ADETAYO Adegbemle is the Executive Director, and Convener PowerUp Nigeria, an electricity consumer right and policy advocacy organisation. He spoke to HARRISON EDEH of THE ICIR on how effective regulation can drive efficiency and investor confidence in Nigeria’s power sector.
How to use effective regulation to drive efficiency in power sector
The ICIR: What are the mistakes that we made in our power Privatisation since 2013?
Adegbemle: Interesting angle to look at the issue, I would not agree we made any particular mistake with the Privatisation.
The outcome of the Privatisation is definitely a reflection of the way the nation is, and I have argued this on several platforms already, we cannot really solve the electric power sector challenges without addressing the larger leadership problems Nigeria found itself in.
We should not forget quickly the documented massive corruption in old National Electric Power Authority (NEPA) which led to the Power Sector Reforms, of which Privatisation is just part of.
We cannot really solve the electric power sector challenges without addressing the larger leadership problems Nigeria found itself in.
And apart from the Goodluck Jonathan administration that appears to want to do anything close to the blueprint by the Obasanjo Administration, everyone has pretty much been coasting and freestyling.
The ICIR: How has the problems dragged down our efforts to have efficient power supply?
Adegbemle: Again, the Country as a whole is adrift, because of leadership problems. No serious leadership would speak of solving the economic challenges without electric power. This is what drives the industries and make them competitive with imported products.
No serious leadership would speak of solving the economic challenges without electric power.
Industries are closing down everyday because they cannot be powered, or compete with imported goods, jobs are being lost everyday, and the population keeps growing. We turn out graduates every year when the Academic Staff Union of Universities, (ASUU) and Government agrees.
So, for as long we have a leadership that is not committed or still approach issues with lackadaisical approach to issues, the problems in the power sector will persist.
THE ICIR: Can we look at specific issues, and mistakes that we made in the sector that we are currently repeating?
Adegbemle: I will like to pick Metering as the first example. One of the agreed performance indicators was that the Metering Gap will be closed within three years of Privatisation. What we have had instead is a situation where no one has been responsible for anything.
We have the regulators that are unable to implement regulations that they have been entrusted with, we have the Distribution companies running from lack of funds to invest to excuses of Forex, to whatever.
We have the regulators that are unable to implement regulations that they have been entrusted with
When we in PowerUp Nigeria, pushed for the Independent Meter Service Providers, with the former Minister of Power Works and Housing, Babatunde Fashola taking to the idea and asking Nigeria Electricity Regulatory Commission (NERC) to come up with something, NERC eventually came up with the Meter Assets Providers regulation.
When the Meter Asset Provider (MAP) regulation came out again in 2018, we warned about the pitfalls, which again falls into the hands of the Discos to implement.
Till today, the Metering Gap is nowhere close to being closed.
Even the Free National Mass Metering Program that the Federal Government tried to use as palliative for the Service Reflective Tariff, has entered stormy waters again.
I am sure you are aware that the Central Bank has frozen bank accounts of 10 of the Meter Assets Providers pending investigation into the allegation of diversion of funds meant for the National Mass Metering Programme (NMMP) again. Would you also say this is a problem with privatization?
THE ICIR: What are the specific problems, lapses of the value chain players- The government, Discos, Gencos, TCN?
Adegbemle: I have mentioned this too on several occasions. Everybody in the value chain is guilty. From Government who has not been able to put round pegs in round holes, to regulators that has repeatedly shown they are bereft of ideas. Prof. James Momoh’s time as the Nigerian Electricity Regulatory Commission (NERC) Chairman will go down as the most inglorious, having a dream for constant power supply that was never achieved even after his two years in office.
The Discos have repeatedly shown they simply lack the desire to do anything different. Even though the criteria for winning the bid originally was financial capability subsequent and recent events has seen most of the Discos being taken over by the Banks they are owing.
The Discos have repeatedly shown they simply lack the desire to do anything different.
The Generation companies are complaining of lack of Gas, and when they get gas to produce, they don’t get paid. Sigh!
The part we also have refused to acknowledge is the impact of the tanking economy on Consumers on the financial health of the Power sector.
THE ICIR: What are the mistakes we made in privatisation that we are repeating currently.
Adegbemle: Unfortunately, I am not one of those who preaches reversal of the privatisation process. Those pushing for it mostly are those who lost out with the outage of NEPA and its cesspit.
THE ICIR: Would you have preferred reversal of the Privatisation exercise?
Adegbemle: How can we reverse? When we are pushing for further breakdown of the grids and creation of multiple energy markets?
No, not a question I will entertain.
I will rather that we ensure an independent Regulatory Commission. I have argued that the present way of appointing “a friend” into the headship of the Commission will continue to be a drawback on the Commission.
I have argued that the present way of appointing “a friend” into the headship of the Commission will continue to be a drawback on the Commission.
Why not shortlist a couple of people to make presentation to the National Assembly on what ways to improve our power sector, thereby testing their knowledge and readiness to carry out the reforms the Power Sector really needs.
That way we at least have an idea of what to expect. The only person that has tried to show that NERC could have some bites when he was acted as the NERC Chairman was not allowed to become the substantive NERC Chairman.
THE ICIR: Could there have been possibility of the CBN making any mistake in the manner of its interventions in the power sector?
Adegbemle: Honestly, the CBN several interventions is probably the only thing keeping the power sector running. And unless we are able to carry out an independent audit again, we would not be able ascertain if the money is being spent right, or not.
Look again at the CBN obtaining injunction to freeze the bank account of 10 of the Meter Asset Providers (MAPs) pending investigation based on the allegation of diversion of funds.
Instead of the MAPs to open their accounts to scrutiny, or even head to court to challenge the CBN freezing of their accounts, they are running up and down to change the narrative. We are waiting for the investigation from CBN. They said 180 days, we wait, Two weeks is gone already.
You can also see that the Regulators could not do anything about how the Discos were spending until the CBN was able to escrow their accounts.
You can also see that the Regulators could not do anything about how the Discos were spending until the CBN was able to escrow their accounts
You will recall also how the Discos ran to court when the Governor Nasir El-Rufai Committee asked their accounts be audited, which incidentally is one of our recommendation to the Committee.
Again, we need a strong leadership.
A specific instance to this development is the recent Court case between the CBN and some Discos. What could have been the failures of CBN in this process?
THE ICIR: Is there possibility that the capacity of the Discos or even the Meter Asset Providers were not ascertained before giving them monies for metering interventions.?
Adegbemle: The Intervention money for Metering was not given to the Discos, it was given to the Meter Assets Providers.
most of these MAPs lied on their capacity, and it definitely also affects their capacity to deliver
One thing I can tell you for sure is that most of these MAPs lied on their capacity, and it definitely also affects their capacity to deliver. I have heard of one of them that will supply same Meters to different Discos, doing magic numbers of installations within days.
Let us wait for the 180 days CBN asked for and hopefully they will release their findings.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.