Outrage over FG’s N50bn grant to energy sector

By Olusesan Laoye

There is growing public outrage over the N50 billion the federal government still pays as subsidy to the energy sector which has already been privatised as Nigerians, the Labour Congress and energy experts have continued to kick against it, alleging that it could be another avenue for fraud.
They were asking what could have been the reason behind such a huge money still being devoted to privatized companies, which have not even shown justification for such gesture with the tax payers money.
It was argued that despite that Nigerians have not got value for their money, as the power sector still remained comatose, which still puts the entire country in darkness.
The arguments went further that by now which is nine (9) years down the line since the energy sector had gone to private hands, government ought to have stopped dishing out funds they described, as ‘father Christmas’ gesture while it was also believed that both the energy sector and the Federal government should be probed as the fund remains a subject of suspicion.
Since the Minister of Power Saleh Mamman made the disclosure that government still fund the power sector with N50billionas part of its 49 percent stake to ensure that energy was not taken away from the reach of the common man, Nigerians have been giving big knocks on the statement, which a Solar energy expert, Engineer Johnson Alabi, described as very annoying and a big insult to Nigerians. Even the Labour unions have not taken kindly to the Ministers pronouncement and wondered why the government is still subsidising companies already privatised.
Deputy President of the Nigeria Labour Congress (NLC) Joel Ajaero argued that the minister’s argument that the money was still being spent to augment the shortfall by the distribution companies, despite admitting the failures of the Discos not being able to stabilise their operations to other players in the sector was not good enough and it was a slap on Nigerians.
It would be recalled that in 2013, Nigerian government privatised11 electricity distribution companies (Discos) and six generating companies (Gencos) but it retained 100% ownership of the Transmission Company of Nigeria (TCN), under the comprehensive power sector reform to stimulate growth.
The aim was to expand capacity, increase electricity access and upgrade transmission. As a matter of fact, Nigeria’s power generation is mostly Thermal and Hydro, which, according to records, has an installed capacity of about 12,522 MW.
With its advantage as the most populous nation in both Africa and especially in West Africa, Nigeria is ranked higher among the 14 West African countries to be a power pool for the Sub- region. This advantage gives Nigeria the capacity to supply electricity to the Republic of Benin, Togo, and Niger.
The argument therefore, is why the Minister of Power could talk of subsidy to Discos and supply to those neighbouring countries where electricity supply has been stable and reliable, when Nigerians are suffer despite the huge amount spent on power.
Although it was said that Nigeria would still need about $100billion in investment in the next 20 years out of which the World Bank is financing $486million from International Development Agency for the Nigeria Electricity Transmission Access Project (NETAP).
It was believed that with all these, the government should still not have been budgeting to finance power which has failed in private hands to improve the economy of the country.
Going by the records of the World Bank, which is one of the major financiers of Nigeria’s power and energy sectors, it shows that despite the huge amount of money so far spent on the sectors, less than 50% of Nigerians have access to electricity supply which is far from being reliable.
Apart from the World Bank initiative and financial commitments to the power sector, other private and international concerns, such as Siemens are interested to help the country have reliable power supply.
Siemens had also come into this plan to boost rapid economic development of Nigeria. It came under the deal known as the Presidential Initiative (PPI) which began in 2018 with the present All Progressive government led by President Muhammadu Buhari.
The deal as planned would include generating output, revamping of power distribution and transmission system that would promote local skill and sustainable technology.
As Mr. Jide Adetunji, a chartered Accountant said, Nigeria should have stopped investing on a failed project which has not helped industrial growth. The power sector he argued, due to inefficiency has crippled many businesses and a lot of investments.
He pointed out that as an auditor of firms and even private individuals and Manufacturers, “you will be amazed with the kind of losses around, caused by inadequate power supply.
He said that this has also contributed to hike in prices of products because producers of goods who have to spend more in the production of their goods have no choice but to hike the prices of their goods to meet the cost of production.
He said that rather than pampering the Discos and the Gencos, they should be sanctioned to sit up or take the business away from them and give to those who would satisfy and comply with the conditions laid down for their operations.
He also pointed out that the argument of the Minister that the subvention has reduced to half due to increase in the tariff regime, the half still drains the economy of Nigeria and was reason enough to do away with the sets of companies managing the power sector.
Also an expert in Solar Energy Engineer Johnson Alabi who was the former Deputy chairman of the Peoples Democratic Party (PDP) in Ondo State, who, while speaking to the Businesshallmark on the Ministers statement in a telephone chat, said that he was not talking as a politician but an expert in energy and weeps for Nigeria because “we have refused to tow the line of truth.”
He said he was baffled with the Minister’s argument that the Discos and Gencos are sold off and handled as family business making it difficult to be professionally managed, was bitter to hear.
“This is the problem with us here in Nigeria; why should the government retain those who believed that what belongs to the entire country and what the economy of the people depends on and the nation be handled like a family business and the Minister is even not sober about that and came out to tell Nigerians that.
“The present government is insulting Nigerians by still keeping the Discos and the Gencos. They ought to have been fired and what the Minister should come up with is to tell us why they have not sacked them.”
He said that as an expert in power and energy, especially Solar, he had made several representations to government on sustainable energy and distribution which are not followed.
He said that he was so concerned and met the former Minister in charge, Barrister Raji Fashola whom i explained to in details on how to go about it but since then things are getting worse”
Also admitting the inefficiency of those managing the power sector, the General Manager Finance and Management services of the Nigerian Electricity Regulatory Commission (NERC) Abdulkadir Shettima said that the problem with the Disco and Gencos has been that they are just not working in accordance to the contractual terms.
Engineer Alabi cautioned against the government securing another loan which the Special Adviser on infrastructure to President Buhari Ahmad Zakari said, would soon be obtained from the African Development Bank (ADB) after the $500million loan from the World Bank.
He said the government should show what it has spent the N1.3trillion on for power which he sold out for just N400billion.
:”I wonder why the subsidy would be more than the price it sold the power sector to the private hand. The government is subsidising inefficiency and investment that failed to yield result”.
“The Gencos and the Discos are collaborators and what baffled Nigerians is that despite the colossal amount of money of subsidy and palliatives to the companies, they are still in darkness and the only thing shown for it is 5,000 mega watts”, Engineer Alabi argued.