(BACKPAGE) Trading power companies on the bourse

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BY LEKAN SOTE

Uba Group

If electricity generation, transmission and distribution companies were listed on the stock exchange, it is possible that the discipline of the marketplace would compel them to perform more optimally and deliver adequate electricity to the homes and businesses of Nigerians.

This is the default argument of those who believe in the capitalist doctrine of a market-driven economy that takes the government out of business and retains it in the hands of the private sector.

The assumption of the protagonists of a market-driven economy is that the profit motive that propels the efficiency and effectiveness that is required to make money will drive the needed service delivery that consumers, who are willing to pay the price, desire.

But, of course, those who profit from the government’s retention of 60 per cent equity in electricity generation companies, 100 per cent equity in the Transmission Company of Nigeria and 40 per cent of distribution companies, will not like this idea. It does not favour their preference to freeload on the system.

And this is the best-kept secret by the government, from the days of President Goodluck Jonathan, who “sold” the companies off, to the Buhari administration that is left holding the can of the “lemons,” whilst also protecting those who profit from this prebendal arrangement.

Those who hold sinecure appointments do not care even if the entire Nigerian populace –their residences and their industries — perpetually lack access to adequate electricity. The truth is that the selfish interests of these people have been translated into government policy.

These leeches concluded, a long time ago, that because electricity is an essential service needed by the people, they would hold on to its levers even if it does not provide the services it promises.

They have played every game possible to ensure that the government remains in the electricity sector loop. That guarantees them easy access to board appointments, employment of their unqualified wards and contracts for their non-competitive businesses.

When investors from North America, Western Europe and Asian countries demanded the privatisation of the electricity sector, in order to guarantee more efficiency, those who have always enjoyed the perks of government-owned enterprises thought of a way out.

First, they thought of the halfway house commercialisation, a mere name-changing gimmick that renamed National Electric Power Authority, which cynics rechristened “Never Expect Power Always,” to Power Holding Company of Nigeria, which guaranteed the stranglehold of the buccaneers on the electricity sector.

Then, when they figured out how they could preserve their access to the commonwealth by taking advantage of the law that allows the government to retain a portion of the equity of the operators in the electricity sector, they agreed to privatise. That guarantees the easy flow of their gravy.

“You know too well that the President and Commander-in-Chief of Nigeria’s Armed Forces is the Chairman of the Board of NNPC Limited. He also appoints its Group Managing Director and all the Executive Directors. If you wonder why petrol is scarce these days, the answer is in this confusing model”

Of course, you know that the domestic investors in the electricity sector neither possess the financial nor the technical competencies necessary to successfully run the companies they priced off the government.

A few years ago, an expatriate in one of the electricity distribution companies, who hardly knew what he was talking about, was brought before a panel of the National Assembly, to explain the demon that took over the electricity sector.

He barely made any sense, as his enablers, who hardly understood whatever gibberish he was muttering, looked lost and definitely out of their league. They said nothing, almost didn’t breathe. Obviously, they didn’t want to expose their “palpable” ignorance.

To distract Nigerians from scrutinising the activities of the failing electricity sector, the political elite, who also doubles as the business class, occasionally talk about asking a Canadian or German company to come and give the sector a shot in the arm.

In December 2019, the Federal Executive Council voted $1.9 million for what the Federal Government described as the first phase of the Presidential Power Initiative, with the pretext to upgrade the national grid and deliver more than 7,000 megawatts of electricity to Nigerians.

Whereas there is a claim that Nigeria’s electricity generation companies can produce about 12,000 megawatts of electricity, the electricity produced in December 2022 peaked at an uninspiring 4,700 megawatts.

“CBN"

This dismal performance was recorded after the government took delivery of certain equipment, including transformers and substations, in September 2022. After dropping the name of Siemens, the German energy giant, it got even worse in January 2023.

It’s regrettable that the government has not prioritized, with utmost urgency, its agreement with Siemens, to deliver 25,000 megawatts of electricity per day. Siemens is probably wondering if it will ever truly serve the purpose the government keeps assigning to it, whilst not allowing it the freedom to operate with private sector players.

Those who work so hard to prevent the electricity companies from working in the interest of the Nigerian citizens are also the same people who transformed Nigeria National Petroleum Corporation, a parastatal, into Nigeria National Petroleum Company Limited, the so-called commercial enterprise that operates like a parastatal.

You know too well that the President and Commander-in-Chief of Nigeria’s Armed Forces is the Chairman of the Board of NNPC Limited. He also appoints its Group Managing Director and all the Executive Directors. If you wonder why petrol is scarce these days, the answer is in this confusing model.

Those who run NNPC Limited and (indirectly) run the Gencos, Discos and the Transmission Company of Nigeria without any tangible results do so with the mindset of what the Yoruba call “Oga ta, oga o ta. Owo alaaru a pe,” which means that the liability to pay the labourer is sacrosanct even if the boss is running at a loss.

A friend, an incurable pessimist, has sworn with every fibre in his being that the Federal Government and those who run the oil industry from the dark crevices of corruption and patronage will never allow NNPC to be completely privatised.

And all the signs point in the direction of non-compliance with that evil plan. You can be too sure that the oil finds in Bauchi and Nasarawa States of Northern Nigeria will further consolidate NNPC Limited in the hands of the oligarchs of Nigeria.

Abubakar Aliyu, Minister of Power, has said that his “immediate focus is how to create liquidity in the electricity market; improve services in terms of hours of supply, billing transparency and accuracy; and wider access to electricity (supply) through effective policy, regulations and cooperative engagement with public and private sector operators.” That sounds more like the mission statement of a regulatory agency.

So you then wonder why the government should retain a substantial equity stake in all the sub-sectors of the electricity industry. This model puts the government in the position of two-faced Janus who hunts with the foxes, but also runs with the hares.

But back to the point. The government should stop hiding under the argument that because electricity is strategic to national development, it should not be left entirely in the hands of the private sector.

Though telecommunications is strategic to the security, social relations and economic wherewithal of Nigerians, it was privatised. Though none of the telecoms is listed on the stock exchange now, most of the assets of the industry are in the hands of private investors.

And no compromise has been suffered by the Nigerian economy or its security system. If anything, the economy has been enhanced many times over.