As first principles go, we believe leadership is the key to a successful future. What we must do is to revisit the sector with a view to designing a comprehensive solutions-based approach. We must summon our highest resources in terms of intellect, creativity and courage.
A major issue facing the power sector is, of course, political capture by vested interests. From a game-theoretic viewpoint, it is inevitable that those who are engaged in importation of generators have a vested interest in killing the power sector. Some of these people have held key political appointments, with, ironically, mandates to oversee energy policy. Today, Nigeria has the dubious prize of being the world capital for generator importation; generators that not only create negative externalities of environmental and noise pollution but also feed into the greed of the diesel-importation cartels. We as a nation have been the worse for it.
It is foolhardy to lump the power sector together with works and housing. We need a stand-alone power ministry with a minister who is committed and passionate about Electricity for All. Nigeria must work with local and foreign investors, building robust synergies for the transformation of the power sector.
The country must take a hands-on approach and declare a state of emergency on the power sector. Part of the problem with this vital sector is theft and vandalisation. It is necessary to institute maximum punishment for such treasonable crimes of economic sabotage.
There is also the problem of poor maintenance culture. The DISCOs have little or no interest in maintenance. Once they are guaranteed a steady income stream, they could care less about maintenance. The Nigerian Electricity Regulatory Commission (NERC) must be empowered to monitor the issue of maintenance and to exact fines on companies that fail to respond immediately to breakdowns and customer complaints. Power companies that fall below statutory expectations must be re-nationalised.
Electricity is central to our collective ambition to become an advanced technological-industrial democracy in the twenty-first century. Nigeria must either become an industrialised nation or we would be nothing but a monstrous Fourth-World behemoth of sweltering poverty, unemployment and destitution as our enemies would want us to be.
Nigeria’s population doubles every 30 years. In 1960 we were 56 million. In 1990 we doubled to over 100 million. Today, we are a nation of 200 million people. In 2050 our population is projected to reach the 400 million mark. We would have overtaken the United States to occupy the number three position, behind China and India. We have no choice but to think deeply — think outside the box — with vision and creativity. We must model electricity demand in a manner that pre-empts our exponential demographics. Not long ago, an econometric study by the CBN projected that tackling the electricity deficit alone could boost our GDP growth by as much as 62 per cent.
As matters currently stand, Nigeria remains at the bottom of the pack in global terms. Our per capita consumption of electricity, according to a World Bank index, is a mere 144.48KWh, in contrast to South Africa’s 4,198.40KWh and Malaysia’s 4,596.33KWh. When compared to the advanced industrial nations, our record looks even more dismal. The average annual per capita consumption for the United States is 12,983.33KWh while that of UAE is 11,263.53KWh and that of Sweden is an impressive 13,480.15KWh. The tiny continental European nation of Iceland holds the world record of 53,832.48KWh. Clearly, we have a long way to go!
We must run while they walk, to echo an admonition by the late Mwalimu Julius Nyerere of Tanzania. Providing electricity for all, will, of course, cost a humungous amount in terms of investment capital but we must pay the price. There are large pools of local savings that can be tapped. We can source financing from the large accumulations of idle pension funds while brokering foreign investment deals that lead to win-win solutions.
Our immediate focus must be on completing the outstanding power projects while tackling structural bottlenecks surrounding generation and distribution. The country must set up a situation room that will monitor and regularly report on progress on implementation on a monthly, quarterly and annual basis. Obstacles discovered should then be isolated and tackled.
We also note that our current approach is static rather than dynamic. The country must institute a paradigm shift in policy and action. We also do not have an electrification policy, the country must, therefore, launch a comprehensive programme anchored on universal access through the vehicle of public works project approach that generates momentum and jobs.
There is a lot we can learn from the successful electrification efforts of countries such as Brazil, China, Zimbabwe, Peru, Nepal and Sri Lanka. Among the critical success factors are: prioritisation of system investment, community participation, rigorous anti-corruption measures, performance-based incentives and ring-fencing programmes against political capture by vested interests.
According to the global consulting firm, Deloitte, successful electrification in emerging economies requires focus on three principal areas: bridging the financing gap, enabling energy transactions, and unleashing radical transparency. They also advocate use of modern ICT such as digitalisation and blockchain to facilitate transactions in a manner that is verifiable and permanent.
Of course, the enabling environment is enormously important. We need a stable geopolitical and macroeconomic environment without which power projects are programmed to fail. We must also broker deals that are attractive enough for investors, with attention being given to the issue of pricing. If higher pricing is what is needed to ensure stable electricity then we must be prepared to bite the bullet.
We must also pay close attention to the value chain, from generation to distribution, consumption and regulation. We must nurture an environment that is favourable to investments in the sector and that ensures win-win outcomes for investors, operators and consumers. Equally vital is developing policy pathways with clear roadmaps that take account of demographics and demand. What is essential is to ensure technically and financially viable operations across the broad spectrum of the value chain. Government must also invest in R & D and human capital to ensure not only innovation but improved skills and capacities to deliver Electricity for All.
Ultimately, government must play a catalytic role, in partnership with domestic and external stakeholders and local communities. Involving local communities in planning energy policy will obviously enhance their sense of collective ownership and will contribute to ensuring successful implementation. Cost of capital also must be controlled. For example, if metering proves rather expensive, consideration could be given to estimates based on standard pricing around average and maximum consumption rates. We are also in favour of differential pricing between affluent neighbourhoods and impoverished communities. Such differential pricing has worked successfully in Côte d’Ivoire where I once lived.
Nigeria must also invest in research and innovation while upscaling technical skills. Our universities must not only to research alternative energy sources but also to train a new generation of hands-on electrical engineers. There should be a major research programme on nuclear energy for peaceful purposes while leaders must be open to all ideas and all feasible solutions that enable our citizens to enjoy the benefits of electricity and civilisation.
and then