muhamadu Buhari and former Minister of Power, Babatunde Fashola and his successor, Saleh Mamman, had on different occasions expressed dissatisfaction with the performance of the electricity generation and distribution companies. They had also hinted at a review of the privatisation policy.
A Power Sector Reform Coordination Committee headed by Governor Nasir el- Rufai of Kaduna State also recommended the reversal of the privatisation exercise of 2013 as a panacea to unstable power supply.
Summing up the situation in the power sector, El-Rufai said, “The problems are many. The entire sector is broken. There is a fundamental structural problem. It is either we continue to allow the Federal Government to pump N1.7tn into the sector every three years or we take the tough decision that will ensure a stable power supply.”
Even the President of the Nigeria Labour Congress, Ayuba Wabba, joined the call for reversal of the power sector privatisation, arguing that electricity service delivery had grown from bad to worse, with failure on the part of DisCos to supply prepaid meters and “the exploitation of Nigerians through estimated billings and reluctance to attend to basic complaints.”
However, we do not think the solution lies in a full-scale reversal of the privatisation agreement with the GenCos and DisCos. A reversal, as contemplated by the government, may have far reaching consequences for the country, including giving a wrong impression to potential investors and possibly discouraging them from investing in the economy.
The Federal Government’s undue interference and the lack of technical and financial capacities have also contributed to leaving the sector in its present bleak state.
It is important to note that some stakeholders believe that the 2013 privatisation arrangement was unrealistic because it depended so much on the private sector and the government failed to consider a total reform.
We also believe that the lingering crisis is largely due to a high level of mismanagement. For the sector to move forward, Nigeria needs people, who have foresight and understand what it takes to address the problems in the sector.
We, therefore, call on the Federal Government, whose responsibility is to ensure the success of the privatisation policy, to engage the services of such people. All that is required is for government to nominate a few individuals to the Nigeria Electricity Regulatory Commission and let them make public presentations to the National Assembly on what they know about the problems of the power sector and how they hope to solve them.
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