Buhari’s bailouts: We may never get it right in Agric, Power (II)

IF the bailouts in the agriculture sector are fast sinking like huge drops of water in a basket, the situation in the power sector is worse. The sector was well bedevilled before the restart of democratic rule in 1999 but it has continued to sink into further abyss despite endless government’s financial interventions.

Some reports claim that well over N11 trillion had been sunk into the power sector since 1999 but no clear figures would emerge, no matter how deep you dig.

The National Assembly in the Sixth and Seventh Assemblies attempted to get clear reports of how much the power revitalisation efforts under former President Olusegun Obasanjo cost the nation. At the end, the controversies raked up were more than the lawmakers bargained for. Different figures surfaced at different hearings and it became difficult which one to adopt. The Central Bank, the National Integrated Power Projects, Niger Delta Power Holding Company and the Ministry of Power all submitted varying and contrasting figures that left the lawmakers in bewilderment.

If we go by the submissions by the Nigerian Labour Congress (NLC) at its recent Central Working Committee, well over N11 trillion has gone into the power sector since 1999. There are claims that the Obasanjo government alone sunk $16 billion into the sector, while the administrations of the late President Umaru Musa Yar’Adua and that of Goodluck Jonathan were said to have sunk another $10 and $11 billion (not easily verifiable as earlier said).

Midway into Jonathan’s administration, it was resolved that privatisation would solve the problems of the power sector and that the huge haemorrhage would cease if the sector was privatised. The government went ahead to transfer the Distribution Companies (DISCOS) to private investors, the same was done for Generating Companies (GENCOS). Despite the bold move at privatisation, which was almost stalled by the organised Labour, the government has continued to invest different manners of bailouts. In turn, the citizens have continued to suffer in darkness.

Between May 2016 and July 2017, the incumbent administration has paid bailout funds of N740 billion to the power firms. In July, the government announced another N40 billion aid to the power companies to support metering initiatives. Despite that, the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola was quoted in the media as saying that the DISCOS  need N220 billion to provide meters to Nigerians.

So when will the haemorrhage stop? Is there any signal of the cessation in sight? These are the questions that trouble the mind as one engaged a team of experts recently. I was told that the question to ask revolves around the fact that the DISCOs and GENCOS signed performance agreements before they took over from PHCN and that none of them has achieved 20 percent of the said agreements. Why are they not achieving performance targets? Why has the government not asked the relevant question(s)?

Emerging facts indicate that the successor companies to PHCN were eager to take over the reins of the power sector and enjoy the finial benefits. They took little attention of the huge burden the new responsibility would heap on their shoulders and the essence of the performance agreements they signed with the government through the BPE.  And that accounts for the immediate actions many of the Discos took on takeover. The first steps, if you check around the country, were the setting up of the sales and marketing departments with huge numbers of staff. There were little or no efforts on employing the critical engineering staff. Though they set up customer care units, but check the response time. Many consumers are left frustrated.

With the owners of the businesses caring less about performance, the workers took to the same style. Many of them who worked in the old NEPA continued to behave as the ill motivated civil servant. That is why today, you are most likely to see constant power in areas where there are no prepaid metres. Those with prepaid metres can heap one complaint upon the other; they can only be attended to at the whims of the DISCOS. If you think that the DISCOS should readily attend to those with prepaid metres which should guarantee straight and prompt payments, you are wrong. Prepaid metres do not allow for estimated billings which provide another source of easy money. No one needs to look far to confirm that the model of operation of the DISCOS has been so far unproductive. You can’t convince anyone that their approach is business like as well.

When the Telecommunications sector was privatised, no one needed to preach to the companies that they needed to extend their network coverage across the country. No one told the companies they needed to ensure availability of phones (handsets). Thus even though the lines were rolled out at N60,000 in the first week, the price had dropped to N40,000 weeks after and there was competition in the importation of different kinds of phones. Today, the telecoms companies are not out of business even as they give out their lines for free.

What stopped the DISCOS from investing heavily in transformers and prepaid metres for free distribution as soon as they took over the companies? If this had been done, they can collect biometrics of every metre user and deal with issues of power theft easily. Why did they choose to procure metres from foreign countries rather than kickstart with home grown companies? Who says the metres must be sophisticated at first instance? Many phone user of today started with NOKIA 3310 and the old Techno. Right now, those brands are competing with the best in the market.

On a recent tour of Kaduna Electric district, we were told the Distribution Company in charge imports metres from Egypt and other countries but a metre manufacturing company is dying in Zaria, less than 40 minutes away. They said the local companies lack capacity but we all know that capacity is not only made in heaven. Patronage will drive excellence and that is how the Japanese, Koreans and Chinese have been able to drive their industry.

Should the Federal Government continue to bail out the power sector even when it appears hooked to the feeding bottle? That is what the government must review fast. Bailouts won’t do the magic; companies must adhere to performance indicators.