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Promoting Good Governance.

Fashola blames NESI over dependence on foreigners to fix power problems

THE Minister of Power, Works and Housing, Babatunde Fashola, on Thursday, decried the Nigerian Electricity Supply Industry (NESI) for being ‘heavily dependent’ on foreigners and foreign equipment to fix power problems in the country.

Fashola expressed his concern in Abuja at the stakeholders’ workshop organised by the Nigerian Electricity Regulatory Commission (NERC), on the minimum specification of Nigerian content and requirement for labour the power sector.

NESI, which is being regulated by NERC has a structure comprising of the Federal Ministry of Power, NERC, Electricity Generation Companies (GenCos), Transmission Company of Nigeria (TCN), Electricity Distribution Companies(DisCos) and Nigerian Bulk Electricity Trading Plc.

Others are Gas Aggregator Company of Nigeria, Nigerian Electricity Management Service Agency (NEMSA) and other current 23 grids connected, generating plants supplying power in the country.

According to NERC, NESI has undergone fundamental changes over the past few years with the implementation of the government’s reform programme reputed to be one of the most ambitious privatisation exercises in the global power industry with a transaction cost of over three billion dollars ($3.0bn)

However, the Minister frowned at the already intensified trend such that most transactions in the power sector are carried out in foreign currencies, with clear impacts on foreign exchange.

Structure of the Nigerian Electricity Supply Industry (NESI)                                                 Picture Source: NERC

“The NESI is heavily dependent on imported human resources, material, equipment and services. It is consequently vulnerable to foreign exchange availability and rates, to the extent that contracts for gas and generation are denominated in foreign currency.

“It is time to systematically develop Nigerian capacity and content in the industry for its long term growth and stability,” Fashola, who was represented by the Ministry’s director of procurement, Ahmed Abu stated.

The event also doubled as a platform to exhibit local power products and services for the Nigerian electricity supply industry.

Meanwhile, NERC as an independent body, established by the Electric Power Sector Reform Act of 2005 is meant to undertake technical and economic regulation of the Nigerian electricity supply industry.

The Executive Order 5 signed by President Muhammadu Buhari on Monday, February 2018 is meant to increase local contents, especially in public procurement in areas of science, engineering and technology.

Aside, the Order is expected to promote the application of science, technology and innovation towards achieving national developmental goals across all sectors of the economy.

“The objective is to deliberate utilise Nigerian resources, goods, works and services in the industry. Opening up of the NESI at all levels of its complexity to involve Nigerian people and expertise, building capacities to support increased investment leveraging on existing and future investments to stimulate the growth of Nigerian and Nigeria –located enterprises among others,” said Fashola.

The Executive Order further prohibits the Ministry of Interior from issuing visas to foreign workers whose skills are readily available in the country.

Prominent Nigerians have also reacted to the Executive Orders especially Number Five with the emphasis of its potential to create jobs and restore the nation to the path of greatness.

The Minister of Science of Technology, Dr. Ogbonnaya Onu believed its full implementation would reduce poverty and unemployment.

Femi Falana, a prominent Nigerian lawyer shared similar view with the Minister applauding federal government’s recognition of the role of Science, Technology and Innovation in developing all sectors of the economy.

However, his concern was faithful and efficient implementation of the law.

In contrary, former President of the Nigerian Bar Association, Wole Olanipekun (SAN) said the Orders are in competition as a law with the constitution of the country while that of Order six, in particular, infringes on the fundamental human rights.

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