The power sector and the current government

By Ikeogu Oke   |   12 June 2017   |   3:44 am

Babatunde Raji Fashola. PHOTO: Bellanaija

At its inception on May 29, 2015, the government of the All Progressives Congress (APC), otherwise the government of President Muhammadu Buhari listed three major areas in which it hoped to make immediate and lasting impact. These are power, security and the economy. Anyone conversant with the state of the nation at the time would appreciate the reason for the choice.

Power had remained a pounding Nigerian headache for decades, its inadequacy ensuring chronic economic underperformance nationwide, not to mention the distress it caused most of the citizens. You couldn’t fix Nigeria without fixing power.

As for security, the Boko Haram menace concentrated in the northeast but occasionally spilling into Abuja, the federal capital, and as further south as Kogi, had created a climate of fear. This also impaired economic activities by the citizens and, like the problems of power, undermined the faith of foreign investors in the country. Who would be eager to do business in a country characterised by violence and insecurity?

And of course the economy was in dire straits due to the decline in the price of oil, the country’s main source of revenue.

In all, Nigeria was faced with a Gorgon of systemic dysfunction with multiple snakes for hair, and the biggest of the snakes were power, security and the economy. And something like mythical power would have been needed to scotch the snakes, let alone slay the monster, in the first two years of any government.

Having been involved in the power sector for 32 years, since 1985, I appreciate the complications inherent in trying to tackle its many man-made and systemic problems from which various unpatriotic and other perverse interests profit at the country’s expense.

So I understand the feeling of disappointment when our new governments and their Ministers of Power rush to confront the problems in the sector with gusto borne out of a genuine commitment to change only to realise that their effort is like trying to bring down an elephant with a catapult.

As for the APC government, needless to say that, two years at the helm, it is still battling the power behemoth, trying now to slay it not with an obviously ineffective catapult but with an arsenal of projects and programmes whose proper implementation may truly exterminate the monster and consequently lead to a sustainable improvement in the country’s power situation.

For instance, in implementing the Power Sector Reform, liquidity issues led to inconsistency in paying for gas supply to generating companies. This has created hiccups in power generation, undermining power availability for economic production and other purposes nationwide.

But, faced with the scarcity of hard currencies due to the decline in oil prices, the government’s launch of the N701 billion Payment Assurance Programme is arguably a good, creative intervention intended to resolve such liquidity issues by ensuring payment in Naira to gas and generating companies, while it undertakes the reform and strengthening of the distribution companies.

Power production is capital intensive and its engine in oiled with funds. And such funds, if properly managed – and vigilance is called for to ensure that they are – should improve the power situation in the country.

And there is the additional Power Sector Recovery Programme (PAP) initiated by the government, launched in March 2017, which has received the endorsement of the World Bank.

In a joint press statement issued by the Nigerian government and the World Bank Group in Washington, D.C., on April 22, 2017, the Director of Operations at the Multilateral Investment Guarantee Agency, Sarvesh Suri, pledged that “a full range of instruments will be deployed to help the government mobilise investments directly from the private sector and through private sector guarantees.” Also, the World Bank’s Senior Director for Energy and Extractive Industries, Riccardo Puliti, noted that “controlling the cost of electricity supply is a critical element of the Recovery Programme that will require close attention to prioritising investments based on least cost power development investment planning principles.”

Then, the Global Director for Infrastructure and Natural Resources at the International Finance Corporation, Bernard Sheahan, noted that “a turnaround of the power sector will require the expertise and financing of the private sector.” Also, that “this would require continuous improvement in the investment climate in Nigeria and strong communications among stakeholders of the sector reform plan during its implementation.”

On the other hand, the Minister of Power, Works and Housing, Babantunde Fashola, in one of the  remarks by top-ranking Nigerian government officials including the Minister of Finance, Mrs. Kemi Adeosun, and the Chairman, Senate Committee on Power, Steel and Metallurgy, Enyinnaya Abaribe, stated that “the approval of the Power Sector Recovery Programme by the Federal Executive Council demonstrates that the Federal Government is committed to the sustainable development of the power sector.” Also, that “the implementation of the programme is critical to achieving the objectives of the Government’s Economic Growth and Recovery Plan.”

Then the World Bank Country Director for Nigeria, Rachid Benmessaoud, summed up the proceedings with a pledge that “the World Bank Group is committed to supporting the implementation of the Government’s Power Sector Recovery Programme to re-establish financial sustainability in the power sector.”

Now, the advantage of this type of high-powered bilateral engagement to resolve the lingering issues in our power sector is that, through the physical participation of the key players and their avowals, it clears the suspicion of the sham involvement of such international agencies as the World Bank, like foreign investors, that may have plagued previous efforts by our governments to resolve the same or similar issues, with the implied doubt of their credibility.

In other areas, such bilateral commitments are being complemented with projects by the Ministry of Power to boost the capacity of the power sector to deliver value to the Nigerian people. And the projects have varied gestation periods.

These include the 40 per cent completion of the 700-megawatt Zungeru Hydro Power Plant and the 99 per cent completion of the 40-megawatt Kashimbila Dam.

Also, 45 per cent of the work on transmission infrastructure for evacuating power from the dam to the Yandev 132KV substation had been completed by March 2017.

The ministry is also on course to rounding off work on the Katsina Wind Farm with an installed capacity of 10.175 megawatts, which is 95 per cent completed. And work is ongoing on the 3,050-megawatt Mambilla Hydro Power Plant.

I regard the various facets of such developmental efforts as critical to preparing the power sector for delivering what may be described as “a real feel of megawatts” in the Nigerian system, given their efficient management. And it behoves the government and other stakeholders to monitor the process to ensure that they produce the projected results.

Oke, a former technical adviser to the ex-Minister of Power, Prof. Bart Nnaji, lives in Abuja.




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