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Still On Power Sector Privatisation

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Unarguably, the public outcry over the inefficiency of the power sector to provide electricity to Nigerians most of who spend more hours without electricity supply from both the distribution companies-DISCOS and the generating companies-GENCOS, has reached a crescendo.

In 2013, federal government privatised the power sector with the distribution and generation sub-sectors split and sold to private owners, in a move aimed at enhancing electricity production, distribution consumption in the country.

Regrettably, in the opinion of this newspaper, years after the privatisation exercise, there has been no significant improvement in the power supply situation. It is disconcerting, to say the least, that the power sector is still in shambles, after years of alignment and realignment by successive governments and the expenditure of over N1 trillion naira.

Clearly, the objective of the Power Sector Reform and the attendant privatisation was to establish an efficient and effective Electricity Supply Industry (ESI) and develop a competitive market, which will be private sector driven. It was also envisaged that this can be achieved by providing a level playing field to all investors, whether local or foreign, through the setting-up of an efficient and effective transmission system.

Actually, since November 2013 when the Power Holding Company of Nigeria (PHCN) was unbundled with successor companies handed over to new owners, Nigerians have waited with bated breath to see an improvement in the supply of electricity. The optimism of most Nigerians was fuelled by the government’s decision to target the generation of 10,000 megawatts of electricity daily.

Unfortunately, this optimism has turned to despair with most Nigerians resorting to providing power supply for their houses and businesses through varied means. The situation has become so bad that the Senate recently made a case for the review of the entire process.

The calls by the lawmakers are coming on the heels of demands for outright cancellation of the whole privatisation exercise by most Nigerians who believe that the process was not meticulously done.

The senate made its position known when it deliberated on a motion sponsored by former Benue state governor, Senator Gabriel Suswam (PDP, Benue East). Suswam while speaking on the motion observed, rightly, that stable power supply is a critical factor in the management of COVID-19 patients and the implementation of the proposed upgrade of healthcare facilities across the country.

 

“Prior to the outbreak of the COVID-19 pandemic, the Nigerian Electricity Supply Industry (NESI) was already facing teething operational constraints including the absence of cost-reflective tariffs, inadequate enumeration and metering of consumers, limited access to funds for investment, poor revenue generation and high levels of aggregate technical commercial and collection (ATC & C) losses, Generation Companies (GenCos) were owed 72 per cent of their revenue in 2019 while the Distribution Electricity Companies (DisCos) reported average ATC &C losses of about 41 per cent in the same year. All these constraints prevented the NESI from performing optimally across the power value chain” Suswam said.

 

But more than anything else, the fact that Nigerians still contend with epileptic power supply in spite of huge government’s investment in the sector has further underscored the need to critically review the privatisation process.

It is the consensus of most Nigerians that the entire process was not transparently done but rather, used as a platform to reward political loyalty consequent upon which incompetent players were chosen in utter disregard for those with the necessary technical expertise. This penchant to sacrifice merit for mediocrity which has unfortunately been the bane of our nationhood, is at the heart of the mess the nation currently finds itself in the power sector.

As a newspaper, we believe the time is long overdue for the nation to embark on a holistic review of the power privatisation exercise. There is absolutely no reason whatsoever, for Nigerians not to get effective power supply, after humongous money amounting to hundreds of billions had been sunk into the sector.

Even after government’s huge expenditure in the sector as bailout, the DisCos for instance, still collect money from Nigerians on issues ranging from supply or repair of broken down transformers and, ridiculously, electric poles.

We are worried that shortage of electricity supply still persists and has continues to paralyze social and economic activities, inflicting untold hardship on the life of the populace and businesses.

As a newspaper, we share the views of most Nigerians who believe that the privatisation was a sham. In simple terms, we are where we are because the process was not thorough and to get out of this mess, government needs to review the entire process.

All things considered, the government has little or no choice but to review the exercise so as to open up the sector for investors with both the financial capacity and technical expertise to inject fresh investments to turn the sector around.

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