Power Sector Privatisation Policy: A Misnomer

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The privatisation policy of the electricity sector in Nigeria is a highly controversial one. Indeed, the idea of privatising substantial part of the Nigerian electricity sector is about the worst mistakes of previous People Democratic Party (PDP)’s governments of the duo of Chief Olusegun Obasanjo (1999 to 2007) and Dr. Goodluck Ebele Jonathan (2010 to 2014) respectively. Out of the three main sub-sectors of the then Power Holding Company of Nigeria (PHCN) Plc, namely: Generation, Transmission, and Distribution, only the Transmission (now known as Transmission Company of Nigeria, TCN) was not sold off.  Till today it remained a baby of the government while the six Generation power stations of Afam, Egbin Kainji, Shiroro, Ughelli and Sapele, and the eleven Distribution business units of Abuja, Benin, Enugu, Eko, Ibadan, Ikeja, Jos, Kaduna, Kano, Port-Hacourt, and Yola were privatised, with subsequent dismantling of the existing structures including their workers as they were disengaged en mase.  

But since some form of severance pay was worked out for them, with most of them who had probably not seen a million naira in their life before then went home with a few millions as severance package, their jobs being taken away from them meant nothing to them. In fact, most of them, especially in the lower cadre, went home jubilating, celebrating their loss of job as if the few millions would serve indefinitely. Little did they know then that, money being what it is, liquid, will flow away in no time if there is no ready source where it would be replenished from. Although most, if not all of them went into one form of business or another, this could not be sustained due to lack of training and inexperience. So much was committed into them and so little return was recorded. Some others incurred huge loses that threw them out of business. Except for very few who perhaps are still breaking even and those who managed to travel out of the country who are assumed to be doing well, a good number of those disengaged PHCN workers who lost their jobs precisely in October 2013, are living from hand to mouth. A good number have died and others nursing one form of ailment or another.            
The said administrations probably meant well. It appeared as a deliberate government policy of stimulating economic growth and efficiency by reducing the scope of private sector activity through one or all of the following strategies:  transfer of state-owned asset to private owned assets, encouraging private sector involvement in formal public activity and shifting decision-making to agent operating in accordance with market indicators. The argument above, point to the fact that privatisation is all about government withdrawal from economic activities, in order to confine itself to its traditional function of maintenance of law and order, though creating enabling environment for business to flourish. But perhaps due to inadequate consultations as to discover the peculiar nature of public utility corporations to which the electricity sector belonged, it was, rather unfortunately, given the same treatment as others in their privatisation programme. 
‘Peculiar nature of the electricity sector’ is used here to mean that the sector is different from other government or state-owned enterprises (SOEs). Unlike others, it is a public utility corporation meant to provide essential services to the members of the public at very reduced and affordable costs. This is with the intention of making their services available and affordable by all. This also is the situation with crude oil, the oil and gas sectors of the economy. So that the present move of government to remove subsidy on petroleum products is equally a misnomer, reason being that the sectors are supposed to be public utilities that are meant to render essential services to the public. Therefore, the issue of privatisation, which is a capitalist initiative, should not have come to the picture. 

Although the attraction in privatisation, which in simple term means to make private (what was public), is the injection of efficiency, effectiveness, commitment, dedication which the private sector is known with, into an otherwise inefficient organisation like the power sector, the formulators of the policy failed to realise that the power sector was to render service in an effective manner to members of the public. It is incumbent on government of the day therefore, to engage qualified hands who would deliver such efficient services to the public and subsidise the service charges. The government which is supposed to be the owner of the utility body is not expected to think of the corporation making profit. It is expected to fund the organisation in terms of providing it with tools, equipment, materials, qualified and trained personnel, and all that is needed to enable the organisation deliver electricity services efficiently to the public with minimum charges: charges which would enable it to at best break-even to meet overhead costs. This was the line of thinking of a late professor of Public Administration and legal luminary, I.I Omoleke, when he opined that, public utilities are not meant to be privatised. At best they could be commercialised to enable them meet up with their running costs (paraphrased). 
There is no denying the fact that the Nigerian power sector was and still, despite privatisation, grossly inefficient and inept with a morally bankrupt set of workers and services epileptic. But as is said in Yoruba, oribibe ko ni ogun orififo (Interpretation: cutting off the head is not the cure for headache). Yes, a drastic problem requires a drastic solution, this solution was drastically wrong. Although with a good motive to revive the ailing and moribund organisation and properly position it for better performance of efficient service delivery to the Nigerian electricity consumers, the implementers of the policy failed to recognise boundaries. Fundamentally, they failed to realise that here we are talking of service delivery and not sales of commodities.   
The out-going administration in its self-prepared scoresheet at its seven-year assessment provides among other things what it considered as its achievement in the power sector that an incremental 4,000MW+ of power generating assets would be completed during the life of the Buhari administration, including the Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant, and others. This has remained a promise and the administration is rounding up. In fact, in the president’s last speech in his message to the nation during Ramadan, he was reported to have said that he would soon leave and that if he was not comfortable in his country home that he would move to Niger Republic. I think he need to be reminded that he was not supposed to go far because he will need to answer to some issues on his eight years’ administration especially on the electricity sector once his immunity is off.  
The incoming administration will have a lot to contend with in the power sector. Perhaps the first thing should be to de-privatise and return the sector to its original public utility status because the policy is a misnomer. This will require a strong political will and determination. By implication, the sector should be restructured to intently address the particular effort to provide effective services to the people at affordable cost as it was originally meant to be. This piece strongly recommends that the suggested restructuring of the sector should be focused in the said administration’s first term, ceteris paribus.   

Mokuye sent this piece from ILESA in Osun state. He can be reached on  [email protected]     and 08061645953.