Date Published: 07/01/10
Root Cause Analysis Of Nigerian Electricity Woes I: Issues and Problems By Churchill Okonkwo
Nigeria is one country with the poorest quality of electricity supply. Manufacturing firms, rural and metropolitan businesses rated their quality of supply the lowest and did in fact have the poorest quality of power delivered for all attributes. More than 90% of Nigerians cannot boast of 16hours of electricity supply daily. Power outages plague Nigeria's businesses, leading those who can afford them to rely on fossil-fuel-burning generators.
For millions of Nigerian people and businesses without access to electricity, the day finishes much earlier than in richer countries for lack of proper lighting. We struggle to read by candle light. We lack refrigeration for keeping food and medicines fresh. Those appliances that we do have are powered by batteries and private power generating plants, which eat up a large share of our incomes.
It’s been more than sixty days since President Jonathan issued a 30-day ultimatum to the presidential committee headed by him to roll out a workable blueprint for the power sector. This is coming at the heels of previous attempts and failures by the Obasanjo and Yaradua administrations. The initial activities and hype have however giving way to business as usual. The various committees have failed to come up with a workable plan; the President has quickly forgotten the urgency and need to address this issue that is critical to the Nigerian economy. Rather, he has resorted to touring the glove, from France to South Africa and now Canada.
What I want to do here is to critically dissect the problems in the Nigerian power sector and provide pragmatic solutions on what President Goodluck Jonathan must do to solve the perennial problem of inadequate electricity generation and distribution in the country.
The issues – corruption
The most critical issue that must be addressed in the Nigerian power sector is the problem of corruption in the polity. The failure of Obasanjo and Yaradua’s administration in revamping the power sector was not because of lack of good intent or finance, they failed because of huge money mapped out for various programs were embezzled and mismanaged.
There are so many questions on corruption and gross mismanagement begging for answers in the power sector. What happened to the estimated $13.5 bn spent by Obasanjos Administration on the power sector? The amount of money that has been sunk into the power sector under the presidency of Olusegun Obasanjo or the billons pumped into the Independent National Power Projects (INPP) is probably enough to solve the Nigerian power problem. The current the ongoing reforms in the nation’s energy/power sector anchored around Egbin Generating Company Ltd, a subsidiary of the Power Holding Company of Nigeria, PHCN is bound to fail unless the Nigerian public sector is cleaned from corruption and corrupt practices.
Nitel failed to provide functional telephone services in the country until we were rescued by private telecom firms; Nigerian National Petroleum Corporation (NNPC) has failed to refine the crude oil in our backyards and we have resorted to importation of refined petroleum products; Nipost and Railway Corporations have been mismanaged and rendered ineffective; Nigerian Airways ‘raped’ and baptized ‘Virgin Nigeria’; National Population Commission (NPC) failed to produce National ID card after Billions were spent; in all these clear acts of corrupt practices and mismanagement, nobody has been prosecuted and convicted.
Simply put, it is logical to conclude that any investment in the power sector under the administration of PHCN is bound to fail. So, why waste time and huge sum of money when all we need to is sell PHCN, maintain lasting peace in Niger Delta to guarantee gas supply and independent power projects will spring up to sustain the power sector?
Wastefulness - Natural Gas flaring
Another big problem in the Nigerian power sector is wastefulness. Nigeria, according to World Bank estimates, is currently losing on the average more than $ 2.5 billion (N332.5 billion) annually to gas flaring. At about 57 % of the daily production of over 2bn cf, the volume of flared gas is said to be capable of generating up to 6 GW of electric power annually.
Meanwhile, South Africa recently obtained a loan from World Bank for generation of Additional 4,800 Megawatts of Electricity by 2012 at the cost of 3.75 US Dollars. Even those of us - environmentalist - that care about the degradation of the environment and the risk posed by greenhouse gases in the changing climate can’t help but be fascinated at this additional power generation by South Africa through coal plant – worst greenhouse gases emitter.
The lessons for Nigeria from this however is that with proper planning and clear focus, you can use what you have to generate what you need. South Africa has abundance coal reserve that can last for hundreds of years and that’s what they are using to generate the cheapest electricity in the world. Nigeria has abundance gas reserve, but what do we do with it? We flare about 60% of the gas and export about 90% of the rest as Liquefied Natural Gas; embezzle the revenue generated and watch our power generating capacity drop to mere 3, 000 Megawatts.
The problems – inconsistency and lack of planning
One of the biggest problems we have in our approach to issues in Nigeria is lack of long term planning and inconsistency. Special Adviser to the President on Media and Publicity, Mr. Ima Niboro while taking about ongoing reform said that, “the Presidential Task Force is charged with developing and driving the action plan for the nation’s power sector with achievable targets within the lifespan of the present administration.” If by “lifespan of the present administration,” Niboro means May 2011, then, somebody should inform him and all the committees working on this reform that the only achievable target is the sell of PHCN. Even if PHCN is restructured and sold, where is the guarantee that the next administration will not reverse that? What happened to long term planning?
From the above analysis, it is clear that the current approach at reforming the power sector by Jonathan’s administration is a repeat of the same tried and tired attempts by Obasanjo and Yaradua’s administrations that failed.
But we don’t have to go down through this same path.
Churchill Okonkwo writes from Washington DC
To be concluded