It would appear that President Muhammadu Buhari had done a special favour to the duo of Engineer Sale Mamman and Mr Goddy Jeddy Agba, by appointing them as Senior Minister and Minister of State, respectively, to the Ministry of Power.
However, this could be right only to the extent that the Ministry is supposedly a multi-billion dollar enterprise. But the bigger truth is that Engineer Mamman and his colleague have been handed the most challenging task, or if you like, the most difficult job in Nigeria at the moment.
To be sure, the struggle to provide efficient and adequate power to Nigerians has been a long and painful journey — since the days of NEPA and Power Holding Company of Nigeria: PHCN.
Nigerians had complained, cried and even demonstrated at various times over the failure of the now unbundled state-run NEPA and PHCN, following their consistent failure to deliver on their mandate over the years. To stop this miserable race of failure, the government decided to carry out a major reformation of the power sector, as a result of which we now have six generating Companies, eleven distribution companies, one transmission company and the Nigerian Bulk Electricity Trading, PLC. While retaining the Transmission Company of Nigeria, TCN, the government added the eleventh distribution company in November 2014. Now, more than ten years after this wonderful initiative, the problem has remained obstinate and intractable or even worse. As things stand today, the story about the power sector, led by the Ministry of Power, has remained illusionary as the various agencies under the Ministry continue to squabble and point accusing fingers at each other on the problems besetting the sector; while the issue of inadequacy or absence of power continues to pose a hindrance to Nigeria’s quest to be among the twenty economies of the world by 2020.
The gaping question even among the sector’s players is: “How much power does Nigeria generate and how much of it, is distributed?”
According to reports recently quoted in an editorial in Leadership newspaper, the country has an installed generating capacity of 13427MW of electricity, but between this figure and the actual distribution, which fluctuates around just about 3000MW, is an unaccountable or unexplainable loss of nearly 7000MW.
According to other reports, the current generating capacity is between 7000 and 8300MW, while the national grid is said to have the capacity to transmit 7000MW, an improvement from less than 5000MW transmission capacity inherited by Buhari administration in 2015. But despite this apparent improvement in generation and transmission of electricity, the distribution capacity has remained “Significantly Low” as recently stated by the Vice – President. In fact, during a recent courtesy visit on the speaker of the House of Representatives, the management of TCN admitted that the country’s transmission capacity has dropped to below 30% due to what they described as “inadequate integrity of the distribution network by the Discos.”
It is claimed that the Discos are unable to fully distribute the bulk of power wheeled to them due to a number of factors, including , Forex and macroeconomics realities, coupled with the fact that they have to pay for power that was not utilized.
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However, the Discos are not keeping quiet — they are also telling their story in a very desperate and combative tone as they prepare for the final review of their Performance Service Agreement (PSA) on December 31st this year. The Discos, through their Nigerian Association of Nigerian Electricity Distribution, took up a two full paged advertorial in one of the national dailies, in which they lambasted TCN for allegedly misrepresenting facts about the Nigerian Supply Industry (NESI). The Discos claim that there is a gross variation in the actual amount of energy delivered to the discos from the ones claimed to have been delivered to the Discos by TCN through the Multi – year Tariff Order (MYTO). The Association claims that the SIEMENS Electrification Roadmap for Nigeria report of 7th May 2019 says the electricity distribution capacity is twice (2X) that of transmission capacity. It simply means that the amount of energy received from the generating companies exceeds the actual energy transmitted and delivered to the Discos. The Discos claim that due to obsolete or outmoded communication systems of tracking energy flow, there have been multiple and frequent explosions, and burnings of sub-stations and transformers, resulting to partial or total system collapse, about 121 times, since privatization and Nine (9) times in 2019 alone.
Not only are the Discos craving for retention, but they are also asking for N1.9 billion Dollars in recapitalization.
But, TCN remains adamant that the Discos are the most inefficient in West Africa. During a recent power sector round table organized by MAINSTREAM ENERGY SOLUTIONS LIMITED, at Kainji in Niger State, the Discos took further bashing from other players in the energy value chain. Although the participants agreed that reversing the privatization of the Power sector or withdrawing the Discos was not in the best interest of the Country, they instead called for restructuring and recapitalization of the Discos. This was in spite of the claims that the Discos were unable to off-set their debts to the Gencos, unable to pay tax as well as maintaining operational loses of over N417 Billion.
Recently, TCN threatened to bar the Kano Electricity Distribution Company (Kedco) from electricity market because of its failure to raised its energy payment guarantee for 3 0days. While Kedco claimed it could not do so because it owed TCN N3.2 billion since 2015, TCN insist the Kano Distribution Company still owes N315.8 billion, representing only 50% of its invoice.
Still on these wild figures, the Nigerian Electricity Regulation Commission claims that during the 1st quarter of 2019, the 11 Discos received N190.1 billion energy invoice from the Nigerian Bulk Electricity Trading (NBET), but they paid only N52.8 Billion, just about 28%.
One source places the indebtedness of Discos to NBET at N270 billion. The Nigeria Electricity Regulatory Commission (NERC) has just issued a notice of intention to cancel licenses to eight (8) Discos pursuant to section Seventy-four (74) of the Electricity Power Sector Reform Act. The non-compliance bothers on low remittances and revenue under recovery. But these are not the only issues dogging the Nigerian Electricity Supply industry in the country. The generating companies, Gencos, are also up in arms with the NBET over the federal government intervention fund of N600 billion. They claim that NBET wants to deduct N2.7, billion representing 0.75 charge, on them.
Mainstream Energy Solution Limited Chairman Col. Sani Bello told the round table in Kainji that although the Gencos were doing extremely well, they were not receiving commensurate appreciation and support, explaining that in May – June 2019 Mainstream only received an invoice of 15%. This also affects other Gencos.
The other intractable issue affecting the industry is the problem of metering. Records show that out of the estimated N8.8 million power consumers only about N3.793 million are metered, representing 43%, while over 5 million others are on estimated billing. There are allegations among industry players and Nigerians that the Discos are not ready to meter consumers. But the Nigerian Electricity Management Services agency (NEMSA) has announced that the 11 Discos would install six million meters between 2019 and 2022. Three testing stations were said to have been opened in Lagos, Kaduna for this purpose.
Despite this miserable report and confusing numbers, President Muhammadu Buhari remains resolute about providing stable and efficient power to Nigerians. The President has demonstrated this by the various intervention funds being sunk into the industry. The Federal Executive council has just approved $5.7 billion for the formal commencement of the Mambilla Hydro – Electricity Power Project, after it had wallowed for more than forty years on the drawing board. The Mambilla Power Project has potential to deliver over 3000MW of power to National grid.
In his 2019 Independence day broadcast, President Muhammadu Buhari devoted over nearly seven paragraphs to the issue of electricity and the government’s continuing efforts to revolutionize the power sector in the country. He announced that a Presidential power initiative has been launched to modernize the national grid in three phases, starting from 5GW to 7GW; then to 11GW by 2030; and finally to 25GW afterwards. The program envisages localized development and assembly of smart meters as well as the operation and maintenance capabilities of transmission and distribution infrastructure.
This is coming as SIEMENS, A German Electricity Equipment manufacturing giant, in collaboration with the federal government, has produced an “Electricity roadmap for Nigeria” a bulky document that had x-rayed the power disposition in the country and proffered solutions or measures to tackle all the problems in the sector. The document followed a meeting between President Muhammadu Buhari and German Chancellor Angela Merkel in August last year, with the aim of resolving existing challenges and expanding the capacity of the power sector. The Presidency has just demonstrated this commitment by voting the second highest allocation of N127 billion in the 2020 Federal Government budget to the power sector.
With all the issues raised above, it is obviously clear that the failure of the power sector to meet the country’s expectations is not caused by the government’s lack of commitments but the insincerity of the players and our attitude as Nigerians.
Indeed, Nigerians should apportion blames appropriately and direct their anger and displeasure to unpatriotic and corrupt industry players rather than the government which has tried and continues explore all avenues of tackling the problem.
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Pricewater- Cooper ( PWC), a global corporate auditing and assurance company, has identified six key challenges in the power sector in Nigeria. They are: and liquidity constrains;
and obsolete distribution infrastructure.
These problems are not unsurmountable because not all of them have to do with government. In fact, PWC found out that Nigerians have not been good at paying bills. About #3.4 out of every #10 billed to customers was not paid to the Discos and only four Discos out of eleven surpassed the average collection rate of 60% for the first quarter of 2019. This has made it difficult for the Discos to meet their obligations to the Bulk Electricity Trading, NBET.
The Government under President Muhammadu Buhari has done everything possible including attracting the required foreign partnerships and support to move the sector forward but apparent lack of patriotism and corruption seems to drag the efforts backwards. The industry players seem to operate at variance to each other while some of the agencies have not subordinated their activities to the Ministry of Power.
Since assuming duties, the new Minister of Power Engineer Sale Mamman and his colleague, the Minister of state, Mr Goddy Jedy Agba, have been going round to physically assess the infrastructural development level in the power Ministry. So far, the exercise has revealed a mixture of fortunes. while there are cheering news for projects like the kashimbilla Hydro – electricity power project, there are a lot of issues on others, especially the Kaduna thermal power projects, which have so far gulped over 100 billion Naira.
Nigerians are clearly frustrated at the miserable state of affairs, but the government is clearly not relenting in finding solutions. The government is also pursuing options in the off-grid and small scale power projects to supplement or cover the gabs in the national grid.
Aaron Artimas is the special assistant to the Minister of Power on Media and Communication
