Wednesday 11 May 2016

#MustRead: Fashola and Nigeria’s power problem

Minister of Power, Works and Housing, Babatunde Fashola
by: Pace Olaparodi

It has become boring to bemoan the paltry electricity which Nigeria generates. It is also trite to state that, more than 55 years after independence, we still depend on imported generators for electricity. It grieves the heart that the power situation in the country has impaired development. It is sad to consider that electricity generation for Nigeria, with her about 180 million people and a GDP of about $537 billion, oscillates between a high of 4,800 megawatts in August 2015 and a low of zero megawatt in March 2016. It is still dismal as of the time of writing.

It is not a laughing matter when one considers that South Africa, with a population of about 53 million and a GDP of $350 billion, generates 44,000 megawatts. Spain has a GDP of $1.4tn and generates 102,000 megawatts of electricity for her 47 million people. It is not an exaggeration to say that trying to salvage the Nigerian economy without fixing the power sector is like attempting to make a silk purse out of a pig’s ear.

The foregoing is sufficient to convince any serious-minded government to declare a state of emergency, or something more drastic, in the power sector. With the economy lying prostrate and the attendant job cuts, there is every reason to be in a hurry. But, sadly, this was not the tone of the April 24, 2016 newspaper interview of the Minister of Power, Works and Housing, Babatunde Fashola.

In the lengthy interview, entitled, “Electricity: The price Nigerians must pay, by Fashola”, the minister talked about a myriad of power issues covering pricing, regulation, power purchase agreements, power generation alternatives, and other matters. The interview provided more explanations than specific promises or firm deadlines and offered more shield for the tardy power sector players than succour for the tired electricity consumers. I almost could not believe that it was the same minister who in October 2014 reportedly boasted that it was not rocket science to produce electricity.

Fashola needs to realise that Nigerians have largely lost faith in the government’s ability to positively impact their lives and the recently renewed expectations of change, following the 2015 presidential election, are waning by the day. If the approach to the power sector problems remains the same, the people would totally lose confidence in the government and the already traumatised economy may roll over the cliff.

We must urgently address the problem of electricity cuts through unconventional means. One of those means is to localise generation, transmission, and distribution. The idea is to dissolve the national grid system and let cities and towns stand alone. Luckily, there are ready, mobile power plants each of which can generate power of up to 35 megawatts in about 11 days after delivery. The plant would be powered by diesel or gas transported in trucks. A city like Ibadan or Benin may not need more than three of this type of plant. The city in question would then be removed and freed from the ineptitude of the national grid.

Cheeringly, Fashola referred to this suggestion in his interview and admitted that it was a plausible option. But he dismissed it on the basis of pricing. I was surprised! The minister trashed a suggestion that could pull Nigeria literally out of the dark because the cost of trucking gas to the local power plants would have to be added to the eventual price. Are consumers not already paying a high price directly through our diesel/petrol-guzzling generators, poor economy and indirectly through noise pollution, air pollution, and the opportunity cost of the generators’ space and loss of productivity? Has the minister carefully compared the total cost of using generators for electricity to the option of gas delivered in trucks to local power plants? Trucking of gas could also be an option to gas pipelines which are always being vandalised. Already, Nigerians have started switching from petrol and diesel to gas as the fuel for their household generators. This is quite instructive on the issue of pricing.

I am not aware that Nigerians do not want to pay the right price for electricity. They only want electricity that is available and stable. They want pre-paid meters. They detest estimated bills. In any case, why are we carrying a moribund and inefficient national grid which does not and cannot supply stable electricity to anybody? The national grid is sick and old. It collapsed four times in four weeks (March 31, April 9, April 23, and April 25, 2016). It is not right for the whole country to be affected because of a collapse somewhere along the national grid.

Why should Nigerians all over the country pay the same price for electricity regardless of the different costs of generating electricity? For instance, why can’t Ikeja GRA or Aba or Abuja be removed from the national grid and powered by trucked gas and consequently pay a higher price than say Lokoja or Minna which could be supplied by the hydro-powered plants from Kainji? This is the same unnatural logic behind the uniform petrol price for the whole country even when imported petrol ought to be cheaper in locations closer to the ports.

It is curious that the same Fashola, when he was the governor of Lagos State, provided electricity to some strategic installations without relying on the national grid. Why is he finding it difficult to replicate the same formula for the whole country? Are there constraints he would rather not share with us?

It is outright insensitive that the electricity distribution companies still have not provided pre-paid meters to about three million consumers. It is ungodly to continue to send crazy and estimated bills to consumers for electricity not consumed. It is nothing short of corruption. It is unholy for private businesses to deprive customers of pre-paid meters several years after payment. The pains of the people can also not be soothed by saying that it took so many years to provide the first three million meters. Or that it took Nigeria 60 years to generate 5,000 megawatts.

It is not defensible that the Nigerian Electricity Regulatory Commission would receive a proposal from GRA, Ikeja on power purchase and would not give a response. It shows that the country is not yet in an emergency mode on power issues. Is there no time limit for such proposals to be treated and consummated? In fact, all large residential and industrial estates should be encouraged to come up with such proposals immediately.

This is the template that can make funds flow from banks or investors to the power sector. It is not likely that investors would show interest if the current sick and tired national grid template continues to be sustained. Our economy needs electricity. We cannot wait anymore. Businesses are dying. People are dying. Patience is dying. We must do things in a different manner.

The other issue that must be urgently addressed is true federalism. Like an ostrich, so many people continue to deny this obvious fact and pretend that all is well. We still have the opportunity to address this diseased structure in a speedy manner. There is no way a faulty structure can produce an excellent outcome. It is as true for power generation as it is true for political systems. It is unrealistic to expect progress from a flawed and an unjust system. It is not natural.

Yesterday, the strongest reason for true federalism was perhaps political. Today, it is certainly economic. There may be no tomorrow without it.

- Pace K. Olaparodi is a policy analyst based in Lagos

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