Guest Columnist By Olaleke Alao
The electricity crisis in Nigeria has now evolved from an infrastructure challenge and turned into a crisis. It is now a national psychological illness. It influences business confidence, how people survive, industrial productivity, education, health care, digital innovation, foreign investment, and even the legitimacy of government itself. Nigerians have been swinging between promises, calls for reform, road maps, emergency declarations, restructuring of sectors, tariff changes, privatization initiatives and reshuffle of ministers for decades, but darkness has been one of the common themes in national life.
In view of this, the recent change in the Minister of Power by President Bola Ahmed Tinubu has become a topic of much discussion. Adebayo Adelabu’s departure and Joseph Olasunkanmi Tegbe’s appointment as the new Minister of Power is not just a mere personnel change. It is a sign of change in the philosophy, style of governance and focus for reform in one of the most troubled sectors in the Nigerian State. The issue Nigerians have is whether this is yet another cosmetic political tweak or if this marks a shift towards a more radical solution to electricity problem in Nigeria. The question is more critical given the political sentiments that had been raised by President Tinubu himself during the 2023 campaign season when he made a public statement that if he did not provide stable electricity within his first term, Nigerians should not vote him the second term. That was a strong statement! It was courageous. It was also a political no-no! The President linked the electricity supply to his presidential re-election power for the first time in recent political history in Nigeria. Governance has come to stay now.
Electricity is not just another election campaign issue in Nigeria. This is the brain of the development. Darkness does not lay the foundations of any great nation. When the cost of diesel is higher than the cost of production, businesses are not competitive in the economic development of any country. A society that has sustainably improve health care delivery cannot have hospitals that are using generators for surgeries. If we educate students with rechargeable lamps, and lecturers carry out research using fuel-powered electricity, then such educational system will not be able to compete in the global arena.
Today, Nigeria is caught in one of the most perplexing paradoxes in the world, a country with abundant gas reserves, blessed with the sun, blessed with fresh water, with a very energised youth and yet cannot consistently power the people with electricity. This paradox has hurt the public trust in the governance system. Thus, each new Minister of Power assumes the job with technical duties and the emotional disenchantment of millions of people.
A lot of the rhetoric that Adebayo Adelabu used was expansionist. Growth of generations, extension of transmission lines, installation of new substations, grid enhancements and future megawatt goals were common topics in his administration. The predictions were not lacking of any sort. News of more generation capacity was made. Pledges were made about improvements to transmission. Coordinating Energy and making significant infrastructure investments were discussed. However, the common Nigerians had other experiences given these forecasts. Grid collapses persisted. Billing and tariff banding continued to be an issue that was a national scandal. Small businesses kept closing their doors as diesel prices proved to be their killer. Energy costs were an issue for manufacturers. There was still a divide between rural and urban areas. Even though its a constitutional right, the celebration of electricity was still treated as a time of the year (Up NEPA like the sound of Happy New Year). The gap between government promises and actual experiences undermined trust in the government. The main problem with the previous strategy was not that it was not intended, it was simply the lack of systemic credibility that was apparent. Nigerians were increasingly unhappy with the lack of results in the power sector, preferring it to be handled with announcements. Sure enough, public fatigue was the outcome.
Mr Joseph Tegbe’s presentation seems to have undergone a dramatic turn. This new minister is not only seeing the problems less through the lens of projections and expansion plans, and heightened capacity, but more through the lens of institutional and financial failures, governance and accountability failures, and failures as a whole. This is a major shift of thinking. The issue of power problems in Nigeria has been discussed largely as technical or engineering issues; increase power generation, increase transmission, and build more power plants. But the crisis goes far beyond insufficient electricity generation. The actual problem is that the Nigerian electricity market is ill-structured and there are a lot of problems along the value chain.
Huge debts are owed to power generating companies. There is not reliable payment from gas suppliers. Distribution companies are still in very poor financial condition. The billing system is not trusted by consumers. The energy grid is fragile and energy theft is rife. Metering gaps still exist, political interference in enforcement is common, tariffs are sensitive to political factors, and the regulatory climate is uncertain. Politics
The reframing of the crisis by Tegbe points to a more technocratic way of tackling the problem. He is stressing on four major elements which could constitute a significant shift in policy for the Nigerian power sector, namely liquidity, accountability, market discipline, metering, debt restructuring, transparency and institutional reforms. The question of whether Nigeria can produce more electricity is not this time the only question. The more pertinent question now seems to be, how to establish a power market that is able to operate sustainably on its own? That is the appropriate question to ask.
The power problem in Nigeria is not to be addressed with populism. The not-so-pleasant fact that few politicians are not willing to admit publicly. Investment is needed in order to have stable electricity. Investment requires confidence. You cannot build confidence without cost recovery. Cost-recovery means that an appropriate commercial price is set. This is where the politics starts to go haywire. For years, governments have been trying to achieve an unattainable balance, politically acceptable tariffs and huge infrastructure investments from private operators. Numbers just do not add up! No serious long-term capital is invested in a sector where revenues are fluctuating; debts are growing and never going to be paid back, and consistency of regulations is not in the picture. But Nigerians have a right to their rage as well. People are being asked to pay more for that service that they do not always get. This establishes a risky sense of trust that is not present. This sets up a risky feeling of lack of trust. The actual problem is not so much about tariffs, though. It is trust. Many Nigerians would grudgingly embrace painful changes if they see any tangible improvement. However, a lack of luck and hope has worn down over the years.
The early thrust of the new minister’s reform is more substantive than past ones, but there are areas that needs to be better expressed. These will include distribution companies, discentralized electricity and demands-side efficiency.
Olaleke Alao, writes from Maryland, USA
