Of Privatisation and Power Scarcity

transmission towers project ELP

In recent times there has been an increasing tendency to attribute the power scarcity in the country on the privatization of the power sector. This is without regard to the fact that the power sector privatization was concluded by the Bureau of Public Enterprises (BPE) since 2013, and that we had witnessed improvements in power generation and supply during and after the privatization exercise. One would think that, relying merely on commonsense, any fair-minded observer would appreciate this as an evidence that privatization is not necessarily to blame for the power scarcity, and that a link between the two may be farfetched. And I think it is.

The facts show that before the power sector reform which ended with the privatization of the assets of the companies that succeeded the Power Holding Company of Nigeria (PHCN), specifically the distribution companies and the generation companies, the country’s maximum generated power was about 2,800 megawatts. Then, during and after the privatization exercise, it has witnessed generation exceeding 5,000 megawatts. And such improvements in power generation were accompanied by proportionate improvements in power transmission and distribution which many Nigerians felt in their homes as improved hours of electricity supply on a daily basis.

While this may not have been sustained for various reasons, the facts remain the same, and valid. And while they exist it cannot be right to say, as we have it in a recent publication in one of our national dailies, The Nation to be specific, entitled “Why push for review of power privatization is gathering momentum”, that “two years after the privatization of the power sector, Nigerians … are yet to enjoy improved electricity supply” 

And this is how the publication elaborates on its claims as a basis for pushing for a review of the power sector privatization: “The Federal Government had in November 2013 unbundled PHCN into 18 successor companies and subsequently handed over the power assets of the successor companies to private investors. The exercise was expected to set the stage for a major transformation of the power sector to guarantee uninterrupted electricity supply to the manufacturing sector and Nigerians in general. But two years after, this has not happened. Rather than enjoy significant improvement in electricity supply, Nigeria’s electricity generation capacity has been wobbling between 3,500 megawatts and 4,000 [megawatts] in the last two years, leaving [a] sour taste in the mouth of consumers.”

The picture painted above by the publication may  not be entirely wrong, as it would be right to say that Nigerians are currently not having the coziest of relationships with power supply. However, unless we accurately identify the cause of the problem, we may end up applying the wrong remedy without solving the problem or in fact making it worse.

And it is apparent from the existing facts, some of which I have mentioned here, that attributing the problems to the privatization of the power sector is a wrong diagnosis. Also, that revisiting the privatization exercise would be a wrong remedy that would complicate rather than resolve the problem. This is more so because such calls to revisit the privatization do not specify what form the revisiting should take or how it would amount to a solution to the current problem of power scarcity.

I believe the BPE and other entities involved the privatization exercise meant well and acted in good faith and within the extant rules that guided the exercise. However, other unforeseen factors that are largely related to our morals as a people and other man-made and systemic abnormalities have impaired the realization of some of the goals of the privatization as detailed in the said publication. For instance, who would have imagined that some citizens of a country in dire need of power as ours would embark of the sustained vandalisation of power and gas infrastructure witnessed in the country after the privatization exercise, practically ensuring that all effort to improve power generation and supply remain futile?

Source: LeadershipNg

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