Sunday Onyemaechi Eze
The eventual takeover of five ailing Electricity Distribution Companies otherwise referred to as DisCos by the government and Fidelity Bank was long overdue. Kaduna, Kano, Port Harcourt, Benin and Ibadan were taken over in what the government called restructuring. PMnews reported that; “the Nigerian government in conjunction with Fidelity Bank and AMCON have taken over the affairs of five electricity distribution companies over debts owed to Fidelity Bank. Government took the step to save the companies from insolvency, among other reasons. The announcement was precipitated by Fidelity Bank’s activation of the call on the collaterised shares of KEDCO, BDEC, and Kaduna Electric. The companies have failed to repay loans obtained to pay for assets acquired in the 2013 privatisation exercise. The statement announcing the restructuring was signed by the Executive Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, and Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh. They added that the Asset Management Corporation of Nigeria (AMCON) would be a placeholder board for IBEDC in a temporary capacity while the PHED undergoes restructuring to prevent its imminent insolvency. The NERC and BPE chiefs said the new boards for the affected discos have been approved and the bureau was collaborating with the Central Bank of Nigeria (CBN) and the Ministry of Power to ensure no service disruptions during the transition.” Earlier Abuja Distribution Company was taken over by United Bank for Africa for the same loan default. It must be clearly mentioned here that the remaining six are not different from the sick five as well.
It was quite glaring from the onset that the challenges of the power sector in Nigeria cannot be adequately addressed by privatisation alone. Keen players in the Nigerian Electricity Services Industry (NESI) were skeptical during the run up to and the aftermath of the privatisation processes. The National Union of Electricity Employees (NUEE) vehemently resisted the idea of privatisation and had down tooled on several occasions to force the government to back out of the plan. Government never did. Those driving the process had a brief from powerful persons they cannot ignore. Technical competences, trained and equipped manpower, financial capabilities and readiness for continuous infrastructural upgrade and sustainability were key indices for bidding, qualification and eventual takeover. However, BPE defiled the set rules and standards – gave in to pressure from those who presented proxy -non-performing and non-technical companies to emerge winners of a critical sector like power.
Eventually, the electricity generation and distribution companies were handed over to politicians who are non-experts and green horns in the business. We lost it from there and then! In fact, the power sector was unbundled for the convenient allocation and handover to leading elites in the nation who have little or no knowledge or experience. A critical national asset like power was offered as a gift so to say to a few privileged individuals. For more than seven years, the services rendered by the sector went from “top to bottom.” We are all worse beneficiaries of the adverse effects of that selfish decision made by some interested few for the entire nation? The general expectation was that the government of Muhammadu Buhari should have terminated the contract after the initial five years tenure without pandering to the reactions of the elites and chart a new way forward. He never did even after condemning the process in the past.
The consequences of relying on our electricity supply needs provided by these crops of politically motivated Electricity Distribution Companies in Nigeria are dire. It was clear from the privatisation processes that the dilemma of the power sector in Nigeria will not abate soon. The laid down rules for choosing competent bidders were grossly abused by those in positions of authority who set the rules themselves. The global best practices BPE claimed to have adopted in selecting new owners have proved to be totally deceptive and false. The sector has continued to witness the worst form of rating in terms of service delivery. Grid collapse has become a regular phenomenon. States are thrown into darkness for days. In 2022 alone, the national grid had collapsed about fifteen times. At one point the cumulative energy available in the country went down below 1000kwh. Unfortunately, there were no consequences for management failure. Nigerians have continued to groan in darkness while the only mandate of the NERC seem to have so much cherished is the regular upward review of tariff charges.
As futile efforts were made to cover up the troubled sector by the government to no avail; the federal government has chosen not to do the needful – terminate the contract. This regime and others before it have not identified the nexus between constant power supply and national development. It has often chosen to be misled by political jobbers on the right steps to take for improved power supply for obvious reasons. Government had already burnt its fingers by investing humongous sums of money in a private business it obviously has no business rescuing from the onset. Over N300bn has been injected as an intervention fund for the DisCos while the nation groans in darkness. The worst case scenario is the inability of the DisCos to service and repair back the loan/intervention facility.
Customers are paying through their noses for ineffective services never rendered while still buying fuel and diesel at exorbitant rates to power their businesses and homes. Companies are leaving Nigeria in droves as a result to nearby African countries to produce and thereafter sell to Nigerians at exorbitant rates too. List of communities with no access to power supply for over one year abound. Many customers are regularly confronted with unnecessary crazy bills. Customer complaints are never addressed promptly. It is now normal for communities to buy and or contribute to repair faulty transformers, pay to repair faulty lines, buy broken poles and meters etc.
Many fingers were kept crossed waiting for an auspicious time like this. Expectedly, the new owners failed time and time again despite opportunities given them to improve. The takeover revealed the sick nature of the power sector. It proved that all is not well with the privatisation and the processes which sled to it. It was simply a matter of time before the consciously covered up sectoral blunder emerged in the public domain. The entire privatisation process should be reversed without further delay. The ideal situation would have been for those who think they have the will and capacity to do business in the sector to come up with their own fresh plans and initiatives. Build from the scratch their generation and distribution companies and find a way of selling their products to customers and compete with existing government owned companies. That they did not do!
Eze, a media and development communication specialist, writes fromKaduna via [email protected], 08060901201
