• Wednesday, June 19, 2024
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Lessons for Nigeria from Kwaras electricity success

Is it Time to Establish a Parallel Electricity Market? (Part 1) Liquidity Crisis


The Kwara case is a resounding success which is at variance with the abysmal performance of the federal government as it strives to fix the national electricity sector
Those who are weary of Nigeria’s electricity woes should go to Kwara State now. In the business capital of this north central state of Nigeria, visions of how economic problems can be fixed are in the air. This has been stimulating entrepreneurial enthusiasm, underscored by the horde of confident small businesses and new businesses springing up around the neatly laid out capital city-Ilorin.

Ilorin’s business community is among the most believing that the country’s electricity ailment can be fixed.
Omolola Grace Olobayo is one of such strong believer. The group managing director of Doyin conglomerates, whose manufacturing concerns like so many others in the country are breaking under the crippling electricity cost they carry and in the midst of an inexplicable fuel crisis, says the country’s power sector can be fixed just like Kwara State fixed its electricity needs.
Omolola suggests the approach is to put the Kwara blueprint at the core of a national crisis resolution framework for electricity-(she spends over N200 million annually powering her factories generators and offices across the country).

Indeed, one of the first things visitors who ask about the Kwara state electricity successes are told is concerting. There is nothing difficult in making electricity available on a much more effective way than it is today says one Ilorin resident lawyer. What Saraki did was to put the thing together by deploying step downs and new transformers all over the place and then just light up the state. He did not invent the wheel he used the knowledge that he could find where ever he could find it in other parts of the country and the world.
The state policymakers are spearheading Kwara’s transformation from a federal allocation’ dependent state to agro-industrial economy, attracting not just local organizations but multinational corporations with the hunger to make some meaningful buck off Kwara’s huge consumers-but innovators eager to leverage the wisdom and work ethic of the forward looking leadership of the state to grow their bottom line.
From agriculture to tourism to investment and aviation Kwara State has an over-sized ambition. Their visions of grandeur are complemented by the will to provide sustainable electricity.

The Kwara blueprint is based on the resolve of the State’s governor, Bukola Saraki, to lay plans for the future that includes the implementation of a forward looking industrial and economic stimulant projects focused around sustainable electricity programme throughout the state.
Saraki, according to close sources, grew even more serious about fixing the state’s power need following a federal executive meeting where President Yar’Adua presented what many viewed as his administration’s incapacity to resolve the electricity issue. Yar’Adua had asked for collaboration in the resolution of power supply in the country from the 36 state governors at the meeting. He wanted the state governments to contribute a measure of their income to the National Emergency Power Project Special Intervention Funds
Shortly after that meeting, Saraki wrote a formal letter to the state house of assembly seeking approval for the use of the excess crude funds meant for the state and the 16 local government councils in the state as the state’s contribution.
Saraki told the Assembly that over $50million of 0.94 per cent will be required with the state government contributing $30.7million while the 16 local government councils in the state would contribute $20.6 million to the fund.
But his resolve was even more re-enforced when he was presented with the grim economic picture for the state following dwindling revenues and finance for critical infrastructure.

So, Saraki and his crop of policymakers began thinking of plans to re-focus the state’s governance processes. A plan built around structured funding strategy was subsequently put in place to drive long term financing of key infrastructure in the state, particularly electricity.
But the ground work for the success experienced today was laid way back in 2003 when he identified rural development as a potent growth tool. He quickly moved to create a structure to crystalise the strategy for implementation.
His first step was to set-up a committee to asses the power supply situation in the State and a three year plan was drawn up. The rural electrification projects abandoned by his predecessors were identified and quickly completed. Transformers were acquired for the proposed electrification projects in the state. These measures were reinforced with the construction of two power injection stations at the Agba and Sobi Dams in Ilorin. He followed that up with the supply of about 5000metres of aluminium conductors to Power Holding Company of Nigeria (PHCN).
This strategy was underscored by the subsequent take-over of the over N260 million Gannmo power project from the federal government towards the end of 2008. From the Gannmo project, the state today thrives on 20 hour of constant electricity supply. You can imagine the huge advantage of this. For the first time, we have been having 20 hours of electricity supply. That is having some important positive effect on our machines and a lot of improvements on the life of the people of the state in general. I just believe we will be able to maintain it in Kwara, Omolola told BusinessDay.
What this implies is that manufacturers in the state have the opportunity now to maximize productivity and allow the freeing up of funds for plant expansion and inclusion.
The Kwara case is a resounding success which is at variance with the abysmal performance of the federal government as it strives to fix the national electricity sector. For instance, the long term ambition and the greater realism attached to the policymaker’s aspiration goes beyond the provision of electricity to the state’s citizens. Officials acknowledged the huge financing need to sustain the process but also are driven by the desire to make example of how possible and easy it is to fix power problems firmly.
But above that is the desire to keep the people employed, grow a diversified revenue base and a diversified economy. The policymakers at the federal have none of these qualities-not displayed yet.

Again, the Kwara example provides a typical example for other states to follow. Abia State is making a clean break with the Aba city IPP project. It has the potential to extend the initiative across the state’s rural areas.
If the Kwara experience can provide some pointers for today’s stressed out federal policymakers, their subsequent approach should draw from those little things that Saraki did from the beginning. Having identified the problem he conspicuously put in place sustainable systems and structures to help the state find some economic strength. The evidence is there. The state is thriving.