Where Nigeria got it wrong on power

Comrade Raji Ahmed Rufai served as the deputy secretary general, North, of the Senior Staff Association Electricity and Allied Companies (SSAEAC) and had been an active unionist under NEPA, PHCN and Kaduna Electric. Now retired,he says the federal government needs to review the power sector privatisation to unlock investments into the sector.

What is your view on the current state of the power sector in Nigeria?

The sector has collapsed. In the country, there are lots of areas where they don’t even have supply. The sector was privatised in 2013 and sold to people who we believe don’t have the capacity because largely the basic issue at stake in my opinion, is that it has collapsed.

In terms of generation, transmission and distribution, would you say it is near what the country deserves?

We said we have a capacity of about 13,000 megawatts but as it is today, we cannot generate more than 5,000.  In the last 20 years it has been  5,000. When we were in service, it was still 5,000 that we were generating.

So, when we left service, as I’ve told you, this sector today is about 12 to 13 years of privatisation. It has not moved from where it was when it was in the hand of the government. So, both the generation and distribution are doing badly. The point is that all the three arms of the sector are only looking good, especially the distribution aspect because it’s the weakest link.

If the distribution had been okay, we won’t see the shortcoming often. The government is doing much on the transmission sector because it has done a lot of work. It has created a lot of networks but if other sectors can’t match this, that means whatever the investment government has done has not yielded any fruit. It means we still have not moved anywhere.

The power sector is one that has defied many solutions after several administrations, why are we still not able to get it right despite many policies and approaches?

It is not that it has defied solutions because if the power sector wants it can still work minimally as it is. It is just that the government has no time to fix the rot. There are several agreements signed by the generation and distribution sector on power purchase and I don’t think it has been fully implemented because what is likely happening in the distribution sector is very bad.

Nigerians are the ones responsible for whatever that’s happening in the network, they buy transformers, cables lines and what have you. Then apart from that, technical knowledge of the sector is no longer there. So, there is inadequate manpower and also non-competent manpower.

Then the third side of it is that the companies are so large for one person or one organization or one group of people to manage. You cannot imagine somebody in Kaduna managing up to Sokoto, Zamfara and Kebbi.

He has about four states. They are as large as they are. And in the electricity sector, they cannot even manage a small unit of it. Lack of investment is an issue. Qualified manpower is also an issue.

The current administration came with some reforms like the categorisation of consumers into bands, higher tariffs etc but consumers still complain of not getting enough supply, is something wrong with the policy?

You talk about availability and adequacy before you talk of whatever arrangement to prioritise customers. The band system came in so that those that have the ability can support those that do not have the ability. So that the tariff that had been generated there can also subsidise for others. But the point is, when you don’t have the electricity supply, there’s no question of a band there.

There should have not been Band A, B, C or whatever in the first instance. The government should look seriously into that sector. I can say it is far behind in reforms success and Mr. President needs to sit up on that, he needs to put eyes and people that would step up and change what is going on. It is really disturbing that this rot is allowed to continue despite how important it is to the Nigerian economy.

Many thought that with the privatisation of the sector things would go well, but even the new owners have not been able to get it right, why is this so?

You see, when we say privatisation is to free a sector from government inability to allow the private investors to make a turnaround and, in many countries, but it is done with accountability. When we were in service, I can tell you, we advised the government not to go into this full privatisation that it will not work as we know those that came in did not have the capacity. But the government went on to privatization. It was privatised and handed over to people who lack the capacity.

If the government had handed it to people who had the financial model and knowledge about it, then I’m sure the sector would have turned around. In this scenario, at the instance of 2013, you would not find people like Dangote in the sector, BUA or Tony Elumelu, they came in later. The unknown investors just came in to do what they like after.

But as it is still in the private sector, then the government is still pumping money into it.

Lots of money has gone into the sector and Nigerians are wondering if more funds should be injected into it. What is your take?

That is the reason why I said, if there is anything the government has not done right, it is the power sector. They continue to go and deceive the government that they cannot afford to pay for some infrastructure and when they took over this sector, they took over with a liability management company, so that the government will take responsibility for any cost  of pre-privatisation.

The question is, are they fooling the government? They are just using the inability of customers to pay to look for intervention.

How did other countries like South Africa get it right and is there anything we can pick from their experience?

In countries like South Africa, they are not placing the entire country on one grid. What they did is to segment the grid to provide electricity for different areas.

But the scenario we have in Nigeria today, you have Mando that supplies the north and you have Benin that supplies the southern part of Nigeria. You see, what they have there, you have Ekom that supplies only industrial areas so, they don’t give to the residential.

What we have in this country is every aspect of our electricity requirement on one grid, whether it goes to a commercial customer, an industrial customer, whether to a residence, whatever it is, is lumped on one.

But we have to segment this if we want to have enough electricity. All this advocating of placing customers on bands will not work.

If you have at least a direct source, where you have industrial customers, you can charge them and they’ll pay. But when you go to villages or you go to houses that cannot even make N5,000 and put them on these bands, how will they pay?

Second is our attitude as citizens of this country is also contributing because electricity theft is on the high side. The sector is an open sector, very porous, and therefore Nigeria sees electricity needs to be stolen because they cannot afford to pay. So you need to have a mechanism that will curtail all these abuses.

The funny side of it is that when you go to highbrow areas, people bypass their meters, people that you expect to pay. So, it is a combination of many factors, but largely you can blame the government for this.

What is the way out?

Government should review this privatisation exercise. We are not saying the government should cancel it but should review  it. In the first instance, like what I’ve suggested to you, the large size of the organisation will not be able to monitor this sector.

That is, you are having one person in Jos, covering Plateau, Benue, Gombe and Bauchi, it’s so large. Also, they will not have enough capacity to invest. So largely, what is important is that you reduce the size of this organisation, you need to invest. Then there must be enforcement on payment of electricity bills. With that one, we will be able to have say 50-60 percent.

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