Nigeria’s Senate President, Ahmad Lawan, has called for a review of the privatisation of the country’s power sector.
Mr Lawal made this stance known on Tuesday during the deliberation of a motion on Nigeria’s power sector recovery plan and the impact of the COVID-19 pandemic.
His comment comes in the wake of public outcry on the inefficiency of the power sector to provide electricity to Nigerians.
The power sector was privatised in 2013 with the distribution and generation sub-sectors split and sold to private owners. This was aimed at enhancing the power distribution in the country.
Only the transmission component, through the Transmission Company of Nigeria, remains a public property.
Since November 2013 when the Power Holding Company of Nigeria (PHCN) successor companies were handed over to their new owners, Nigerians have expected improved supply of electricity, with government targeting the generation of 10,000 megawatts of electricity daily.
This has, however, not been the case.
He had said his administration’s decision to review the power sector privatisation is to open up the sector for investors with the financial capacity and technical expertise to inject fresh investments to turn the sector around.
However, various public officials including the immediate past power minister, Babatunde Fashola, and his successor, Saleh Mamman, have spoken of government’s dissatisfaction with the performance of the private electricity companies and hinted at a review of the privatisation.
Speaking during plenary, Mr Lawan said the privatisation has not been successful.
“If we leave them for the next ten years there would be no power in Nigeria,” the senate president said.
“We gave them our common patrimony and they still come back as DisCos and GenCos to look for money from the public.
“The privatisation has so far not been successful. We expected efficiency, effectiveness in power supplies but probably on both sides, maybe the purchase agreements were not adhered to on both sides.
“What is obvious is that the DisCos particularly have no capacity at the moment to supply us power. The GenCos have challenges too. It is not good that we give them money we sold – these are businesses. If there are areas we must intervene as a government must be seriously justified.
“The way it is I think there is need to review this privatisation to see what has happened. Something is certainly not right. In the event that this thing does not work properly, there will be need for the government to look into it,” he said.
Presenting the motion, the sponsor, Gabriel Suswam, empahsised the importance of power supply as a critical factor in the management of COVID-19 patients who are kept in treatment centres.
The impact of the pandemic on the power sector has necessitated the need for the Senate to ask the federal government to include the sector in the disbursement of the proposed COVID-19 fund, he said.
He also said stable power supply is a critical factor in the management of COVID-19 patients and the implementation of the proposed upgrade of healthcare facilities across the country after the pandemic.
“Prior to the outbreak of the COVID-19 pandemic, the Nigerian Electricity Supply Industry (NESI) was already facing teething operational constraints including the absence of cost-reflective tariffs, inadequate enumeration and metering of consumers, limited access to funds for investment, poor revenue generation and high levels of aggregate technical commercial and collection (ATC & C) losses, Generation Companies (GenCos) were owed 72 per cent of their revenue in 2019 while the Distribution Electricity Companies (DisCos) reported average ATC &C losses of about 41 per cent in the same year.
“All these constraints prevented the NESI from performing optimally across the power value chain.
“The pandemic has further impacted negatively on NESI as the DisCos reported a 50 per cent loss of their average monthly revenue collection for the months of March and April 2020 respectively even as the Federal Government continues to harp on the need for a stable electricity supply,” Mr Suswam, a former Benue State governor, said.
The Senate thereafter, urged the Ministry of Finance to include the power sector in the disbursement of the proposed N500 billion COVID-19 Crisis Intervention Fund in order to ameliorate the financial hazards and operational challenges such as metering of actual consumers.
It mandated the Senate committee on power to investigate all federal government interventions in the power sector since the privatisation of the sector with a view to ascertaining the adequacy of such interventions and their desired impact and to report back within four weeks.
The committee was also mandated to probe all market participants in the power value chain and ascertain the level of corporate governance compliance in the NESI and report back within four weeks.
The lawmakers called on the Central Bank of Nigeria to allow operators in the power sector access to foreign exchange for procurement of equipment and materials.
The lawmakers urged the federal government to consider additional tariff support to the electricity firms and also urged the government to suspend any planned tariff increase.
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