SUSTAINING THE IMPROVED ELECTRICITY SUPPLY
I am drawn to believe that many Nigerians have seen some improvement in electricity supply in the last few months. I just hope that this assumption is indeed true. In Lagos where I live, I have noticed an usual availability of electric power, so much so that for some weeks, we have not been using much of the generator. Yes, often the supply is disrupted, but before you can start the generator, the power is restored. Every once in a while there is a collapse of the system but it quickly comes back to life. In my family home in faraway Arochukwu, in Abia State, I have also been surprised by some improvement in electricity supply in recent times. In fact, the change has been most dramatic in Arochukwu. For years, I had never arrived home to find the lights on. We would have to start the generator to have light to get into the house and most times, we could spend a whole week without electricity from the mains. Indeed, we had come to the conclusion that "NEPA" people intentionally take out the light over the weekends or during holiday periods when they expect many of us to be home. But in recent weeks, I have arrived Arochukwu without first having to power the generator. Indeed I had spent a whole week end without using the generator. Therefore, we need to congratulate all those working hard to provide this noticeable improvement. From the Minister of Power, Works & Housing to NERC to BULK TRADER, GENCOS, TRANSCO and the DISCOS. They have always been on the receiving end of endless criticism by Nigerians and therefore we must acknowledge this visible improvement in output.
It is not as if we have achieved a comfortable or befitting level. I am also conscious that many Nigerians may not have had similar experience in recent times. But since my experience cuts across two regions of the Country, it may be permissible for me to assume that many other Nigerians share my experience of improved supply. I am therefore wishing that this improvement is sustained across the nation. But since we had been here before, when we had short periods of improved supply and then went through prolonged periods of poor supply, I am also praying and hoping that this improvement will be sustained and hopefully we will begin to change the story of electricity supply in our beleaguered Nation.
It may therefore be appropriate to ask what caused the improved supply. First is that there has been significant improvement in generation output Recently I read that our Installed capacity had reached 12000 MW and that we are now better able to actually generate 7000 MW, transmitting over 6000MW through TRANSCO. Second, it is also possible that the improved distribution to households may have occurred because of increased availability of prepaid meters. My experience is that this may be a major contributor to this improvement. Use of pre-paid meters achieve three significant benefits: It shuts out illegal connections and power theft; it mandates more efficient use of power as households now manage their consumption, avoiding waste, thus releasing more energy for other users; and the discos now have more cash as consumers do not only pay before use but all old or outstanding debts must be paid before the prepaid meter can be commissioned to work.
Our challenge then, is how to sustain this improvement so that Nigeria can solve one item that has held its productive economy down, being a major contributor to our global un-competitiveness. Indeed my first take on this, is that we must pursue aggressively the provision of pre-paid meters to all electricity users. The benefits are enormous and it will cut out much of electricity theft and wastage, allowing the small quantity we produce to be efficiently used. I trust that the DISCOS that have invested in pre-paid meters have seen a marked jump in their cash flow. This increased cash flow will not only help many meet their financial obligations to banks but allow more investment in acquiring transformers and other critical equipment. Luckily we now have companies that can produce these meters locally, the recent being the Gospel Digital Technology FZE, in Calabar commissioned two weeks ago. Discos should engage such companies and arrange a massive production of pre-paid meters and get every consumer to procure. The benefits to the entire electricity value chain will be phenomenon.
Secondly, it has become evident that much more investment is required in this sector if the 40,000 MW projected for Nigeria by 2020 can be achieved. Nigeria is currently the 5th largest generator of electricity in Africa, behind Libya, Algeria, Egypt and South Africa; and is the 70th largest producer in the World. Beyond direct investment by the Federal Government in generating plants as is being done in the Mambilla, or other public sector efforts as is being done in Cross River State, Nigeria must invite substantial Private sector investment in all segments of the value chain. Government insistence on maintaining monopoly on transmission needs to be reviewed urgently. If we can trust the private sector to be the sole provider of several critical infrastructure and services like Medicines and Telecommunications, then we should allow private sector investment in modernizing our transmission systems to help improve evacuation and distribution.
Thirdly, the GENCOS & DISCOS that are already privatized need to invest more and quickly too, to vastly improve supply to consumers. Many Nigerians and recently the federal government have expressed disappointment with the performance of these companies, leading some to question the capacity of the companies to meet expectations. Some have even queried the integrity of the privatization process that produced these major investors, especially in the DISCOS. There have been even strange suggestions that the whole exercise should be reviewed.
While I support every effort that need to be made to make the companies ramp up investments to vastly improve sorely needed supply, nothing should be done to unduly interfere either with the ownership or the running of these companies which are essentially private companies. Nigeria must learn to respect its laws and other international covenants. There could always be buyer's or seller's remorse after any transaction, but as soon as a deal is sealed and values exchanged, the terms of the deal must be respected. This country is struggling to restore investors’ confidence and therefore must avoid any actions or suggestions that would suggest policy reversal. Government being a residual shareholder in these companies may decide to sell its shares to other companies that may bring value or they can use their position to persuade the majority shareholders to recapitalize or invite other investors. But it must be by mutual agreement, no underhand or overreach tactics. The recent tango with Intel is already raising dusts in the investor community. We must avoid shooting ourselves on the feet again.
Fourthly and lastly, the issue of appropriate tariffs and pricing using global best practices must be enforced. If the DISCOS and GENCOS are not making money, then no new investments can flow into the industry. As I have argued frequently, if we wish to become a major global economic player and join the list of emerging Nations, then we need massive ramp up in electric energy generation, transmission and distribution. And this cannot happen without massive investment in a deregulated and investment friendly economy. Everything therefore must be done to sustain the improved electricity supply that we (at least some of us) are currently experiencing.
Mazi Sam I. Ohuabunwa OFR