Stakeholders set agenda for new power minister

Oredola Adeola

With the recent sack of the former Minister of Power, Mamman Sale, and immediate redeployment of the former Minister of State for Works, Abubakar Aliyu, as substantive Minister of Power, by President Muhammadu Buhari; stakeholders in the energy industry have suggested tasks that the new helmsman must focus on, if the current efforts to reposition the sector through the administration’s Power Sector Recovery Programme (PSRP) is to be achieved before 2023, when the current administration’s mandate will end.

The Nigerian electricity challenge has always been at the heart of the discourse on the economy, especially as this has adversely affected the fortunes of households, the industrial and manufacturing sector.

Since the country’s return to democracy in 1999, successive administrations have made promises to tackle some of the fundamental problems bedevilling the sector including addressing infrastructural issues limiting upgrade of peak national grid from 5000MW (presently) to 20,000MW, to no avail.

Information obtained by EnergyDay from Power System Operator, reveals that Nigeria has 13,400MW of installed power generation capacity of which 8,000MW is mechanically available. The data shows that the country achieved all-time peak generation of 5,801.60MW in March 1, 2021, while struggling to transmit less than 4,000 MW average in the past two years due to persistent challenge around generation, transmission and distribution.

The Buhari administration had during the electioneering campaign in 2014, promised to expand electricity generation and distribution to supply 40,000MW in eight years, and to make power available to drive the economy. To redeem the electoral promise, the immediate Minister of Power, Engr. Sale Mamman, and his predecessor, Babatunde Fashola, had made efforts to use the administration flagship Nigerian Power Sector Recovery Programme (NPSRP)- 2017 – 2021’- to improve the financial capacity of NBET and the viability of the distribution companies in the country.

That initiative, if it had been well implemented would have restored the financial viability of the power sector, improve transparency and service delivery and reset the Nigerian Electricity Supply Industry for future growth, but nothing much can be said about this laudable initiative under the supervision of the two Ministers.

A review of Sale’s efforts

The former Minister Sale Mamman, who was appointed in 2019, after the Ministry of Power was separated from the Works and Housing Ministry supervised by Fashola, upon assumption of office promised to implement the Government’s power policy focusing on direct willing buyer – willing seller arrangements, implement the Siemens Grid and Distribution Enhancement Project; increase distribution and transmission capacity to 11,000 MW by 2023; increase generation capacity by at least 1,000 MW annually by ensuring the completion of ongoing power generation projects; complete energizing Education Programme to reach 37 Universities and seven teaching hospitals; complete the energizing economies programme to reach at least 500,000 MSMEs, among other policies of the administration.

While some of these programmes were partially implemented before he was sacked, some of the issues that characterized his administration were frequent tariff increases that pitched the Buhari’s administration against Nigerians and the organized labour; frequent grid collapses, poor implementation of the National Mass Metering Programme (NNMP) of the administration and the recent controversy around the Eligible Customers Regulations, amongst other policy and administrative issues.

A major policy miss, was his inability to achieve Siemens’ plan to rebuild the decrepit power infrastructure being a virile step towards fixing the electricity issue.

Stakeholders say that the Siemen project, if well implemented would have improved the generation capacity of the power sector from 7,000 MW and 11,000 MW, thereby positioning the country to achieving the long term target of 25,000 megawatts.

Analyst views

Stakeholders and experts in the energy sector shared the view that the Nigeria power sector has enough capacity to turn around the fortunes of the country if concerted efforts are put into the implementation of the various policies of the government.

According to Mr. Muda Yusuf, an Economist and former Director General of the Lagos Chamber of Commerce and Industry (LCCI), “The power sector reform objectives are yet to be significantly realized even after the appointment and replacement of two Power Ministers under the present administration.

He added that with the appointment of the new Minister, there are issues in all aspects of the power supply chain that needed to be urgently addressed before the tenure of the current government comes to an end.

He said, “These are the gas producers, the generating companies, the transmission company and the distribution companies. There are also complex legal issues impeding the achievement of desired outcomes.

“Boundaries are also not clearly defined. There have been instances where the National Assembly and the judiciary have interfered on tariff issues, for instance.

“The issues are multidimensional. Some of the challenges are consequences of internal weaknesses within the Power Ministry. But there are whole lot of factors that are beyond the Ministry.

He warned Nigerians to be cautious in the way blames are apportioned to the ministers and the present administration, especially on matters of power sector performance and reform.

He charged the new Minister to work with all the major players in NESI to ensure that a robust customer protection framework is instituted, especially in a market structure which, according to him, is monopolistic in nature.

He said, “The Nigeria electricity market is not yet a competitive market, rather it is monopolistic in nature. The risk of consumer exploitation is much higher in such market conditions, and this is why a comprehensive consumer protection framework is necessary.

“Over the years, especially since the power sector reform, there have been widespread complaints by electricity consumers about estimated billing, metering issues, outrageous bills, power surges and damage to electric appliances, corruption and many more.

“Most often, these inappropriate behaviours happen with impunity and wanton disregard for the rights of electricity consumers. The mechanisms for seeking redress have not been fully effective. The awareness about redress mechanisms is extremely low and the processes are cumbersome and bureaucratic. The beauty of justice delivery lies in the speed and promptness.”

Dr Godwin Orovwiroro, an energy consultant who was former Head Customer Services, Port Harcourt Electricity Distribution Company (PHEDC), disclosed that not much was achieved by former minister, Engr. Saleh, within the industry’s value chain, especially on the upstream. According to him, the generation sector under him was averaging about 4000 MW.

He said, “And if you situate this within the context of a target that the Buhari government set for itself, you would find out that the progress has been abysmal. For instance, when the contract for the strengthening of the power infrastructure was signed with Siemens, the deliverable was that by 2021, where Nigeria was expected to be able to doing around 7000MW; by 2023 – 11,000 megawatts; and ultimately to 25,000MW. But as at now, average generated power being sent out to electricity consumers is still within 4,000MW, sometimes below. It hovers between 3,000 to 5,000 megawatts.

“But when you look behind at the history of the power sector in Nigeria, we have been within the 3,400MW bandwidth for close to twenty years. That shows that in terms of important progress, we have not recorded anything significance in terms of power generation.

“The transmission capacity has been experiencing grid collapses intermittently. TCN’s data shows that, between 2013 to date, the grid has collapsed for 132 times, both totally and partially. That’s about 18 grid collapses per year on the average. That is a very poor industry rating.

“It means that the ability of the grid to withstand stress is too low. It cannot stand the industrialization we all aspired that the grid would provide for Nigerian. For a lot of industries, whenever the grid collapses, it amounts to a level of economic waste for them. What that means is that there is a high level of unreliability with the power that is coming from the grid.

“The DisCos performance at the downstream sector is also not impressive. The government’s national mass metering target of April 30, 2020, was also missed.

“Several agencies under the supervision of Engr. Sale Mamman, including NBET, REA and TCN had one administrative issue or the other. These companies were engrossed in one managerial crisis. The then Minster had running battles with those at NBET which finally led to the exit of Dr. Marilyn Amobi. He also had to remove the MD of the REA and Usman Muhammad who was at the helm of affairs at the TCN.

“This created a lot of tension within the institutions which are supposed to be the organs of his ministry. It didn’t create a leeway for an enabling environment, for the achievement of programs.

“So, by and large, the power sector under Engr. Salleh was on downward trend as far as all the indices of development in the power sector were concerned. To the extent that the World Bank came up with a report in 20 21, and stated that 74% of electricity consumers in Nigeria are dissatisfied with the level of energy supply, 78% of them still gets below 12 hours of power supply per day.

“All these had cumulative effects of his leadership. We expected him to inspire a lot of activities within the sector, we wanted to see progress, we wanted to see members of the value chain offering services to customers. But what we saw at the end of the day was that he was more obsessed with increasing tariff without minding the plight of the masses.

“He failed to come up with a good vision of service delivery. So, people kept reacting each time the issue of tariff increase came up.”

Dr. Godwin called on the new minister to set a vision for the sector, adding that his industry pronouncement will determine the achievability of the power sector reform of the present administration. He challenged him to put mechanism in place to drive the sector. Stakeholders would like to know his policy focus beyond the talks.

“By and large, he needs to focus on strengthening the grid. The TCN should be able to assure the nation that these frequent collapses can be addressed once and for all.

“He needs to review factors that are hampering generation, transmission and distribution of more than 4,000 megawatts at a time? What are the bottlenecks in the generation sector? How do we incentivize the GenCos to increase capacity?

“Like the former minster, Babatunde Fashola, Engr. Aliyu needs to interact well with all the players within the value-chain. He needs to regularly hold stakeholders’ meetings with key stakeholders. Mechanism should be put in place to accommodate the thoughts of the average consumers of electricity and those in the manufacturing sector to understand the challenges.

“Electricity is a major input to production process in the economy. Once the issue with electricity is addressed, those who are engaging in productive activities could venture into more critical areas of the economy, which could have impact on job creation, purchasing power, with a multiplier effect on the economy,” Dr. Godwin said.

He however charged the new Minister to drive economic activity and make people more productive with improvement in national grid? He also urged him to focus on achievable and sustainable programmes that would put the President Buhari’s administration on the good record of the people even as the tenure winds down in 2023.

He said, “President Buhari has informed us that he doesn’t want to leave office as a failure. So, there is so much for him to actually achieve and electricity is a sector that affects most Nigerians. The Government legacy would be measured on its ability to provide electricity to Nigeria.”

He called on President Buhari to declare a state of emergency in the power sector by supporting the new Minister adding that that is the only way to win the confidence of Nigerians, reduce restiveness from the organized labour, political agitations across the country.

Mr. Adetayo Adegbemle, Executive Director, Power Up, an Electricity Consumer Right Non-Governmental Organization, said, “the statement from Presidency on the redeployment of the new minister, makes it look like the new minister was appointed in an “Acting Position”. So, I’m not expecting him to stay long.

“However, the truth is whoever is put in that position has his work cut out for him (or her). There’s an urgent need for policy direction for the power sector, there’s also a need for the FG to start seeing results from their investment in the sector.

“Setting policy direction also means that sanctions should be enforced duly, especially with the sector being perceived to be hijacked. The Siemens deal for instance need to be reviewed and championed by the Ministry, the long overdue Review of the Privatized Sector is also on the front burner.

“Most especially, there’s no limit to knowledge, so the new Minister need to reach further afield for advice on policy direction for the Power Sector. No doubt, the challenges in the power sector is daunting, the solution is also in there, but it starts with a leadership that ensures all ships are sailing in the same direction.

“The Power Sector lost serious steam and direction under Engr. Sale Mamman with two years period, and it is rather unfortunate. It was during his time at helms of affairs of the power ministry that we saw the presidency reaching a deal with the German government (Siemen’s deal) without ownership or involvement of the Power Ministry.”

He therefore urged Engr. Aliyu to reintroduce the monthly and quarterly meetings with stakeholders in the industry, adding that follow up with critical industry players will do well for the sector. He further charged him to provide the necessary leadership for the sector.