Power Crisis: Saraki Leads Search for Sustainable Solutions
“We are on the verge of a total systemic breakdown and I see this (the Power Sector Dialogue) as an opportunity to stop this train from derailing completely. Wherever you go in the country nothing represents the failure of the government and leadership in the mind of Nigerian like the epileptic power situation in the country. Fixing it is at the highest priority list of our people. In other words, our people are demanding that we do all that is in our power to reverse this long and unenviable power sector blight. We must get it right.”Dr. Bukola Saraki, Senate President
Among the many initiatives designed to fix the worsening power crisis, the call for a sincere Nigeria first dialogue by all stakeholders and use of a scientific approach by the Senate President Dr. Bukola Saraki to resolve power sector issues sector stands out argues Nathan P. Ajene.
The series of active efforts championed by the Saraki-led Senate to speed up the process of addressing in a more sustainable way the shameful power crisis which has become a social and economic emergency shows that the upper chamber is concerned and serious about using its legislative influence and power to make direct and real differences in the lives of Nigerians.
Although the Senate is a law making body and has little executive capacity, it is using the power of its influence to create systemic impact at so many levels. One, to put the executive branch along with its ministries and regulatory authorities in check so they accord top priority to fixing the problem rightly. Two, to put pressure on industry players running the power sector to deliver on contractual obligations and three, to set a national stage for a frank national dialogue on the power crisis.
The 2-day Power Sector Dialogue which was recently convened by the Senate in Abuja is a good example of the increasingly active participation of the upper chamber in the search for solutions to the worsening power crisis in the country. It provided a high level platform for stakeholders, power sector operators, regulators, traditional rulers, investors, captains of industries interest groups, civil society organizations, government leaders, legislators and the public to have an honest discussion of the key issues that are making it impossible for progress to be made in the power sector.
In attendance were the Chairman, Senate Committee on Power, Senator Enyinanya Abaribe, his counterpart in the House of Representatives, Daniel Asuquo led notable dignitaries like the Oba of Lagos HRM, Rilwan Akiolu, Minister of Works, Power and Housing, Mr. Babatunde Fashola, President of Heirs Holding, Tony Elumelu, DG, Bureau of Public Enterprise, Dr. Vincent Akpotaire, MD, NEMSA, Prof. Peter Ewesor and representatives from the Nigerian Electricity Regulatory Commission (NERC), Dangote Group and Ministry of Petroleum Resource.
The discussions at the meeting threw into the open several issues which are collectively frustrating the progress of the sector. The issues ranged from the shortage of gas supply to the generating companies, vandalism of power equipment by criminals to the stifling inability of the government to offset an estimated N242billion debts owed to the various generating companies through the Nigerian Bulk Electricity Trader (NBET).
But as real as the problems are, they are only the manifestation of fundamental problems: lack of proper planning, a faulty privatization process that put personal interest first and national interest last and therefore put the power assets into the hands of people without the capacity to perform. The result being the crisis that the country faces today and of course the discussion of the problems that should have been anticipated and checked early on.
The Senate President, Dr. Bukola Saraki pointed this major lapse with a most brutal and frank speech that aimed at the roots of the problem.Though his focus was on moving forward and finding solutions, the Senate President spared no punches while addressing all stakeholders at the event. He took direct and bold aim at the Generating Companies, known and Gencos and Distribution Companies, called Discos and relevant key players within the power sector who were actually present at the event. He called out as fraudulent the privatization process that carried out the sale of the country’s power assets to GENCOs, the DISCOs. He also stated bluntly how vested interest groups hijacked the process, threw transparency and standards to the winds and sold the assets to people who had neither the technical nor financial muscle to turn them into real value and run them for the people.
With a promise to lead the way in frank conversations about power that puts Nigeria first, he made a good case that unless all players join him to speak frankly, open-mindedly, honestly with specific contributions the country will not get the right solutions.
His incisive remarks which reflect the anger and the urgency with which the power issue should be engaged are significant and deserving of emphasis.
One, he made the point that the problem could have been avoided if the privatization process was transparent, international standards were adhered to and the right people emerged as winners. This clearly was not what happened and he was bold enough to state it as it is. “Where we are is not an accident. We walked our way into the landmine we are facing with the decisions we made in the past.While privatization is a right policy recipe to pursue in order to put in place a power sector that can galvanize our economy, we forgot that the participation of the private sector is not an end in itself. We neglected that unless this is done, observing transparency, competition, transaction integrity we might end up with a sector worse than the past.” He said. The beneficiaries of the privatization process instead of producing solutions to the problem they were brought to solve have now become the problem that needs to be funded and fixed. At the receiving end of this confusion are the ordinary Nigerians, business owners and industries which are finding it increasingly hard to cope.
Explaining further the Senate President said that the privatization process was not designed to benefit Nigeria but for the profit of elites and it is not surprising that we are getting bad results today. Power assets were sold to individuals and parties who had no idea about running a proper power distribution business; Licenses were issues based on cronyism rather than capital adequacy, market experience and capacity to deliver and agreements were faulty and transaction integrity hardly imperative.
In addition, GENCOS bought generating units without a clear assurance of source of gas to fire plants and government had no active roadmap for delivery of a gas market infrastructure to make this happen. Yet gas companies and the IOCs were exporting our gas out of our shores to create gas markets elsewhere in Europe and Asia while we languished in darkness as a result of incessant, persistent and erratic power outages.
The Senate is playing a very important role that will hopefully signal a new chapter in the power sector for good. Power is so critical as the first foundation of national development that the lack of it reduces the impact of all other efforts being made by the government to get the country out of recession, re-set the economy and move the country forward sustainably. In fact, the country cannot take off full throttle without fixing the power problem.
While it is true that a more sustainable long term solution is needed, it is also true that Nigerians do not have the patience to wait. The Senate’s support for ongoing executive actions to make the best of a bad situation is therefore a right step in the right direction. Long term, the Senate has set the stage for a new emphasis on the truth as a foundation for policy review. Its strategic focus on understanding the genesis of the country’s energy crisis without leaving any details or facts out; clinically itemizing the errors that were made in planning and execution of power policies; getting all stakeholders to discuss common concerns and reach consensus on practical solutions that can be sustained.
The question has always been why and how we got to this situation in the first place. Was it the lack of money? The answer is of course no. Within the past 14 years, over N2.7trillion has been spent on power. Sadly, not much has changed. The country can only boast of a generating capacity of less than 5000 megawatts, a transmission system that is seriously challenged and breaks down frequently. Currently, the country is witnessing the worst power crisis in its history.
In our industries, offices, homes, the physical inconveniences and the huge costs of this problem are on display every day. Small wonder businesses and industry leaders are complaining of increasingly high production costs which makes it difficult for them to compete with goods that are imported from other countries. The bottom-line is that the power problem is the single greatest obstacle in the path of national economic transformation and industrial renaissance.
The reasons for the Senate’s concern are quite clear. First as representatives of the people, national assembly members feel the pain of this issue through the feedback they get from their constituents. Second, the Senate’s focus on this crisis is very much in line reflects the priority given the economy in its agenda – recognition that power is crucial to the success of the made in Nigeria campaign – in lawmaking and ancillary initiatives. Third, given its focus on the passage of laws that can give structure to the economy and get us out of recession, the senate has no choice but to focus on the no one obstacle militating against the way of a resurgent national economy.
In conclusion, it is clear that for real progress to be made in this sector, it is important for government and all stakeholders to confront and admit the foolishness and mistakes of the past which have put the country in this situation. Gaps that exists need to be identified and bold actions taken so we can make progress quickly. The country cannot afford to make any more mistakes on this very important subject matter anymore. It is either we fix it the right way or accept that this story will continue.