Nigeria’s power sector has for the past 23 years, faced numerous challenges that have gone unresolved by the administrations of Olusegun Obasanjo, Umar Musa Yar’Adua, Goodluck Jonathan, and Muhammadu Buhari.
The trend has largely contributed to rising poverty, insecurity, poor productivity among other worsening development indices, despite the nation’s potential to generate over 12,522 MW from its existing gas, hydro and solar plants.
Speaking during an interview on Trust TV’s 30 Minutes X-rays, Dr Usman Gur Mohammad, a former Managing Director of the Transmission Company of Nigeria (TCN) and former employee of the African Development Bank (AfDB), explained why past leaders have been unable to address the problems in the sector.
In the interview, Dr Mohammad highlighted the failure of the National Integrated Power Project (NIPP), implemented during Obasanjo’s presidency, despite significant public funds being invested in the project.
He also discussed the challenges faced by Yar’Adua and Jonathan in addressing the power sector issues, and the limited progress made by Buhari’s administration.
Overall, Dr Mohammad emphasized the need for strong leadership and effective planning in order to effectively address the ongoing problems in Nigeria’s power sector.
What the former TCN boss said:
He said, “Under the Obasanjo regime they passed the power sector reform into law and they unbundled the power sector into 11 companies and handed over all. They never embarked on privatisation; they stopped there.
“But the biggest investment that Obasanjo did in the power sector was the National Integrated Power Project (NIPP). We embarked on that project without adequate study, we were convinced by some foreign companies that they were going to supply gas turbines to us, and then they said they were not even going to be doing the installation; that they would hand it over to a Nigerian that was working with them who would take the responsibility of the installation.
“So, what we did basically was that, it’s like you want to build a house and you award a contract to somebody to build the house for you and he does the roof and keeps it for you when you have not started the civil works; that is exactly what we did with the NIPP.
“They brought this gas turbine under FOB, and some of them stayed for more than four years in Port Harcourt, with no road even to carry them; the bridges were not tested to see whether they could be carried. So, we didn’t even clear the place where we were going to install the gas turbines and there was no gas supply to the locations.
“This is exactly what happened with transmission also. We awarded so many contracts that we didn’t carry out the studies. Some of those contracts actually failed completely and some of them were completed with a lot of inadequacies.
“When I was made MD of the transmission company, one of the first contracts I awarded was for the procurement of three emergency reactors. I had to buy three reactors for a transmission that had been completed under the NIPP.
“We installed a reactor in Ikot Ekpene, one in Ugwaji and one in Jos. We had to also do emergency procurement of transposition towers. They built those lines without transposition.
“These are some of the reasons that accounted for so much wastage that we are seeing happening under the NIPP. We spent so much money but you cannot relate the asset that we got out of the project with the money that has been spent.”
Dr. Usman also stated that the dissolution of a committee established by Yar’Adua’s administration to review the sector by the Jonathan administration contributed to the current problems plaguing Nigeria’s power sector.
He continued: “When you come to Yar’Adua; he actually did something that many other people did not do. He suspended the implementation of the power sector reform and set up a committee to review the power sector reform to advise him on how to go about it. That is the best thing to do actually.
“But what happened immediately after he died, Jonathan discarded the report and called a consultant to advise them on how to go about privatisation.
“They employed an Indian consultant who advised them to do what is called pilot – privatise one or two states and see the experience that you learn from those two states before embarking on entire privatisation.
“Jonathan discarded that report and completely took a decision to privatise the entire network – distribution and generation.
“Meanwhile, there were certain studies that they were supposed to carry out to do the privatisation. For the DisCos, anybody who is taking over a DisCo, a company that is experienced will insist that you have to give them the aggregate, technical and commercial laws determined scientifically. This was not done.
“We assumed a 25 per cent loss, so when we went to a road show all over the world, everybody told us, all the companies that have experience told us, please go and determine the studies, determine scientifically the aggregate technical commercial, we are not ready to do that.”
“We eventually knew nobody was going to come. So, we lowered the qualification criteria to allow Nigerian companies to take over those companies. That was how all the DisCos were taken over by companies that have no experience,” he added.
He continued, “What the Buhari administration took over from Jonathan is the completely privatised power sector with a transmission company under the government, but it was given to Manitoba Hydro International to manage on behalf of the government.
“The government has taken over what you call the Single Buyer Model where the bulk trader is the one buying all the electricity and they sell to the DisCos.
“Yes! This single-buyer model in electricity has never worked anywhere in the world; it has never worked. I don’t know how they advised us to do this. It has never worked, because it makes the DisCos to be not accountable to anybody; it makes the GenCos to be lazy.
“Because you have somebody who is taking the responsibility and taking the cost, meaning, if the DisCos don’t generate enough money to put into the sector, the shortfall that is supposed to go to transmission and go to generation is going to be paid by the government.
“It is a subsidy. It’s supposed to be a transitional arrangement of five years, but now we have spent more than 10 years and it still exists.
“Under the arrangement, the government of President Buhari has pumped close to N2trn into the power sector to finance this kind of subsidy and at the end of the day that money has not translated to a single megawatt increase because it’s just financing consumption. We are just financing the failure of the power sector reform; that is how it is.”