Power Sector Corruption And The Nigerian Economy | Independent Newspapers Limited
Newsletter subscribe


Power Sector Corruption And The Nigerian Economy

Posted: Sep 18, 2015 at 12:20 am   /   by   /   comments (0)

In this report, last parts, Sola Alabadan, Apata Oyeniran, Bamidele Ogunwusi, Nkasiobi Oluikpe and Ikechi Nzeako, trace how corruption in the power sector has succeeded in grounding the nation’s economy, especially, the real sector of the economy.

Failure of Ministers in Revamping the Power Sector                                                                                                  

The Fourth Republic, so far witnessed one of the highest turnover of Power Ministers. This could be attributed to the high expectations from Nigerians from the ministry, and the fact that by the time the dispensation took effect, the power failure has become overwhelmingly unbearable. Hence, every slightest cabinet reshuffle always sees the incumbent Power Minister shown the way out, all in attempt to inject new blood and new ideas, to tackle the behemoth that appears to have confounded the nation. That these ministers have been reshuffled out of the cabinet does not imply that each one of them in their respective ways and capacities didn’t make attempts to solve the problems. But their attempts were not good enough to take Nigeria out of the doldrum of darkness that has become its lot.

Bola Ige (1999 to 2000)

When Ige took up the mantle of the power and steel ministry in 1999, probably he didn’t understand the magnitude of problems that were about to rest on his shoulders. consequently, he promised that within six months of his appointment, ‘power failure will be a thing of the past’ and that on a regular basis, he will brief the nation on the state of power, steel and aluminum.

He said he was going to cut down incidents of wanton power failures by 50 per cent in six month, by 75 per cent in 12 months and by almost 100 per cent in 24 months. “No excuse will be accepted or acceptable. Meet target or be fired,” he stated at a press conference.

After apologising to all Nigerians on behalf of the National Electric Power Authority (NEPA), the Ministry of Power and Steel and the Federal Government of Nigeria, he was noted as saying that even though NEPA has installed capacity to generate enough power in excess of its national peak demand, the entire power delivery system has been characterized by epileptic and unreliable supply, bogus billing and archaic rate collection, all of these, he stressed, ‘he was going to put to an end’.

Ige also promised to re-institutionalise management business controls, performance evaluation and accountability in the ministry. “The mission of this ministry will be to provide regular power supply throughout the federation at affordable price …It is no longer business as usual. These goals shall be pursued relentlessly and with all seriousness.”

He made a lot of bogus and lofty promises that made some Nigerians to conclude, that at last, ‘a Daniel has come to judgment’.

But after six months and no significant improvement in the ministry, he confessed to a friend that he was totally misled and now (that is, then) understood that it will require nothing less than five years to solve the problem – That is, ‘if at all it is solved’. His son was later to grant an interview after his demise, that people who were benefitting from the use of generators sabotaged his father’s plans for the ministry. He was in office from May 29, 1999 until his appointment as Minister of Justice on January 3, 2000.

Olusegun Agagu (2000 to 2002)

Though his short tenure as the Minister of Power was characterized by various financial scandals, Agagu was said to have generated more power, at least more than his predecessor. Power generation increased from 1425 megawatts in 2000 when he took over to more than 4000 megawatts and with a complementary reinforcement of the transmission and distribution systems by the time he left in 2002.  Not only that, the foundation for the present privatization of the sector and unbundling of the Power Holding Company of Nigeria (PHCN) into different generation, distribution and transmission, was also laid during his tenure. He resigned in 2002 to contest the Ondo governorship election.

Liyel Imoke (2003 to 2007)

The former chairman of the Technical Committee on the National Electric Power Authority (NEPA) was appointed Minister of Power and Steel in July, 2003.

Records have it that he presided over the implementation of the power sector reform, including the management of the passage of the Electric Power Sector Reform Bill in 2005, which resulted in the promulgation of the Nigerian Power Sector Reform Act of 2005, and consequentially, led to the establishment of the Nigerian Energy Regulatory Commission (NERC), the Rural Electrification Agency (REA) and the unbundling of NEPA.

Also under Imoke’s leadership, the Ministry devised, and began the implementation of a 25-year national energy development plan, embarking on the largest power programme in the world at the time – the National Integrated Power Project (NIPP).

The federal government then budgeted a whopping N16 billion for the various reforms, which many described as having gone down the drains as it failed to generate the needed amount of electricity or meet the set goals. He was reported to have personally collected the sum of $7.8 million for the execution of the contract for the construction of the Jos-Yola Transmission Line, which was never executed.

Rilwan Lanre Babalola (2008 to 2010)

When Babalola took over the affairs in the Ministry of Power, he met 3,700MW on ground and he promised to increase it to 6,000MW and a 24 hours power supply by the end of 2009.

Nevertheless, some are trying to partially absolve him of blame, as he is said to have been appointed minister when the sector was faced with severe lack of power generation and transmission facilities, as well as tangled regulations with a highly ambitious programme to expand the capacity.

Six months after assuring Nigerians of making a significant impact in the sector, in September 2009, the 3,700MW capacity he met on ground dropped to 2,710MW. The shortfall, he attributed to inadequate supply of gas to the new generators. Babalola holds a PhD in Energy Economics. His appointment was perceived by some Nigerians a round peg in a round hole. But by the time he left the position in March 2010 after a cabinet reshuffle, not only were most people disappointed, the then President Goodluck Jonathan, also disappointed, personally took over responsibility for the Ministry of Power, personally ordering the implementation of the power sector reform.

Barth Nnaji (2011 to 2012)

In July 2011, when Jonathan once again deemed it fit to appoint a Minister for the power and steel ministry, the mantle fell on Barth Nnaji. He was the founder of the first indigenous power generating company in Nigeria and a former minister for science and technology.

In fairness to Nnaji, he set out to revamp the sector. He succeeded in convincing world’s leading engineering firms such as Siemens of Germany, Hundai Heavy Industries of South Korea and Electrobras of Brazil to come and invest heavily in Nigeria’s power sector as authentic stakeholders, instead of mere contractors and equipment suppliers.

Siemens in collaboration with the National Power Training Institute (NAPTIN) and Northern Nigeria’s universities, set out to develop a solar energy system in the country. This is in addition to accepting to build its first workshop in Africa in Nigeria.

One of his greatest but truncated achievements was the 141megawatts Integrated Aba Power Project built with equipment from General Electric (GE), which was a result of the visit of the then President of the World Bank, Jim Wolfensohn and the Finance Minister to the commercial city.

Beyond building the 141MW power plant and rehabilitating the entire distribution network in Aba, he and his team also built over 105km of 33kV overhead lines with tubular poles within Aba metropolis and completed the construction of five new substations consisting of the power plant’s 2 x 15MVAs substations in various parts of Aba town.

Well over N100 billion was invested into this project. They were at the last phase of the project when, in spite of the valid concession agreement, Enugu Electricity Distribution Company was handed over to another party by the Bureau of Public Enterprises (BPE).

The greatest undoing of the professor of Robotic Engineering was deliberately flouting the Code of Ethics of the privatization process which bars staff of the Bureau of Public Entreprises (BPE) and members of the National Council on Privatisation (NCP) from buying shares in companies being privatized, even though, he was reported to have personally informed Jonathan ahead of time.

Every Nigerian would attest to the significant improvement in power supply during his short stay in the ministry.

When Nnaji resigned on August 28, 2012, erstwhile governor of Lagos State, Asiwaju Bola Tinubu was once quoted as saying: “With the exit of the only performing minister in President Goodluck Jonathan’s government, the ruling Peoples Democratic Party (PDP) is finished, and can never come back to office.” The London Economist in its September 8, 2012 edition described his exit as the “extinguishing of a bright light in Nigeria.”

Chinedu Nebo (February 2013 to 2015)

The former vice chancellor of the University of Nigeria, Nsukka (UNN) and pioneer vice chancellor, Federal University, Oye, Ekiti was appointed Minister of Power and Steel in February 2013.

Hopes were high for the reputable engineer and scholar with a tract record in the academia to replicate his feat at the academia in the power sector with his appointment.

Nebo will be most remembered for handing over the assets of the PHCN to private investors on November 1, 2013, even though the exercise has been badly criticized by the Labour Union.

Inadequate financial capacities of the new investors did not help matters, as according to Labour, “This year alone, they have given the so called private sector over N200   billion. So, why fund them if you say the electricity is in the hands of the private sector? Why would you sell your house to somebody and you still give him money to maintain it? So, it’s a fraud.”

During his tenure, there was frequent collapse of the transmission network that he personally had to inaugurate a 13-member committee to investigate the matter. The committee came up with a report that the current transmission network was designed to carry 3,000MW to 3,500MW. So each time this load is exceeded, the system collapses. His tenure was also characterized by pipeline vandalism which disrupted power supply, especially in 2014.

What Nigerians are saying

As can be seen above, the various policies, acts and reforms, have not translated into efficient power supply to the country. The average Nigeria is breathing under the heavy yoke of power outage, which has only succeeded in crippling their economic lives.

Mostly affect by the scenario, are the one man business who are struggling to survive, buying and fueling their own generators. Under normal circumstances, most private micro businesses are struggling to survive. But coming to include the cost of generator repairs and fueling into the cost of production, does not help matters.

The resultant effect is that most businesses have gone underground; even the spirit of intending SMEs are dampened, because of the harsh environment, this has also contributed to an increasing number of dependents in the family. Crime is on the rise, as even people who attempted acquiring vocational skills cannot put to practice what they have learnt.

Daily Independent spoke to some SMEs on the impact of the failure of the power sector and the responses were really touching.

Brother Dan, an electrician at Ifako-Ijaiye narrated the ordeal he faces as a result of the failed power sector by saying that if the system had been efficient, where he is now wouldn’t have been where he would have been. As an electrician he narrates that most of his job are outside his shop.

Hear him: “Most customers do not accept that you come to carry out any electrical repairs in their houses when there is no light. Remember as is the practice, you must have to test whatever you have repaired to truly prove that it has been repaired without which you will not be able to get paid. And most of the appliances are such that you cannot use portable generators on. You then discover that you can be waiting for days and sometimes weeks for PHCN to supply light.

“There are times when the light will just be flashed and you begin to run down to work, only for you to get there and discover they have taken it again. Then you return back as the customer might not want you to sit down in their house waiting for light to come. Even the petty-petty repairs like iron and some other small appliances that can fetch you some little cash, you still need to test it before handing it over to its owner. And if you try to test iron with this small Chinko generators, you may end up destroying it for life. It got to a point that after just sitting idle for days in the shop, I decided to sit at home once in a while, since it doesn’t really make any difference.

Asked what he feels should be done to those who in one way or the other have crippled the power sector, Brother Dan said, they should be handed over to God, as he is the ultimate judge. One thing he said he believes in is that there is nobody who has inflicted any hardship on innocent souls that will go unpunished.

But Iya Ifeoma, a retail shop owner on Iju Road would rather prefer shooting at gunpoint for whoever has caused such undue poverty and hardship to Nigerians.

She said: “You know I record the highest sales in the evenings when people are coming back from their places of work and some are already at home. Nobody will enter any shop that is dark at night. If there is no light you will not make any sales at night, because of that, you won’t believe I have three generators.

In the event one breaks down, there will always be a substitute, so that at every material time when there is no light in the evenings, my shop will always be lit for people to see what they are buying and for accurate change to be given out. Do you know that if I have had only one generator and it breaks down, if the light goes off at night, I will be forced to close immediately? This is not fair to Nigerians, and we are paying heavy bills for darkness.”

Mrs. Jumoke Olugbenga, a new mother says that each time the light goes off and they don’t have enough fuel in the generator, her heart skips as her baby does not sleep without the fan or air conditioner on.

“My baby will cry all through the night forcing me to also keep awake. Sometimes, I will have to go and bathe her sometimes twice before dawn. The only saving grace is that we are not in the early part of the year when the heat is at its peak, honestly, I don’t know how I would have been able to manage the situation.”

Notwithstanding, she says, she is not in a position to say what should be done to the culprits of the wickedness that has characterized the sector.