N1.5tn FG Spent On Privatised Electricity Firms Enough To Generate 20,000 Megawatts

Secretary-General of the National Union of Electricity Employees and Deputy President of the Nigeria Labour Congress, Joe Ajaero, speaks to ADEPEJU ADENUGA on various issues in the electricity industry including grid collapses, estimated billing and subsidy

Forty per cent of Nigerians are reported to lack access to electricity. Eighty million are reported to be underserved. How do you see these numbers especially with what the government has spent in the sector in the last 20 years?

It is an understatement to say that 80 million do not have access to electricity because I don’t know the demographics used to assess that. Nigeria is generating 4,000 megawatts, and the global index is a million people for 1000 megawatts, and the people that fall under that are classified as suffering from power poverty.

Now if we take four million people by the global index, you take 4,000 megawatts for four million people, what we would be having is 196 million people who don’t have what we call personal access to electricity.

Now, coming to the issue of funds spent, it brings us to another lane. At a time, the Obasanjo government was said to have spent over $16bn on trying to revive electricity. Then globally with $1bn, you could get 1000 megawatts. That money could have ordinarily given Nigeria 16,000 megawatts assuming we did not have any pole, line or anything.  But we missed it.

Then we now moved into the Energy People Projects. At a stage almost $11bn was spent, down to President Jonathan era. We didn’t have the desired results.

Now after privatisation, the Federal Government of Nigeria has pumped in as grants about N1.5tn given to the private sector. You sold your house and you are giving the person money to paint it; N1.5tn no matter how we think of it could have given us over 20,000 megawatts.

Estimated billing is still a challenge in the electricity industry. How bad is this challenge?

It is going to last longer because there is no consumer protection policy. You have a country that went to the market without getting prepared for it. There is no way you would privatise electricity without even having companies that can produce prepaid meters locally.

In countries, like India, you can enter into a shop and you will buy the prepaid meter. The technology is there; nobody thought of it; nobody perfected it.

Every commodity in this world has a measure. Those who want to buy fuel drive into a filling station and the meter is there. Even those that sell garri and rice in the market have the cup for measurement. You have a commodity like electricity and then, people are just estimating it; there is no facility to measure it.

In all the instances mentioned, it is the marketer that produces the measure; it is the woman selling garri that brings a cup, or the person that owns the filling station that puts a meter there. It has never been the duty of the customer to bring his own cup. They privatised without getting prepaid meters and Nigerians are suffering it seriously.

How do you assess the government’s mass metering project?

I happen to be serving in one committee on this, but not the mass metering. It is very unfortunate although the Nigeria government is trying to act like Father Christmas. From the analysis given previously, you can see that the government sold these facilities to some individuals who are in government.

The government though the Central Bank of Nigeria is trying to provide almost $104m for them to buy meters to give to Nigerians. Now you ask yourself, when they were privatising, they gave Nigerians about three reasons why they were privatising. They said they needed people with technical competence, people with managerial ability and people that have foreign direct investment.

In all these instances, none of them worked. Ordinarily, they should have cancelled this policy of privatisation. People came on a very deceptive note and took over. Why would the government equally give them money after giving them N1.5tn? The government is equally giving them money to buy meters? These same people took loans from Nigerian banks to buy Nigerian electricity. It is like portfolio investors. That mass metering project up till now is not working.

I happen to have visited some of the indigenous metering companies. Some of the distribution companies that were allocated some portions have not even gone there to collect them because they are making more money through estimation.

Labour unions are opposed to an increase in electricity tariffs. Why should you continue to oppose it when the IMF said the rich were the greatest beneficiaries of electricity subsidy?

Where are the International Monetary Fund operating from?  Is the IMF familiar with our situation? The countries the IMF comes from; do they have problems with electricity? If you see people from developed economies giving prescriptions to developing economies, there is a conflict.

IMF is doing it because the Nigerian government is a debtor nation, and they are forcing Nigeria to swallow that pill that would make them to die and not revive.

Countries all over the world used state resources to build power plants, generate electricity until they reached the level of self-sufficiency.

IMF prescriptions always create problems for Third World countries. There is no country that has taken IMF prescription and got better.

Now you can see where our currency is today. The IMF is giving them indices to calculate their tariffs. Part of the indices they are using to give Nigeria high electricity tariffs is based on price of gas. Price of gas is being measured in dollars.

Secondly, they are increasing it based on the value of the currency. Also, they are using inflation as a source. Whenever there is inflation in Nigeria, the model the NERC is serving, is that they would increase tariff.

Now let me tell you this, if you increase tariff today, next month you will have inflation.  They are the people instigating inflation.

They don’t consult Nigerians when increasing tariffs; the customer is no longer King. You ask me why the labour union should oppose this. I pay more than N30,000 monthly and then the minimum wage is N30,000. And you expect somebody to survive under it and the bag of rice is almost N30,000. That is the reason.

Subsidy discourages investment in the electricity industry. Is it not better to allow forces of demand and supply to determine how much companies pay for their products and services?

The system is not deregulated.  Before you talk about market forces of demand and supply, it is a restricted supply, but demand is everywhere. A place you can even look at is the place like Gurugu Jos. You will see NASCO operating side by side with NEPA line, the people there can decide to follow NASCO. You ask what is happening in that area. By the time you have two or three operators in a place, people can make a choice. In this regard, we are concerned with that same product of maybe Eko Electric or Ikeja Electric.

If you ask anywhere that there is a scarcity or commodities are hoarded, it gives birth to unfair prices and manipulation.

So, this is what one we are talking about now. If you allow demand and supply, if you come to an area like Lagoss, only Ikeja GRA, Ikoyi, and some part of Lekki can take all the supply coming to Lagos. So, you must balance the issue of profit maximisation with component of social services.

TCN is still owned by the government and the transmission capacity is very low. When do you think the government should allow private sector operators to buy and operate this asset?

Those advocating for the sale of Transmission services are the greatest enemies of the country. No country sells its own transmission company. Anyone operating the Transmission Company of Nigeria can sink this country. It is a security issue.

The problem we are having in this country is not the problem of evacuation. Even with the 4,000 megawatts being generated, the distribution companies sold eight years ago are still rejecting load.

If you ask them to take 400 megawatts, they will say no, we are going to take 200. It means they are denying some people another 200 which could have gone round. I am giving this analysis based on economic consideration in the market dynamics.

Some of them cannot take that 400 megawatts, because their system would go out based on fault. Some have distribution networks that are weak. Immediately, it takes the 400 megawatts, you would hear transformers exploding on overload.

Since after privatisation, how many of them have bought new transformers. The Transmission Company of Nigeria can transport 8000 megawatts. That is not our problem.

Nigeria sells power to neighbouring countries. What is the thinking of your union on this especially when Nigerians don’t have enough power?

Some are social obligations, apart from whether they are making money or not. There are one or two countries, either from Niger, that if you don’t give them supply and they decide to construct their own dam, the water that is coming for us to run our hydropower system would not be there. It is both economic and social; if they build their own dam, our source of water supply would not be there. So it is like being under obligation.

How do you assess the government plan to raise the country’s power generation capacity?

There is no plan that I know of; do you just plan on the air? What is this year’s budget? Can it build one power station? How do we talk of a plan without any concrete policy or thing on ground?

When anybody is telling you 25 gigawatts or whatever, and they have handed over to the parasitic private sector; let them come out and tell us the plan to improve 5000 megawatts.

Even with the Siemens contract of 7000 megawatts, we have reached that level. Which new power plants have they constructed? What is the cost of gas? Are they supposed to depend on gas alone as the only source? There should be an energy mix to make an impact. Ask the Minister of Power the short term, middle term and long term plan of electricity? What is the roadmap to making them successful?

Collapse of national grid is a regular occurrence. What can be done to make this history in the country?

When you have a country with such a large landmass, a country with a single national grid, interconnected; when there is a problem with one area, it is bound to affect the other area.  Such issues as grid collapse is a normal occurrence. If we can decide to split the grid, to some other units that are controllable, we can still do it. Some of the grids collapse when there is no power, if generation goes down, you have a grid collapse. When you don’t have enough to keep the grid running, the grid collapses.

We are having grid collapse because there is no enough power to keep the system running.    ,,


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