Power sector is adrift, lacks policy direction – Adegbemle

THE Executive Director and Convener of Power Up Nigeria, Adetayo Adegbemle, spoke with The ICIR’s Harrison Edeh on why the nation’s power sector under President Bola Tinubu is drifting away and performing sub-optimally.


The ICIR: What’s your appraisal of the current power sector situation in the country?

Adetayo Adegbemle: The present situation of the power sector in Nigeria has been poor over and over, so it’s not surprising.

From lack of general policy direction to the serious lack of liquidity to debts to gas suppliers, and to debts to generation companies, which has now led to a dip in power available to Nigerians.


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Adetayo Adegbemle, Executive Director, and Convener PowerUp Nigeria says Nigeria's Power sector is adrift and lacks policy direction
Adetayo Adegbemle, Executive Director, and Convener PowerUp Nigeria.
The ICIR: Are you not worried that there’s no proper framework/template yet for the power sector since the new minister came on board?

Adetayo Adegbemle: Of Course, I am, and I have used every possible platform available to express this.

You heard the minister calling a stakeholders meeting in the second week of December 2023, and as we speak, nobody who attended the event at Transcorp Hilton can say specifically what they discussed, nor has the minister come up with any policy direction.

You heard the minister speak of the Presidential Metering Initiative but as we speak, nobody has seen details of the so-called initiative.

We have had multiple grid collapses that the minister has promised to investigate. He even formed a committee that nobody knows the constituents. The Minister has been speaking of buying gas in local currency, but have you seen any order or letter to the National Assembly? Right now, the power sector is adrift, and it is unfortunate.

The ICIR: Which key areas would you want him to focus on and address in light of serial problems we’re having in the sector?

Adetayo Adegbemle: It’s a double-edged sword. It’s good that the minister himself has agreed that subsidy is not sustainable. So what I would have expected from him was to see how to effect mass metering immediately, source the funds from the savings from fuel subsidy removal, and graduate to electricity tariff subsidy removal.

With that, we can now easily focus on ensuring gas suppliers are paid and improve the quality of service delivery to homes in the sector.

Ministries, departments and agencies of governments’ (MDAs) debts are another quick means of improving the sector liquidity, I would have expected that the minister would have focused on the payment of that debt, instead of borrowing to pay subsidies and other CBN interventions.

I also mentioned in the agenda that I set for the sector before this administration was sworn in that the government review non-performing agreements like the Siemens deal.

A quick win reference for the minister would have been to review the Power Sector Recovery Programme by the former minister, instead of just jettisoning the body of work like that.

The ICIR: Most DisCos are not meeting the obligations of the service reflective tariff-SRT of bands A, B, C, and D. Can we say the service reflective tariff is non-existent for now and why?

Adetayo Adegbemle: There is no way DiCcos will meet up with the obligation of SRT because they’re not also receiving enough power to distribute. So unless the situation at the Gencos improves considerably, the situation will continue.

We will still come back to the issue of liquidity to resolve this. Even the debt portfolio to Discos is staggering.

The ICIR: Why are we always failing with the issues of mass metering despite several interventionist initiatives? Any lessons for that?

Adetayo Adegbemle: Let me say this, we have refused to first of all see and treat the power sector as proper business, so many of the interventions, like the mass marks, are still being seen as patronage.

Once the planning fails due to the mental approach to it, the scheme has been doomed from inception. We have seen portfolio companies that have been involved in mass metering, and we have seen companies that don’t have capacities taking more than they can chew.

The important lesson here is that first thing, any intervention in mass metering that just throws money at the problem will never work.

We need to build checks and balances into any scheme we want to run, I would expect that we focus on funding production end, building a proper ecosystem with the funds available, creating meaningful employment for Nigerians through such intervention, and not just funding a company in China in the name of mass metering.

The ICIR: Many Nigerians want metering, why is it so difficult for Nigerians to access metering with concerns over arbitrary charges?

Adetayo Adegbemle: I have highlighted reasons I believe the prior efforts failed. We don’t manufacture these Meters in Nigeria, so basic things like forex affect prices. Poor implementation of policies is another major challenge we have. We also have a major problem with enumeration in Nigeria. We don’t even have an idea of how many people are connected to the national grid.

We need to sort our priorities out first.

The ICIR: The Minister of Power held a meeting with his counterpart in the gas industry on gas pricing in naira, does this solve the perennial gas problem concerns?

Adetayo Adegbemle: It is a good idea, but it is not one we can just parrot, there are long drawn-out actions that should be followed before we can even get to that point. Is the minister bringing in investment in naira as well? Why would he think people who invested in dollars would want to sell in naira?






     

     

    Hope we won’t also be playing with legal tussles. Let the minister approach the right offices and the National Assembly to see what can be done legally. But we will still have to pay the over N3.5 trillion debt being owed to the gas suppliers first.

    Buying gas in naira is however not an immediate solution.

    The ICIR: What’s new with the amended Electricity Act and how can this develop the sector further at the sub-national level?

    Adetayo Adegbemle: I will skip this. it can’t be covered in this interview; it will be an interview on its own.

    The ICIR: What’s your general perspective on the Siemens deal? Are you not worried that Nigeria could see a repeat of failed power projects despite some investment commitments?

    Adetayo Adegbemle:  My position is known in the power sector on the Siemens deal. It was a badly put-together idea. It was never intended to be a good one for Nigeria, and nothing has changed about it till now. The Federal Government should just cut our losses and pull out of that deal.

    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.

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