July 23, 2024

Again, FG’s MDAs budget for generators erodes confidence in power sector


Energyday Editorial


Federal Government’s show of insincerity in terms of addressing the power sector challenges was once again captured in the 2022 budget proposal now under the scrutiny of the National Assembly.

According to the budget document, the Federal Ministry of Power has earmarked the sum of N301bn as total expenditure for the year 2022.

Analysis of the 2022 budget appropriation bill shows that the ministry intends to spend N294.994bn on capital expenditure, while recurrent expenditure is pegged N6.1bn.

Among the projects to be executed during the period are the Mambilla project which will gulp N650 mn for counterpart funding, way leave consultancy, and survey fees. This is despite over N10bn spent on this project in the last six years without the project taking off.

Also the Kaduna LPFO/gas 215MW power station will consume N430m, while N20mn for the concession of the 40MW Kashimbilla hydropower plant and N450m for its transmission line and consultancy fee. In addition the 10MW Katsina wind farm, which has missed several commissioning timelines has N650mn in its favour and just as N800mn is set out for the Distribution Expansion Programme (DEP), a part of the Siemens Presidential Power deal said to have barely produced results, two years after it was initiated.

There are other capital power projects in the ministry’s budget including N1.25bn for rural electrification access programme (Energizing Education) in Federal Universities; N44bn for Zungeru hydropower expected to be ready this December; Abuja power transmission feeding scheme, transmission access project, among others. The government also pegged N114bn for multilateral loans to the Rural Electrification Agency (REA) to complete renewable energy projects nationwide.

Other key power projects include N668.9m for the solar electrification of the ministry’s headquarters (Power House) and other public buildings; and another N600m to complete solar-powered mini-grids across states, among others.

However, as experts continue to probe the budget estimate striking revelation have emerged regarding the seriousness of the government in terms of tackling the nation’s power sector challenges.

Last week, media headlines revealed government’s admission that the energy sector would remain epileptic even though it has been partially privatised.

The headlines screamed that in 2022 Ministries, Departments and Agencies of the Federal Government will spend an estimated N104bn on purchasing generators, fuelling and servicing them.

Interestingly, the said amount which is about 40% of the total money voted for capital expenditure by the ministry of power to provide electricity for the country is for the enjoyment of the privileged Nigerians who are civil servants.

As indicated in the budget proposal, the stupendous amount will be spent due to the country’s unstable power supply.

Worst still the said amount exceed the Internally Generated Revenue of about 24 states of the federation.

Unfortunately, the figures at our disposal based on which the screaming headlines was anchored is not the whole story, as the figures is higher given that about 15 agencies including the Joint Admissions and Matriculation Board, Federal Mortgage Bank of Nigeria, the Independent National Electoral Commission, National Information Technology Agency, National Pension Commission, Nigeria Customs Service, Central Bank of Nigeria, National Examination Council, Central Bank of Nigeria and others have not indicated their generator budgets.

Breakdown of the alternative power provision show the Finance Ministry alone desires N82bn for generators. A cursory review of the budget shows that the ministry headed by Zainab Ahmed, takes the lion’s share of 80 per cent for generators as the ministry set aside N82.03bn.

The item under the heading, ‘Purchase of Fixed Assets- General’ reads, “Purchase of power generating set 82,030,000,000.”

An analysis of the budget showed that among the agencies, the Federal Inland Revenue Service has the highest budget for generators.

The agency earmarked N250m for maintenance, N1bn for fuelling the generators and N550m for purchasing new ones, given a total of N1.8bn.

On its own, the Nigerian Army has the second highest budget for generators having earmarked N971.7m for generator fuel alone. The Nigerian Maritime Administration and Safety Agency has the third highest budget for generators at N946m.

The agency with the 5th largest generator budget is the Nigerian Ports Authority which set aside N798.2m for the maintenance and purchase of generators.

The Nigeria Deposit Insurance Commission budgeted N470m for the maintenance of a generator plant and N262.11m for the procurement of a generator, given a total sum of N732.1m.

The Federal Road Safety Corps set aside N529.3m for maintenance, fuel and purchase of generators.

The Nigeria Police formations and commands across the country are expected to spend N211.5m on maintenance and N309.8m on fuel for the generators, a total of N521.3m

Similarly, the Nigerian Communications Commission will spend N500m running generators next year having earmarked N190m for maintenance, N150m for the purchase of new generators and N160m for the purchase of fuel for generators.

The Bank of Agriculture set aside N420.5m for the purchase of a generator while the Standards Organisation of Nigeria intends to spend N412m on new generators and the maintenance of existing ones.

The Federal Airport Authority of Nigeria will spend N400m on generators.

The National Inland Waterways Authority earmarked N379.93m for the rehabilitation of a generator plant and N50m for the procurement of a generator while the Nigeria Civil Aviation Authority budgeted the sum of N240.57m to maintain its generator plant and N124m to acquire a new generator.

Other agencies with large generator budgets include: the Nigerian Defence Academy (N373m), the Nigerian Navy (N344m), the Economic and Financial Crimes Commission (N342.2m); and the Accident and Investigation Bureau (N323m).

The Nigeria Immigration Service earmarked N296.91m for generator expenses out of which N86.9m would be spent on fuel while N144.8m and N65.09m would go to the purchase and maintenance of generators respectively.

The Nigerian Meteorological will spend N285m on purchase, maintenance and fuelling of generators in 2022.

The Nigeria Export-Import Bank will spend N217.67m for the maintenance, purchase and fuelling of generators in 2022 while the Nigeria Correctional Service earmarked N134.9m for generator fuel cost, N43.6m for maintenance, a total of N178.5m.

The Office of the Head of Civil Service of the Federation earmarked N157.8m for the maintenance, fuelling and purchase of generators in 2022 while the National Youth Service Corps set aside N100.2m for the same expenses. The Independent Corrupt Practices and Other Related Offences Commission will spend N127.6m as well.

The Nigerian Airspace Management Agency and the Nigerian Postal Service will spend N100m and N103.1m respectively on generators.

The Federal Ministry of Health and its agencies comprising 88 federal teaching hospitals, medical centres and agencies will spend N3.1bn on generators next year. The health agency with the largest generator budget is the Nigerian Institute of Medical Research which will spend N230m on purchasing generators, N5m on fuel and N1m on maintenance.

The Ministry of Education which oversees 197 federal secondary and tertiary institutions, departments and agencies earmarked a combined N2.8bn for generators. The agency under the ministry with the highest generator budget is the Federal Polytechnic Ekowe which earmarked N237m for the purchase of generators, N18.9m for maintenance and N8.2m for fuel, a total of N264.1m.

EnergyDay is at a loss in coming to terms with all this, more so, when the sector has witnessed partial deregulation.

The impression one has is that apart from a change in nomenclature. How can Nigerians expect improvement in power supply when government agencies which are supposed to drive the implementation of whatever policy initiative are comfortably provided alternative power with the tax payers money annually without question.

And bearing in mind the corruption tendencies in the budget for generators how do we expect a new down when doing so will not be in the interest of those involved.

Nigerians can only expect to provide electricity for themselves as its with other infrastructure like water, as the government appears powerless to address the challenge.

Unfortunately, experts say unless the issue of power is addressed, there is no any economic initiative that can actually drive development in the absence of constant power supply. This has for years become the single fundamental obstacle to national development.

Recently at a forum in Lagos , experts voiced their concerns on our inability to get the power sector right.

At EnergyDay we convinced that this gigantic budget for the purchase of generators by government and its agencies, portends a lack of serious commitments on the part of government to tackle the hydra-headed monster of power sector conundrum.


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