Power Sector Privatisation Policy: A Misnomer

Nigeria Electric Power

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.  

The government… is expected to fund the organisation in terms of providing it with…all that is needed to enable the organisation deliver electricity services efficiently to the public with minimum charges… Click To Tweet

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. 

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. Click To Tweet

Mokuye sent this piece from ILESA in Osun state. He can be reached on  smkuye@gmail.com     and 08061645953. 

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