Minister of Power, Housing and Works, Mr Babatunde Fashola (SAN) recently visited Lafia, Nasarawa State, where he interracted with stakeholders in the energy sector. He also chatted with those in the housing sector. IGBAWASE UKUMBA was there. Excerpts:
How has it been with the power sector, since you assumed office?
I would like to start by highlighting the progress and milestones on our journey for incremental power which reassures us that we are on the right path and inspire us to continue with more belief.
Those milestones are represented by: A. Generated power has gone up to 7000 MW in 2017 from 3,000 MW in May 2015. B. Transmission Capacity at 6900MW in 2017 from about 5,000 MW in May 2015. C. Peak Distribution now averaging 5,000 MW in 2017 from 2,690MW in 2015.
That said, I would like to thank all of you for your contributions towards these milestones. The reason I thank you is because you are impacting the lives of Nigerians; you people in the power sector are saving them money and changing their lifestyles for the better.
They tell me that their consumption of diesel and petrol to run generators for power has reduced and the hours they run their generators has gradually reduced.
This is the result of incremental power and we must get more of it.
They also tell me that they are now monitoring how they use power and are turning off appliances that are not needed. Although this is meant to save costs, it also conserves energy, reduces waste and supports incremental power.
We are also putting together a policy position to help expand the distribution network of the DisCos and use this to distribute the 2000MW that is currently available but cannot be distributed. I also use the opportunity to call out to manufacturers to let us know where they are, how much power they need, and how we can connect you because we have 2000MW of undistributed power
So, how would you describe power supply to Nigerians in the last three months?
In the last three months, we have increased the supply of power in the dry weather and people’s experience with power was better. We must thank the Ministry of Petroleum Resources for the increase in gas supply . The cynics who used to say that it is only during the rains that power improves now see that what we have done is no fluke. Apart from Gas, other stakeholders are also taking commendable steps.
A few months ago, the Nigerian Electricity Regulatory Commission formally presented the Mini Grid Regulations and its impact is beginning to manifest.
Last month, in Abuja, through the Rural Electrification Agency, we hosted a Mini Grids Summit that is the largest ever attended in Africa with 600 participants from about 40 countries.
The word is spreading around the world as mini grids will help us connect more people and boost incremental power. We are also putting together a policy position to help expand the distribution network of the DisCos and use this to distribute the 2000MW that is currently available but cannot be distributed. I also use the opportunity to call out to manufacturers to let us know where they are, how much power they need, and how we can connect you because we have 2000MW of undistributed power.
What is the latest on the estimated billing controversy vis a vis the latest poor supply of power?
This year, we should work harder to increase our people’s access to meters and reduce the incidents of estimated billing as NERC concludes the Meter Regulations that will open up the meters supply and installation business. In the first few days of the new year, we suffered a setback to our power supply, which was caused by damage to the gas supply network around Okada.
First, I want to repeat that gas is the fuel that most of the generation companies use to produce electricity and all of us have a stake in ensuring that they are not damaged.
Secondly, I am happy to inform Nigerians that as at last night, the Nigerian National Petroleum Corporation informed us that repairs have been completed. We thank and commend them for their response. Thirdly, what remains is to test the lines and restore pressure and supply to the generation companies.
One by one, all the stakeholders from GenCos, TCN and DisCos will work to restore supply to the levels they were before the pipeline damage. From there, we will continue our journey of incremental power.
Regarding affordable housing, what are the collaborative efforts your ministry is having with private sector stakeholders?
There is multiple partnership that we are looking at. There are existing partnerships that we inherited that we are trying to overcome some of the challenges by such arrangement, in terms of service level agreements that haven’t been met by those who signed the obligations to build and transfer. There are partnerships that we are now considering; people who want to throw in land in exchange for us investing in infrastructure, so that they can then focus on raising construction finance, to develop and build. There are also funds provided by the Federal Mortgage Bank to contributors to the National Housing Fund which then uses that to buy off as off-takers, from private developers.
We are, as you know, piloting our own design, hoping to evolve a national design that can form the basis of a national programme, from which we can build an annual housing economy in the real sense of the word. So, the first phase of the buildings is almost through. We will then test it for acceptability and test it for affordability. So, there is a lot going on and I think the market will eventually respond and absorb.
What are the windows of opportunity available to private developers in government’s housing initiatives?
Well, the initiatives that Government has taken, for example, as I have said, is to first evolve a design that people accept. That has been a problem. The other thing is that, from that design, when we test for acceptability and affordability, we can then partner with the private sector people, to introduce technology into multiplying the production of that accepted design, using formwork and moulds. And, we would have the private sector make those investments and we would ultimately guarantee mortgage loans up to the end users.
But in terms of other initiatives, you know that the government has committed to ease the way and manner people do business, the cost, the time, the efficiency. So, from government’s response, we are seeking to accelerate how we respond to demands such as permits, approvals and licensing. Whatever government has to do, we want to do it very quickly because this becomes very important support tools for the private sector to be more efficient.
So, Ease of Doing Business is a very important thing and it cuts across so many things; it cuts across infrastructure delivery, it cuts across easy entry and exit of goods and persons from our Ports, it cuts across transport network across the country; ultimately, they will have an economic impact on the cost of moving building materials and personnel and all of those inputs and ultimately bring down cost.
So there is a lot that is going on. Government is also containing the macro-economic indices of inflation, exchange rate; and ultimately, it will affect interest rate in a positive way that will help bring down cost and also, Housing.
Lately, we have also signed backlog of applications for Consent to transfer land. This is the main building block of housing investments and if this has been delayed for some time, clearing the backlog of 615 is a very strong sign to the private sector, that government intends to accelerate the rate and the ease of doing business. And we intend to improve on this. Another batch of, I think, 187 has been approved by me. So it is a process that is going on; we just want to be more efficient.
Are there regulations to ensure that home buyers are not constrained by developers from getting access to purchase the vast available stock of housing surplus in the open market?
Well, I think the way to approach this is to understand that most of the private developers have contracted with the individual buyers without reference to Government. So they are mainly now regulated by private agreements to which Government really was not privy to. But you would have heard at a recent judicial training seminar, very heart-warming statements by the Governor of the Central Bank, indicating that the price of financing for Housing has to come down to acceptable rates in the single digit territory. So, that is good news to the industry in terms of government policy and government action.
You will also notice that, with the Judiciary in support, we are looking for ways and means to ease the process of recovery of possession from defaulting mortgage holders, so that business can be done efficiently. So one expects that it is for parties to then resort to remedies like Arbitration, rather than ordinary Courts; because the Chief Justice of Nigeria has issued directives that whenever there is an arbitration clause, no regular Court must assume jurisdiction
anymore.
This is the normal thing but it has not yet happened that way; but the Head of the Judiciary’s intervention is a positive action that shows, not only the knowledge of the problem but the willingness to intervene to solve it. So there is a basket of things on the radar that continue to trickle down to free up the space, to take us to what I call, ‘The daily , annual Housing Economy’, that we must build.
