Emmanuel Onwubiko: Nigeria money guzzling power sector

  In early May, I travelled to Owerri, Imo State and traversed over five local government councils and finally spent few days in Aronziuogu ...


In early May, I travelled to Owerri, Imo State and traversed over five local government councils and finally spent few days in Aronziuogu before heading right back to Orlu Senatorial Zone.
Mind you, from Owerri to Arondizuogu and back to Orlu town, translates to traversing the three Senatorial zones of Owerri, Orlu and Okigwe in Imo State.
Cumulatively, my journey lasted a little over a week.

However, I got a trailer load of lamentation from the dozens of persons I had interactions within the three Senatorial Zones covering all of Imo State.

The principal complaints of most of these persons I had comprehensive conversations with was on the critical absence or lack of electricity power from the National grid in over 75 percent areas of Imo State. I built a family house in Owerri but since nearly a decade, each time I travel home to Owerri, I do not enjoy electricity power from the National grid even as I pay each month of the year since my area has no rechargeable meter. So, combining my personal ordeals for a decade with the conversations I had with many of the persons I met during my last journey, the problems have become even much more complicated.

I came out with the idea that small and medium sized business outfits are folding up rapidly due to lack of affordable electricity to power their business ventures. The continuous shut down of these small scale businesses imply one thing- unemployment.
These enterprises that are forced to wind down are mostly run by young people who are University graduates and school leavers who are now made redundant due to power failures.

I saw it myself. But the electricity power issue in Imo State is not much different than in Kafanchan in Kaduna State and much of the Federal Capital Territory. I have sufficient personal knowledge of these places.

In both my office environment and my place of residence spanning so much distances but all within the metropolitan area of Abuja, the crisis of electricity power has become of disturbing dimension resulting in the use of generators to power both the home and office.

I am certainly not alone. I am told by some persons who came to my office that some of them have spent greater part of this year staying in darkness but the bills for electricity has really not gone down especially for the thousands of Abuja residents that are yet to be connected to the rechargeable meters.
In Kafanchan, around April I watched in the media as hundreds of the residents protested prolonged electricity power failures and till date there appears to be no improvement.

Amidst dwindling electricity power supply, there has been a heated debate on the reason the erratic electricity power issue may not abate soon. To certain characters working within the electricity power sector in both the private and public institutions, there is this plain illogical argument that the investors who buy and resell electricity power to the end users are asking for increment in the purchasing price of electricity as the only way to boost supply.

To millions of dissatisfied customers of electricity power in the Country, what matters to them is the frequency of supply and not necessarily the cost which the investors are lobbying the government to hike.

There is however something Sinister happening within the electricity power sector which has defied transparency and the principle of accountability. Coupled with the fact that the electricity power sector is one industry not too many observers have vast working knowledge about. It’s also a sector that is opaque and lacks everything to do with openness. The electricity power sector is organised in such a way that you would think the people in charge are members of a sophisticated organised criminal gangs.

The above sentiment has to do with the use to which the tons of money poured into the electricity sector is being utilized. Government officials are too quick to announce approval of credit facilities from international finance institutions but aren’t in any hurry to tell the citizens the progress of work done with these humongous amount of money even amidst dwindling electricity power supply situation all over Nigeria.
There is the believable suspicion that the electricity power sector is the most prolific Corruption ridden institution in government.

It is more or less like the more cash injected into the sector means the poorer the services rendered by the players in the electricity power industry becomes. It is a cash GUZZLING machine for politicians.

The most disastrous thing about this is that the bulk of the investments done by government are borrowed money that would be repaid and nearly all of the operators are said to be private investors. It is then a mystery how government has kept funding private businesses with borrowed cash that would be repaid by the same tax payers who still are exploited by the private suppliers of the erratic electricity power supply.

The question begging for answer therefore is, where are all these cash borrowed from a diversity of financing institutions around the World and then why has electricity supply remained so poor so much so that only an insignificant number of Nigerians get up to two hours of electricity power per day since the last six years? This government before assuming office had castigated the immediate past administration for corruption in the power sector but six years down the line, this government has the biggest thieves embedded in the electricity power sector.

World Bank recently was quoted as saying that about 90 million homes are without electricity in Nigeria.
The immediate consequences as highlighted earlier is the shut down of businesses and for those who chose to use generators, the cost of fuel which is extremely high, means that the cost of production would multiply and then passed on to the poor Nigerians who are not less than 100 million households.
British Broadcasting Corporation in 2015 reported that Nigeria is being crippled by the fuel shortage that the country has been experiencing for more than a month.

It reported then that Nigerian banks have shortened opening times, flights have been cancelled and phone companies may restrict services.

The BBC quoted the party of President-elect then Muhammadu Buhari as accusing the then the outgoing government of “sabotage” for failing to deal with the crisis.
The wholesale fuel sellers have been withholding petrol as they say they are owed $1bn (£625m) by the government.

The Guarantee Trust Bank says its branches will close at 12:00 GMT as it struggles to get fuel for its generators.
The shortening of its opening times is the latest sign of the impact of the fuel shortage.

Most Nigerian businesses and homes rely on diesel-powered generators because of the poor electricity infrastructure.

The shortage means that Africa’s biggest economy is slowly grinding to halt, says the BBC’s Will Ross in Lagos.
Three of the country’s mobile phone companies, MTN, Airtel and Etisalat, have warned that the fuel scarcity could affect their services as they were finding it difficult to supply diesel to the base stations.

Traffic on the roads is also reducing as many fuel stations have stopped selling petrol and there are long queues at places where they are selling petrol, our correspondent says.

Many domestic flights have been cancelled and some international flights are having to land in neighbouring countries to refuel.
Radio stations are also restricting their broadcasts and some have gone off air altogether.

It appears the fuel importers and marketers who operate a multi-billion dollar scam are blackmailing the government into agreeing to one more massive payout as they are not sure how much longer the fuel subsidy racket will go on.
They are literally shutting down the nation saying they are owed $1bn in arrears, but no-one gets to see how that figure is worked out. Many government officials, including employees of the state fuel company, are so intertwined in the fraud it is hard to know who is scamming who.

One thing is clear. Nigerians across the country trying earn a living to feed their families are facing a new level of hardship.

The incoming president is inheriting one hell of a mess.

At the heart of the shortage is a row over the payment to wholesalers of the difference between the subsidised pump price and the international market price.
The wholesalers are waiting for a $1bn payout from the government before they release more fuel.

It is thought that President-elect Buhari, who takes power on Friday, may move to end the petrol subsidy and so the wholesalers are trying to get something from the outgoing administration., so BBC reported then.

The BBC reported then that opposition All Progressives Congress (APC) thinks government inaction is deliberate so that Mr Buhari will take over a “nation in deep crisis”.

Then APC spokesman Alhaji Lai Mohammed said in a statement that the “departing office holder [was] defecating on the chair he is vacating”.

The People’s Democratic Party of outgoing President Goodluck Jonathan says that it is the opposition which is behind the crisis “to create an impression that the APC is inheriting… a complete system breakdown”.
The fuel subsidy has become an enormous scam, our correspondent says.
The wholesalers often pretend to bring in a lot more oil than they do and pocket the money they get for the petrol that is not delivered. But wait for it, what is the situation six years after Muhammadu Buhari took office?

Six years down the line, with humongous Cash borrowed and reportedly injected into the electricity power sector, Nigeria’s energy poverty has worsened and nose dived.
Where are the borrowed cash?
On September, 2019 the Vice President Yemi Osinbajo said the federal government has pumped about N1.5 trillion in intervention fund into Nigeria’s power sector in the last two years.
Mr Osinbanjo said this at a power sector roundtable hosted by Mainstream Energy Solutions Limited (MESL) at its Kainji Hydropower Plant in Niger State on Tuesday,
The MESL meeting was tagged, ‘Next Level for the Nigerian Power Sector – Unlocking Real Liquidity,’ Daily Trust reported.
The Vice President who was represented by the Minister of Power, Sale Mamman, said “the Federal Executive Council (FEC) approved the third round of intervention funding for the sector, with a total of about N1.5 trillion in the last two years.
“However, if the country is to achieve its aim of channelling funding to other critical sectors, it is pertinent that structural reforms be put in place to enable the power sector fund itself sustainably,” Mr. Osinbajo said.
The Central Bank of Nigeria in May announced the disbursement of N120.2bn to different electricity distribution companies (DISCOs), power generating companies (GENCOs), service providers and gas companies, in order to address the liquidity and funding challenges facing the sector.
Also in response to challenges in the power sector, especially in the generation sector, PREMIUM TIMES reported in September, how the World Bank announced it is in talks with the Nigerian government for a $2.5 billion loan to resolve the problems of the country’s power sector.
The Bank in 2018 approved an estimated $486 million to improve and upgrade electricity transmission’s network of infrastructure and rehabilitate substations and lines in Nigeria.
On March 14th 2021 the Muhammadu Buhari’s administration said the Federal Government of Nigeria plans to spend $3 billion on the energy sector in the next 24 months and end the current electricity subsidies by December 2021.
The spending is expected to increase the power being wheeled by the Transmission Company of Nigeria (TCN) from the current 4,900MW to at least 7,000MW.
Speaking during a webinar hosted by the Abuja Chamber of Commerce and Industry (ACCI), Special Adviser to President Muhammadu Buhari on Infrastructure, Ahmad Zakari, said that following the $500 million loans the government secured from the World Bank earlier this year, it is expecting another facility from the African Development Bank (AfDB), saying that the gestures are a demonstration of confidence in the reforms being currently made in the sector.
On 6 October 2020 www.brettonwoodproject.org reported that as Nigeria enters a deepening economic recession following a 6.1 per cent contraction in the second quarter of 2020, a $750 million World Bank Group (WBG) Program for Results (P4R) loan for the power sector approved in June has resulted in increased electricity rates.
The Power Sector Recovery Operation seeks to reform Nigeria’s power sector, including by establishing “sustainable and appropriate electricity tariffs.” Although it incorporates limited measures to mitigate the impact on the poorest consumers, including capping rates for unmetered customers and maintaining an affordable tariff for those consuming less than 50kWh of energy per month, according to Nigerian news site Nairametrics, the new tariffs mean “most Nigerians will now have to pay more for electricity.”

As noted in a 2019 report by UN Women and the International Labour Organization, “Higher energy prices… tend to slow down economic activity and thus generate unemployment. The sudden removal of fuel subsidies and consequent increases in prices have sparked protests and violent riots in many countries.”

Around February 2021, the World Bank approved a $500 million loan to improve access to electricity in Nigeria and expand the metered network of power distributors.
The money the bank says will help distribution companies “make necessary investments to rehabilitate networks, install electric meters for more accurate customer billing and to improve quality of service for those already connected to the grid,” the Washington-based lender said in emailed statement Friday.
To qualify for funds, private distribution companies must meet various criteria including connection targets, financial management and network expansion, the lender said.
The loan follows the World Bank’s backing last year of a $750 million project to boost the energy sector of Africa’s biggest economy.

Nigeria lost about $26.2 billion as a result of unstable power supplies and 43% of the country’s 200 million people aren’t connected to the grid, the World Bank said. Can we justify this poor electricity power situation vis-a-vis these humongous amount of borrowed money most likely mismanaged by government officials under the guise of investment into improving electricity power infrastructures?
Can this government please tell us where these huge sums of money are because as far as electricity power supply is concerned, we are worst off than we were prior to 2015.

*EMMANUEL ONWUBIKO is head of the HUMAN RIGHTS WRITERS ASSOCIATION OF NIGERIA (HURIWA) and was a federal commissioner at the National Human Rights Commission of Nigeria.



BBNaija,2118,Business,2732,CampusGist,1035,Celeb,4898,celebrities,240,Comedy,8,CONFESSION,11,Education,2415,Entertainment,5892,Fashion,367,Featured,626,Gist,2037,Health,721,Job,3,Lifestyle,873,Music,153,MY STORY,37,News,83035,Opinion,847,Poem,10,Politics,13481,Relationship,210,Sponsored Contents,31,Sports,17257,Style & Travel,47,Success Stories,265,Technology,342,Video,114,
Saga Gist - Top Source for Nigeria News: Emmanuel Onwubiko: Nigeria money guzzling power sector
Emmanuel Onwubiko: Nigeria money guzzling power sector
Saga Gist - Top Source for Nigeria News
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content