Unresolved Issue Of Electric Power Supply; By Biodun Olamosu

Introduction

The electric power industry is best associated with economic development of any country. It is generally believed that for industrial development to be achieved, the development of social infrastructures, most importantly provision of electricity must be taken for granted; as a factor to depend on in driving the process of industrialisation.

Industrialisation can take different forms along small, medium and large scale depending on volumes of work in accordance with capital formation. Electricity is also of vital importance in commercial institutions and residential areas to stimulate life for welfare purposes. So, it is a necessary commodity that individuals, firms and other social formations can hardly do without.

Its introduction to the polity could be traced to the advent of colonial administration in Lagos in 1886 having two generating sets in place to serve their purpose. Other mining industries across the country including Mining Company in Jos were reported to have electricity in the early 1900s before many locations in London. Such other companies include Shell, NASCO (Jos), African Timber and Plywood Companies of Warri and Sapele that earlier generated electric power for their own use.

There is no denying the fact that the major problem associated with the industry is that of poor investment and management over the years as the machineries in use were already old and dilapidated while refurbishing were hardly being undertaken. Definitely the industry is in dire need of huge investment for capitalisation and this becomes imperative in order to reposition it to meet the needs of the moment. There is hardly any other way out than to update its investment propensity as the industry is strategic to the nation’s industrial progress.

Electricity is meant for the purpose of supplying energy to either the households or for production purposes in the industries and for artisans. Electricity as a product of mechanical process is of various types that can be categorized in accordance with the sources of its derivation. These include hydroelectric power like the Kainji, Jebba, Shiroro depending on rivers for its generation and Thermal gas such as that of Egbin, Sapele, Afam i-II and Delta I-III stations that utilise gas for this purpose too. Other types include solar, fossil fuel, coal, nuclear, steam and wind are known in other parts of the world but yet to be exploited in Nigeria.

Historical Background

The Electricity Corporation of Nigeria (ECN) which ushers in the first policy in the industry was established in 1951. Later, the Niger Dams Authority in charge of the major source of electric power solely responsible to serve the entire country for a long period of time was established in 1962. By the year 1972, NDA and ECN were merged to be named National Electric Power Authority. NEPA since then has been charged with the responsibilities of generating, transmitting and distributing electricity for the whole country.

All of these changed in 2005 when the government coming up with the idea of unbundling NEPA that was later named Power Holding Company of Nigeria (PHCN) with the objective of commercializing and privatizing other branches of electric power establishment such as generation, transmission and distribution functions of the corporation.

The State of Electric Power in Nigeria

Nigeria population has increased from about 50million at independence to over 200million today, while gross domestic product now stands at $397.27billion. This put her above any other countries in the sub-Saharan Africa as the largest economy. With these statistics the country is required to be in need of electric power far above what are available to it. It is disturbing to note that in 23years (1999-2022) electric power generation only managed to crawl from 2,000MW, to 7,500 while distribution now stand at 5,000MW and transmission at 8,100MW.

ALSO READ:

Under Tinubu, Corruption Is Fighting Back With Gusto; Jibrin Ibrahim

This is far from the government’s planned target for the year 2020 put at 40,000MW that is even below expectation. In its expectation, United Capital Plc put this at 180,000MW. The latter seems reasonable taking into consideration volumes of Nigeria’s economy and population. In comparing her status in this regard with other African countries, it does not justify a record of fair performance. In the case of South Africa with the population of 80million, the country consumes not less than 80,000MW per annum. Others that include Ghana and Tunisia with less population are ahead of Nigeria as they are able to produce twice and ten times respectively the volumes of electric power being consumed in Nigeria.

There is no denying the fact that the major problem associated with the industry is that of poor investment and management over the years as the machineries in use were already old and dilapidated while refurbishing were hardly being undertaken. Definitely the industry is in dire need of huge investment for capitalisation and this becomes imperative in order to reposition it to meet the needs of the moment. There is hardly any other way out than to update its investment propensity as the industry is strategic to the nation’s industrial progress.

See Table 1 below that illustrates the level of old and dilapidated equipment in use in the generation and transmission of electric power in the system.

                 Table 1: Transmission Company of Nigeria Major Equipment Age Distribution

                                                                 Age distribution

S/N	EQUIPMENTS	0-10YR	11-20YR	21-ABOVE	TOTAL EQUIPMENTS	0-20YR (%)	21-ABOVE (%)
1	330KV Trfmrs	5	1	32	38	16	84
2	132KV Trfmrs	48	48	148	244	32	61
3	330KV CBs	39	35	167	241	23	69
4	132KV CBs	81	49	331	461	24	72
5	330KV TRX Lines	5	0	65	70	8	93
6	132KV TRX Lines	5	26	104	135	5	77
7	REACTORS	1	1	16	18	6	89

Source: Labo, 2010; Ishola, W, Power Sector Reforms in Nigeria: Challenges and the Way Forward, Dept of Economics, University of Lagos, 2015

Enough finance can be raised from revenues generated from oil in order to diversify the economy in this way. Unfortunately, successive governments only pay lip service to diversify the economy while not doing anything near this in practice. Apart from the finance required to procure necessary machineries needed for this purpose, the country is blessed with various natural resources such as rivers, wind, sun, gas, fossil fuel, coal and labour (skill) that could be harnessed in generating further electric power to bridge the huge gaps needed. Report confirms that nothing less than $2.5 billion worth of gas available in quantum of 2.5 billion cubic feet are being flared off on the field without plan for its preservation.

ALSO READ:

Workers Problematic Search For Justice At The National Industrial Court; By Owei Lakemfa

The attitude of the authorities in allowing such wastage to pass could be traced to the abundance of gas in reserve than they could cope with. Gas reserve for the country is put at 124trillion cubic feet. The worst scenario is the case in respect of the solar – sun that we hardly think of any useful purpose of how to harness it for our own use. Such country as Germany that do not have as much sun as Nigeria and other countries in the Tropics, rely on this for a significant portion of their electric power needs.

                                     Table 2. Energy Sources in Nigeria

Energy Type	Estimated Reserves
Wave and Tidal Energy	150,000tj (16.6 x 106) ton/year
Crude Oil	36 billion barrels
Biomass Hydro	144 million tons/year
Hydro	14,750 MW
Natural Gas	185 trillion cubic feet
Solar	3.5-7.0 kmh/m2/day
Coal	2.75 billion meric tons
Wind Energy	2.0-4.0 m/s

Ishola, W, Power Sector Reforms in Nigeria: Challenges and the Way Forward, Department of Economics, University of Lagos, 2015

Failure of the Electric Power Industry 

The blame game coming from the ruling elites on the failure of electric power supply has to be put in perspective. This is because the failure does not come by because of its role that is meant to serve the needs of the masses. The corporation in the main beyond the official narratives, it has always meant to serve the purpose of the elites that own industries, commercial firms, and households; while rural areas and the poor even in the cities were denied such services. This is largely for reason that the poor could not access the product as they could not afford to pay for it.  This means that the subsidies offered by the corporation all those years in the pre-SAP period were meant to accentuate the interest of the elites in wealth accumulation. So the loss that the neo-liberalists are talking about in respect of ECN and NEPA came about in the service of the ruling elites. See the Table 2 below to confirm this truism.

               Table 3: Electricity Output from Effective Capacity in KWH

Yrs. 19’	T/ opt 10kwh (Y)		SALES						TO NIGER		LOSSES
			Residential		Industrial		Commerce		KWH	%/Y	KWH	%/Y
			KWH	%/s	KWH	%/S	KWH	%/S
70		1158	333	29	480	41	101	9	–	–	244	21
71		1388	445	32	460	33	243	18	–	–	240	17
72		1682	574	34	594	35	301	18	–	–	213	13
73		2211	634	29	727	33	391	18	–	–	459	21
74		2608	752	29	839	32	448	17	–	–	569	22
75		2907	895	31	949	33	499	17	–	–	564	19
76		3470	1022	29	1097	32	597	17	10.41	0.3	743.6	19
77		4108	1357	33	1198	29	711	17	65.73	1.6	776.3	19
78		4611	1496	32	1310	28	822	18	59.94	1.3	923.1	20
79		5219	2108	40	1361	26	694	13	104.4	2.0	951.6	18
80		6523	1956	30	1428	22	622	10	156.6	2.4	2360.4	36
81		7822	2724	35	2151	27	753	10	203.3	2.6	1990.7	25
82		8566	3018	35	2245	27	603	7	179.9	2.1	2470.1	29
83		8713	3136	36	2229	26	742	9	191.7	2.2	2414.3	28
84		9036	2861	32	1883	21	715	8	198.8	2.2	3378.2	37
85		10431	3186	31	2212	21	750	7	239.9	2.3	4043.1	38
86		10765	4175	39	2458	23	743	7	118.4	1.1	3270.6	30
87		11265	4105	36	2576	23	790	7	123.9	1.1	3670.1	32
88		12792	4234	33	2806	22	798	6	268.7	2.1	4685.3	36
89		13033	4768	37	2986	23	804	6	299.8	2.3	4175.2	32
90		13463	3948	50	2016	26	1906	24	269.3	2	5323.2	39
91		14167	4023	49	2042	27	2226	27	212.5	1.5	5662.5	39
92		14834	4340	50	2177	25	2182	25	252.2	1.7	5785.3	39
93		14504	5217	52	2067	21	2714	27	145.04	1.0	4361	30
94		15531	5641	55	1888	18	2709	26	139.8	0.9	5153.2	33
95		13783	4780	52	1888	20	2596	28	124.1	0.9	4394.9	32

Source: NEPA Headquarters, Lagos; Ayodele, A.I, Optimal Energy Tariffs Under Nigeria’s Commercialisation Policy: The Case of NEPA, Research Report, No. 6 Development Policy Centre, Ibadan Nigeria, 1998

ALSO READ:

Oronsaye Report: Issues Of Efficiency In Service Delivery, Cutting-Cost And Job Losses; By Prince Peters A. Adeyemi

One other reason for the draining of the corporation’s resources that made it difficult to break-even how much less gained profits had been because of the managements or authorities in place to control and administer the affairs of the corporation along capitalist orientation. Such managements are reflection of the image of the ruling class that they were there to represent with their associated philosophy of primitive accumulation. So, such failure did not come about for reason of being run along the orientation of Public Utility Corporation but one that was at variance to it in satisfying the interest and ideology of individualism. If it is otherwise, the workers that were responsible in carrying out the day-to-day business of the organization would have been involved in its management and control.

Proper economic planning on scientific basis would be required like before and this will need to be followed in details. It is unimaginable for a serious government to think of depending on the private hands for viable economic result as it is impossible to control what you do not own. The present government, like its predecessors, will be disappointed on depending on Dangote oil solving the problem in the oil industry. If Dangote could do this, he would have checked the increasing price of cement where he is enjoying more or less a monopoly presently.

We therefore have to understand where those excuses are coming from and for what purpose. The neo-liberalist agenda that brought in place structural adjustment programme to address the situation were out to find means of capitalizing their enterprises and the state being affected by capitalism in crisis. So, the same story across the world became the new order. Nigeria was not an exception in placing its heritage – assets for sale in the market at a giveaway price. Not a few of the present generation of the ruling class benefitted from this new way of empowering their members. This is the more reason none of them could be trusted against neo-liberalism as this is where their fortunes come from. Even when after 20-30 years the situation has been worse rather than being improved upon.

ALSO READ:

Kleptocratic And Utilitarian Fringes Of Nigeria’s Democracy; By Aminu Habibu Jahun

In characteristic of Nigerian elites in business that benefitted and lack long term investment culture, report has it that some of them sold what they bought as scraps while the estate portion of it – land and buildings were sold many times over the purchasing price of what they bought without adding value in whatever way to it. The various conditions in place as legal basis of carrying out the privatization processes were neglected.

This was unlike what happened in Bolivia, where their gas industry earlier privatized had to be renationalized upon the devastating effects of the privatization policy there on the economy. The Scandinavian experience where market forces was introduced but with public ownership was another experience at variance with that of the West that Nigeria followed like a copycat and we are worse for it.

Above all, the whole idea of privatization and neoliberal agenda negate the county’s constitution, the grand norms of our laws. The government led by Labour should have confidence in the working class as reliable collaborators in the control and management of such monopoly corporation like that of the hitherto NEPA to achieve its purpose in providing electric power for the generality of Nigerians either at industrial level, artisans and for households under the policy of discriminatory price system without declaring a loss. So what is needed to reverse the multiplicity of crises confronting the country in all facet of life such as the case of insecurity, poverty, unemployment, underfunding of education and health, poor pay, etc. is to have pro poor government with attending policies that will be able to mobilize the working class along economic development.

ALSO READ:

Discriminatory Practices, Disregard For Extant Laws, And Other Matters Undermining Pensioners Under CPS; By Ivor Takor

Proper economic planning on scientific basis would be required like before and this will need to be followed in details. It is unimaginable for a serious government to think of depending on the private hands for viable economic result as it is impossible to control what you do not own. The present government, like its predecessors, will be disappointed on depending on Dangote oil solving the problem in the oil industry. If Dangote could do this, he would have checked the increasing price of cement where he is enjoying more or less a monopoly presently.

There is also the need to correct the perspective associated with Obasanjo praising the experience of the Asian Tigers in their march towards industrial development but fail to understand how this was achieved by way of public ownership and regulation.

Our own experience of neo-liberalism in practice is precarious as the private hands invited into the system are coming without finance. The government is therefore charged with the responsibility of financing the projects being put in the hands of the new owners. They do not even have their own finance but relying on borrowing from the domestic banks for this purpose while the government is also borrowing for the same purpose. The domestic banks are also been affected by this process as some of them have been declared insolvent on not a few occasions for this reason.

The hypocrisy of the capitalist state could be attested to by the way they switch at their convenience to adopt nationalization of industries when the system is in crisis by using the state apparatus to bailout private sector. When the situation is otherwise in the absence of crisis the capitalist state could not see the need for the intervention of the state as business are serving the best interest of the rich while they are ripping abundant profits at the expense of the poor that are not well served at such period.

The social inequality that is huge in defining the class relationships in the country is an important issue on how to move the country forward and change it for better. This is hardly discussed by our ruling elites, unlike in other climes where they put check on the rich to avoid monopoly. In our own clime, the poor income earners and self-employed in small business pay taxes only, while owners of big firms are given tax holiday.

Unemployed (under) just like the huge resources that go into corruption and unexploited natural resources are instances of wastage to the economy. This is against the situation when more hands are employed and well remunerated, it is on the basis of this that purchasing power can be guaranteed; upon which businesses, industries and commerce can strive and sales, turnover and profits can be assured.

More than 50 percent of the cause of insecurity and ethnic/religious agitations can be traced to indices of poverty of the able-bodied young men and women; unemployed graduates that have been jobless for the greater parts of their lives.

Conclusion

There is no magic in form of special economic model that can resolve the problem in the electricity industry and other sectors apart from the proper understanding of the political economy of the class relationships, a means of finding out the cause of our underdevelopment in order to find a solution to it. This is to say that the system has been beneficial to the elites only while the poor working class is the one always on the receiving end of the pro rich policies.

ALSO READ:

May Day Calls And Clashes In A Year Of Genocide; By Owei Lakemfa

The debate on how to address the problem in the sector generally and the industry in particular has been centred on the issue of right price to pay by the consumers, regulatory institutions in place to execute the laws and policies. The experiences in the past three decades have shown this as not being a correct position on the way out. For example, with the advent of SAP, price in the sector has been liberalised and raised without this resulting to provide quality service in return. Instead, electric power supply became worse than ever before.

My proposal is therefore hinged on the political economy of the country’s underdevelopment that would need to be understood along the issue raised specifically associated with the electric power industry. This becomes important in order to find an insight to why we are at crossroads whereby greater percentage of the population are in poverty and the country in darkness.

Our own experience of neo-liberalism in practice is precarious as the private hands invited into the system are coming without finance. The government is therefore charged with the responsibility of financing the projects being put in the hands of the new owners. They do not even have their own finance but relying on borrowing from the domestic banks for this purpose while the government is also borrowing for the same purpose. The domestic banks are also been affected by this process as some of them have been declared insolvent on not a few occasions for this reason.

So, the whole idea of privatisation is nothing but shady deals amongst the ruling class to sell the country to meet their individual and corporate interests while the rest of the poor Nigerians are left to wallow in poverty. The need to seek for alternative to neo-liberalism is imperative on the basis that this has failed to bailout the system of capitalism since it came about in the 1980s up to the present period.

It is significant to address electric power industry for the multiplier effect this is going to have on the development of the economy and the possibility of welfare facilities it is going to fetch the generality of the people especially as it relates to reduction or eradication of poverty. But this can best be approached with the economy being run along public orientation and workers democratic control and management. This was the missing point with the experience of the past public monopoly corporations ran aground in the cause of satisfying the interest of the ruling class.

The experience of Sweden and other Scandinavian countries in decentralising managements and control of the sector provide veritable evidence to learn from. The only constraint associated with such pro poor therapy of how to address the problem is in having a government with leadership that is selfless and driven by the cause of the poor. Such leaders have to be convinced of this path towards developmental process. It is only by this that such government can be able to resist the pressure likely to come from traditional capitalists – domestic and foreign as they will want to insist in the way of status- quo being retained in order to have their interests satisfied. The cause of the failure of the successive governments in power has been because of their inability to differentiate the interest of the poor from that of the rich, thereby stand to collaborate with the latter; by compromising with the system and the capitalist forces driving the process.

My proposal is therefore hinged on the political economy of the country’s underdevelopment that would need to be understood along the issue raised specifically associated with the electric power industry. This becomes important in order to find an insight to why we are at crossroads whereby greater percentage of the population are in poverty and the country in darkness.

Comrade Olamosu, National Secretary, Socialist Labour, can be reached via +234 817 510 9802, Olamosubiodun2000@gmail.com 

ARTICLES BY THE AUTHOR:

Fela: Musical Icon And Pan-Africanist

Imoudu And Kokori: The Tale Of Two Heroes

Now That They’ve Called Off Their Promised Indefinite General Strike For A Few Crumbs

Comrade Laoye Sanda: A Socialist Humanist Par Excellence