Last month, President Goodluck Jonathan unveiled far-reaching short and long term measures to
solve the nation’s power problems. The wide-ranging reform plan or roadmap would culminate in the Federal Government selling 51 per cent of its stakes in 17 out of the 18 successor companies to the Power Holding Company of Nigeria (PHCN) to core investors from the private sector. Eleven of the companies slated for sale next year are into distribution while the remaining six are in the generation business. The Transmission Company of Nigeria (TCN), which is in charge of the National Grid, will not be sold but, according to the roadmap, will be managed by the private sector. President Jonathan added that "Nevertheless, the actions and decisions of the Federal Government will continue to exert a significant impact on their commercial effectiveness."
Essentially, the government plans to gradually withdraw from the power sector and allow a private-sector led reform to revive the sector. The idea is for the power sector to emulate the success recorded in the telecoms sector after privatisation. Although the possibility of this happening cannot be totally ruled out, the ongoing NITEL privatisation debacle is still there to educate government on the pitfalls which must be avoided. Government should appreciate that while the regulatory body for the telecoms sector succeeded in driving growth among privately-owned companies operating in the sector, the privatisation process of NITEL, the state-owned telecommunications company, has been tortuous and yet to be completed after several failed attempts. This is why the regulatory framework will be crucial to the success of the roadmap for reform in the power sector. The regulator must be allowed to enforce the rules of the game.
When Late Alhaji Umaru Yar’Adua took his presidential oath in 2007, power topped his seven-point agenda. He promised to declare a state of emergency in the sector within the first 100 days in office. But the Yar’Adua administration ran into problems when it began to reverse the little gains achieved in the sector by its predecessor. Wrong signals were sent when the privatisation of PHCN’s 18 unbundled units was suspended. The refusal to complete the power projects initiated under the Obasanjo administration also did not help the situation. The Yar’Adua government could not go beyond setting up panels to map out the way forward for the beleaguered sector. It is therefore heartening that definite plans are now in place to attract private sector investment of over $10 billion annually over the next decade as part of efforts to raise power generation from the current 4,000 megawatts to 7,000mw by April 2011.
The power problem has been a major factor in the inability of the country to achieve sustainable development but the government expects that the country will attain regular power supply by 2013. This is laudable as it would fulfill the yearning of over 140 million Nigerians for regular supply of electricity. According to the Central Bank of Nigeria (CBN), 60 million people rely on alternative sources of energy and spend an estimated $13 billion annually to buy, maintain or replace electricity generating sets of different shapes and sizes.
It is shameful that in spite of Nigeria being Africa’s biggest oil and gas producer, Nigerian businesses and households still rely more on electricity generating sets than the PHCN for power due to constant outages. Yet, without power and energy, it will be impossible for the country to build a modern economy. The Federal Government must understand that sustainable power supply is the key to the economic recovery of the nation. As soon as the government can guarantee reliable power supply, there is no doubt that the manufacturing and other sectors of the economy which are on the verge of extinction would bounce back to life.
In the last 12 years, the Federal Government has pumped huge resources into the energy sector with little to show for it. Under the administration of former President Olusegun Obasanjo, billions of naira was approved for the execution of Independent Power Projects (IPPs) across the country and nothing meaningful came out of it. Instead allegations and counter allegations of fraud became widespread. Some federal lawmakers including the then Senate committee chairman on power and his House of Representatives counterpart are still facing trial over fraud allegations involving award of contracts at the defunct rural electrification agency.
Officials that will implement the roadmap must take transparency as their watchword. This is the only way that the government can ensure that Nigerians feel the impact of this latest initiative aimed at turning round the embarrassing power situation that has paralysed the manufacturing industry and driven many industrialists to neighbouring countries.
