Post-Privatization And The Power Sector Challenge

Five years post-privatisation, reality has dawned on most Nigerians that the exercise was not the elixir to the ailing electric power challenges in the country. For other countries like India and Singapore, privatisation was used to successfully reset their electric power challenges, yet the same is proving too difficult to be effective in Nigeria. Instead of generating, transmitting and distributing enough megawatts of electricity to homes and industries across the country, what we get almost on a daily basis are excuses from the authorities.

Seldom does a week go by without either the 26 Gencos, the Discos and TCN which is still within the ambit of the government, passing the buck. At the receiving end most times are the Discos which represent the direct link with the consumers. They have been accused of investing little or nothing to improve their networks and services since they took over. They have also been called out on several occasions for failing to take more power from the grid to their customers, therefore increasing the volume of power stranded at the Gencos. Even in market transactional practices, the Discos are often said to have little regard for rules and obligations as rightly spelt out.

Although the aforementioned points may hold sway, it is also true that other stakeholders in the power sector, including the FG, have contributed to the challenge of electricity supply in Nigeria. Indeed, with the exception of maybe the Gencos which have clearly made investments and commitments to improve their capacities, all other players have leveraged several loopholes in the sector to get off their responsibilities to the detriment of the Nigerian consumers.

Case in Point, the present confusion in the market which has forced the FG to put out about N701 billion payment guarantee fund for the Gencos as well as negotiate with the World Bank to create a recovery plan, was fostered by the initial disposition of the current administration that saw nothing good in the power privatisation exercise of the Goodluck Jonathan era, and was at best confused about what to do with it. Instead of working to improve on what they met on ground, they opted to waste time by staying action on critical policy decisions for the sector.

Another major hitch was the fact that it took FG over a year to appoint a board of commissioners for NERC after the tenure of the previous board elapsed. The lag on regulatory tasks that were created by this singular act is immeasurable as evidenced in the workings of the market. Till date, one of the fundamental challenges of the industry is the non-completion of the gas market privatisation.

Similarly, TCN has been unable to wheel more than 5074 megawatts of electricity ”which incidentally remains the country’s highest generated and transmitted power so far” on their 330KV transmission lines across Nigeria. There were also reports that the quality of power transmitted by the TCN is poor and sometimes rejected by the Discos to protect their distribution equipment and consumers gadgets. That aside, FG has frequently fiddled with the statutory exercise of allowing for a cost-reflective tariff for the market to encourage further investments and growth.

Given the foregoing, putting the blame of the ills bedevilling the power sector on Discos, as the authorities seem to be doing, is neither right nor is it the correct way to address the challenge of a sector.
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