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Sonala Olumhense: Giant in the dark: Monopoly money does not feed an empty stomach


Sonala Olumhense: Giant in the dark: Monopoly money does not feed an empty stomach

By Abraham Ogbodo

Last June at the International Conference Centre in Abuja, the Nigerian government launched its Presidential Mid-term Report to celebrate its achievements since 2011.

The report opened with a review of the power sector, with which this comment is concerned, and was lavish about the performance of the current administration.

It noted improved power generation of about 4502 megawatts in December 2012, “the highest level” since 1999.

The government then bragged: “By July this year power generation will hit 6,000 megawatts and by December this year it will hit 10,000 megawatts.”

It attributed the “improved power supply” partly to the emergency declared in the gas sector in 2012 by President Goodluck Jonathan, pointing out that his intervention had led to greater gas production than was required for domestic consumption.

“Today, large parts of an unprecedented number of cities and towns across the country are enjoying between 14 and 16 hours of uninterrupted power supply, except in some few areas where localized problems of power distribution network have created bottlenecks for smooth transmission,” the report said.

The back-slapping and disclosure of amazing new targets were taking place as the government was selling the Power Holding Company of Nigeria (PHCN) to private investors as part of its reform.

Curiously, on June 3, Sam Amadi, who chairs the Nigerian Electricity Regulatory Commission, told the News Agency of Nigeria that Nigerians were to expect only between 5000 and 7000MW megawatts by 2014.

But apparently conscious of the need to protect his job, he acknowledged the government’s midterm report, saying, “By our projection, we will get up to 10,000 megawatts by first quarter of 2014, but the commission prefers to expect a much lower figure, which is 7,000.”

July arrived, there was no 6000MW.

In September the government formally handed legal control of 15 PHCN companies to their new owners.

December arrived, but there was no 10,000MW either.  Actually, in December, officials of the government were still buying generators.

And then we entered 2014 and all the outlandish reports and projections began to crash on their faces in earnest.  Nationwide, there are increasing reports of worsening electricity supply, with confirmed generation capacity only of 3,220mw.

Still, on February 10, the government threw more fuel into the fire, adding a new $550m gamble to its $1bn Sovereign Wealth Fund aimed at solving the electricity riddle.

On February 20, Nigeria’s busiest international airport, Murtala Muhammad Airport in Lagos, was thrown into total darkness.

Various reports on March 25 said power outages were becoming worse nationwide, sometimes for several days in a row. On April 1, a survey by NOI Polls, which studies power supply to households, reported 54% of Nigerians as saying power supply had gone bad, or worsened.

“Findings across the geo-political zones indicate that the highest proportion of respondents that reported bad/worsened power supply was from the South-West region with 66 per cent of respondents, followed by the South-South region with 59 per cent and the North East region with 58 per cent,” NOI said.

A Vanguard newspaper survey last week found that Nigerians now enjoy only about two hours of electricity weekly (about 17 minutes per day), and that some areas have not seen a flicker in about three weeks.

A report in the Daily Trust, also last week, underlined the deterioration of power supply in Abuja, and in nearby Nassarawa State.  The newspaper also confirmed that electricity generation has stagnated at about 3220MW.

That figure was actually announced three weeks ago by the Minister of Power, Chinedu Nebo, who blamed the mess on gas pipeline vandalism in the country. He told journalists in Abuja that in the past few months, about 2,300MW has been lost to the vandalization of five different pipelines that supply gas to the national grid.

Even if we had all of that, we would still have been miles behind the government’s propaganda, but worse news was in store for consumers last week.

At Ehingbeti 2014, the Seventh Lagos Economic Summit, power sector operators warned Nigerians to expect no quick answers, citing problems they had apparently never imagined as they purchased chunks of PHCN, such as infrastructure, revenue collection, pricing, and gas supply.

Despite all of that, frustrated consumers are being asked to pay more for the power they are not consuming.  Little wonder they are beginning to take their exasperation to the streets.

Twice last week, residents of various Lagos communities under the Ikeja Electricity Distribution Company (IKEDC), including Ikotun, Mafoluku, Ojota, and Agbede-Ikorodu held public protests.

“We came here to demonstrate the deep pain in our hearts that the power supply in our area has gone from bad to worse,” one man said.

I have no doubt that the Jonathan government is more committed to the electricity question than his predecessors since 1999.

If true progress is to be made, however, it must be clear that his commitment is a matter only of degree, not of substance.  Such success will not come not through public declarations of commitment, but from tough policies that address the real challenges, and from transparency.

Among such problems is the cozy relationship between top officials of the government and criminal businessmen who benefit by the billions of dollars from generator importation, and from pipeline vandalism.

For as long as the government continues to support the extremely lucrative generator and diesel importation racket, these businessmen will find no real motivation to support the so-called reforms in the power sector.

A similar concern extends to pipeline vandalism.  It is curious that the government declared an emergency in the gas sector in 2012, for instance, with no discernible security component, allowing those vandals to dictate whether the reforms succeed or not.

Transparency: the government continues to negotiate foreign loans, including in the power sector, ostensibly for the purpose of boosting development.   Nigeria’s $1billion bond, for instance, was over-subscribed four times over; giving ammunition to a government eager to feed the propaganda that Nigeria is Africa’s investment destination of choice.

Perhaps, but our experience is that those foreign investors are certain to make a huge profit, alongside ruthless local businessmen and politicians who take their share of those loans, completely unconcerned that nothing is delivered to the people.

If this giant is to come out of darkness, the government must find the character to fight for the stated objectives, and for offenders to go to jail.  So far, it has not shown it can do either of these.

Transparency: the government must win the confidence of the people, but it cannot achieve this by means of the bogus statistics it continues to manufacture.

Nigeria was never going to achieve electricity generation of 6000MW in July 2013, let alone 10,000 in December.  While we are on this point, let us remember its target is 20,000MW by 2020.   Clearly that is another statistic probably penned by the same government alcohol drinkers who say Nigeria will be one of the world’s top economies by that year.

It is not impossible, but as Nigeria demonstrated last week by the rebasing exercise, Monopoly money does not feed an empty stomach.

– This Best Outside Opinion was written by Abraham Ogbodo/Guardian

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