President Muhammadu Buhari, in his New Year broadcast to the nation, talked about the nation’s attainment of 7,000 megawatts electricity generating capacity and the plan to boost it to 10,000MW by the end of his tenure in 2019. The current generating capacity is a far cry from the 40,000MW the nation needs to stabilise in terms of power adequacy.
There are obvious problems all the way down the power value chain as most of the time, the power that is actually transmitted and distributed hovers between 2,800MW and 3,200MW.
Power is the engine room of industrialisation in any country. Nigeria’s inadequate attention to this critical resource in its developmental efforts is inimical to its quest for rapid industrial transformation. For the better part of 12 years, covering the Ibrahim Babangida and Sani Abacha military juntas, very little or zero investment was made in the power sector. To make matters worse, the existing power infrastructure mostly at the Kainji Dam and the Egbin Thermal Power Station were neglected and allowed to fall into decay.
The transmission lines were not renewed and updated. Power sub-stations and other support infrastructure became grossly inadequate for the country’s rapidly increasing population and the modernisation of all facets of national life with its attendant need for power. For a country that needed to make about $20 billion yearly investment for a period often years to bridge the power infrastructure gap, this was a colossal neglect.
This was the state of affairs when a civilian democratic dispensation emerged in the country in 1999. But, what do you find? Almost 19 years after, the nation’s power infrastructure has hardly improved, as evidenced in President Buhari’s broadcast. It is only now that the 3,000MW Mambilla Hydro-Power facility is getting off the ground, 40 years after it was first conceived. After the first 16 years of this civilian dispensation, and investments estimated at over $16bn, the privatisation and commercialisation programmes of the government are yet to be completed. The Independent Power Projects (IPPs) are troubled and the Road map to power sufficiency drawn up by the immediate past Goodluck Jonathan administration and celebrated to high heavens was truncated ab initio by political considerations and systemic corruption.
The reality today is that there is very little to show for all those investments, and there is ample evidence that most of them were conceived for the funding of electoral campaigns and other patronage. The new owners of the unbundled power firms are mostly incompetent and lack the financial clout and technical know-how required to turn the sector around.
There has also been the long-standing problem of the laws which vested the residual powers for transmission, distribution and, until recently, generation, in the federal authorities alone. This had the effect of discouraging other levels of government from participating in the capital intensive sector. How were states and local governments expected to make the huge investments in power generation only to evacuate same to the national grid without any assurance of directly benefitting from their investments?
Even with the Road map to sustainable power that was eventually rolled out, there were a number of lacunas in the enabling laws and hence, bottlenecks in its implementation. The issue of pricing was never adequately addressed. That is why today, it still re-echoes. What is the right price for a unit of power and when should this be paid? Would it be after power supply has improved significantly as most consumers tend to argue, or now, so that power can be improved as the new owners insist?
This is a dilemma for government and, indeed, all stakeholders in the power sector. Recall that one of the first challenges that the Buhari administration had to face was what to do with a decidedly flawed power privatisation programme. Even now, that has not been resolved one way or the other. The most pragmatic way out of the conundrum which could mean contract cancellation is perhaps too risky and potentially too costly to contemplate.
Given our proven power resources, 5,000MW peak transmission attainment is a non-starter. The country has to tap the vast hydro, thermal, wind, solar and coal power sources that are abundantly available to it to sufficiently redress its current power deficit. It has to be the entire mix with an eye for local needs, home-grown solutions and international collaborations where necessary.
All hope is not lost, however. Government, working with the new power firm owners in conjunction with all relevant stakeholders in a liberalised environment, must find the will and wherewithal to institute the reforms and investment programmes required to achieve the needed results.