My attention has been drawn to comments by General Muhammadu Buhari’s aptly named Minister of Information, Lai Mohammed, to the effect that the recent 300% increase in power tariffs is the fault of the Jonathan administration.
Mr Mohammed’s exact words were as follows:
“Before we came in, the power sector had been privatised by the previous administration, but the people they sold to them are incompetent. When we assumed power, we met the mess. Apart from the fact that the Distribution Companies (Discos), could not meter the people, they also could not pay for the electricity generated by the Generation Companies (Gencos), from the Nigerian Bulk Electricity Trading Companies.”
Not only are these statements false, they also expose Lai Mohammed’s, and the Buhari administration’s, shallow understanding of the challenges faced by the power sector.
To prove that Lai Mohammed is a liar, I will now quote from an interview Mr Tunde Fashola, the Minister of Power, gave to Channels Television on Sunday, December 23, 2018. In that interview, Mr Fashola said:
“We are producing more power than what we met. We are transmitting more power than what we met. And we are distributing more power than what we met.”
Mr Fashola further said:
“I met 4,000MW. We have added 3,000MW more – 1,000MW per year. Our raw rate 1000MW every year.
Now, Nigerians would note that the Buhari administration has not built even one power station. The last power station ever initiated, started and completed, is the 750 MW Olorunsogo II Power Station in Ifo Local Government Area of Ogun State, built by the Jonathan administration, and commissioned by then President Goodluck Jonathan on Friday, February 20, 2015.
The reason Mr Fashola was able to boast about increased power GENERATION and DISTRIBUTION in 2018, is because the privatised Generating Companies have increased their capacity. If these were “incompetent” people, as Lai Mohammed claims, this would not be possible.
As you can see from the above, Lai Mohammed’s words clearly contradict Tunde Fashola’s words. Both statements cannot be true. One of them must be lying. And the liar is Lai Mohammed.
The truth of the matter is that the weak link in the power sector is not the privatised power generating and distributing company, but the Transmission Company of Nigeria (TCN), which has not been privatised, as it should have been, and which is still managed by the Buhari government.
No matter how much the generating and distribution companies increase their output, it will not make much difference if transmission is weak, and as long as transmission is weak, the unit cost of power will be expensive.
That is one aspect of the challenge. The other aspect has to do with the collapse of the Naira. Nigerians will recall that as at the time the power sector (less the transmission sub sector) was privatised between 2011-2013, the value of the Naira was stable at ₦119 to $1 (₦150 to $1 parallel market).
However, after 5 years of extreme mismanagement of the economy by the Buhari administration, the Naira has been devalued and was officially declared the fourth worst performing currency in the world.
Today, the Naira trades officially at ₦380 to $1 (₦465 to $1 parallel market).
Flowing from the above, the distribution and generation companies have occasioned huge losses, because they took huge dollar denominated loans to buy their assets and expand their generation capacity.
It is almost satanic for Lai Mohammed to now blame them. It is like a father beating a child and blaming him for crying. None of these private investors could have guessed that a nation which was the third fastest growing economy in the world by 2015, would become a basket case in so short a time. It is unprecedented in recent modern history.
Another challenge faced by the sector is that under the roadmap to power sector reforms, the government was meant to complete the privatisation of the power sector by selling off the transmission sub sector. However, the Buhari administration has failed to do so.
They have also failed to implement other aspects of the roadmap to power sector reforms, of which include the Power Purchase Agreement (PPA), the Gas Supply Agreement (GSA), the Gas Transportation Agreement (GTA) and the Grid connection agreement.
Rather than invest money in developing gas to power infrastructure, the Buhari administration showed extreme profligacy by budgeting $500 million to ‘digitalise’ the Nigerian Television Authority, a network that does not even have a market value of $50 million, proving that no matter how much money you give a man, it will never he enough if he does not know how to use money.
If the Buhari administration had fulfilled government’s obligations, the private sector would have invested in a new power grid, which would have made it easier to transmit power from the point of generation, to the point of use, with nothing more than a smart meter, which would have brought down the unit cost of power.
Finally, let me remind Nigerians that the Jonathan administration handed over power to the Buhari administration on May 29, 2015, and that if after five years, all that they have to offer is blames, blames and more blames, then perhaps they may want to admit to themselves that they lack capacity to govern.