Power reform: Gains and challenges

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images(4)NIGERIANS still wonder if their problems with having regular electricity will ever be solved. Electricity is undoubtedly an essential part of the good life and development in the modern age. Without electricity, to talk of “democracy dividends,” a popular phrase in Nigeria since its return to civilian rule in 1999, is like contemplating cooking without heat. In a word, it is unrealistic. This is because most manifestations of “democracy dividends” like a good living standard, quality public infrastructure and job creating depend somewhat on the availability of electricity. For instance, electricity powers industries, industries create and sustain jobs, jobs generate revenue for government through taxes, and government utilises taxes to provide social amenities or “democracy dividends” for the citizenry.

This relationship virtually makes electricity the essential “democracy dividend” which influences the availability of all other “democracy dividends.” As an individual or a nation, to lack electricity is to risk perpetual distress, underdevelopment and poverty. And I believe the fear of these negative results cannot be dissociated with Nigerians’ anxiety over their problems with the availability of electricity having extended into the post-power reform era.

Their dissatisfaction was highlighted recently in the front page story of The Guardian of February 26, 2015, captioned “Manufacturers threaten to shut down over high electricity tariff.” According to the story, “… the Steel Manufacturing Group of the Manufacturers Association of Nigeria (MAN)” has “warned that the new tariff order Multi Year Tariff Order (MYTO 2.1) which became effective January 1, was paralysing most companies in the country” and so “have…threatened to shut down their factories if the situation continued.”

Of course, a critical reading of the above excerpt reveals the abnormality of one group among the many associations that comprise the Manufacturers Association of Nigeria seeming to wrongly assume the right to speak for almost the entire association by claiming that the new tariff was “paralysing most companies in the country”. Suffice it to have pointed out this anomaly en passant, for there is no indication that the Steel Manufacturing Group’s opinion of the new tariff originated from a survey of the opinions of “most companies in the country” as it suggests. But this is not to suggest that the group does not have a genuine grouse, especially in respect of its claim about the suddenness of the new tariff and its potential negative impact on its projections of expenditure and profit.

In all, developmental issues are evolving with the power reform, which deserve the attention of the relevant agencies in the sector.

Tariff (with the associated discontent) is only one of the issues. There are also issues about inadequate generation where many expect the quantum of generated power to have improved in manifolds due to the reform. There is the issue of vandals who damage power equipment and gas pipelines, causing forced outages and frustrating the effort to maintain, let alone improve, the current level of power availability. There are issues about sustaining the synergy across the generation-transmission-distribution value chain in order to ensure that the right amount of generated power is successfully evacuated to the grid and transmitted to the distribution networks for onward delivery to electricity customers.

It is apparent that not much effort is being made by the agencies driving the reform and their managers to fill this information gap and reduce anxiety among electricity customers while clarifying the effort to improve on the gains of the reform. But there are exceptions.

And it was heartening to note one of the exceptions with the appearance of the Director General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Ezra Dikki, on the “Good Morning Nigeria” programme of the Nigerian Television Authority (NTA) on February 23, 2015.

The fact, for those expecting a quick solution to the issue of power availability due to the reform, is that electricity is not instant noodles. And as Mr. Dikki explained during the programme, the gains in the sector would not manifest overnight; for unlike reforms, which brought immediate results in other sectors, the power sector reform requires time as investment in the sector is capital intensive.

Putting the seeming delay in the manifestation of the gains in perspective, he explained that power equipment like turbines and other ancillary products cannot be bought off the shelf, as the investors have to place orders for such equipment, which take between three to four years to deliver.

Presented with such explanations, it would be hard for anyone not to see the point of his also saying that it would take between two to three years before Nigerians would begin to experience dramatic changes in the power sector, even though significant impact has been made.

And for specific steps taken to improve the current situation, he revealed that investments worth over N300 billion have so far been injected into the power sector since its takeover by private investors about 18 months ago, while clarifying that the investments are for the upgrade of power infrastructure, which had become obsolete over the decades due to new and evolving technologies.

And he got more specific, citing the Egbin power plant where a new investor has ploughed in over N50 billion to rehabilitate the plant’s Line 6 in order to generate extra 240 megawatts so as to improve power supply in Lagos and its environs to the benefit of the inhabitants.

He further gave hope by revealing that infrastructural development by the new investors has led to a considerable reduction of power interruptions nationwide. On the same positive trajectory, he noted that over 2, 000 engineers and technicians have been employed during the reform. And with his revelation that the Power Holding Company of Nigeria (PHCN) neither employed a single worker nor brought in new investment for over 16 years as a public monopoly, he also hinted at the type of problems in the sector and the effort being made to resolve them.

Urging electricity customers to exercise patience, he also explained the issue of inadequate supply of electricity meters as due to the complex technology used in producing “smart meters” now used globally, which stores information on the consumer, the level of power input and other statistics relevant to the electricity market.

On vandalism, he expressed optimism that the new initiative by the President Goodluck Jonathan’s administration to safeguard the pipelines with technological devices would bring the menace to an end. Thus, he gave hope that a solution is in sight.

My summary purpose is to highlight how a regular dose of such explanatory interventions by the relevant authorities can help boost public confidence in the capacity of the sector to achieve its goal of supplying steady power despite appearances to the contrary.

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