July 28, 2022

Expect more system collapse, poor electricity supply — Labour

Govt must alleviate pressure of losses in manufacturing sector  — CEO, Magnate Comms

By Victor Ahiuma-Young

General Secretary of the National Union of Electricity Employees, NUEE, and a Deputy President of Nigeria Labour Congress, NLC, Joe Ajaero, in a chat  on the crisis in the nation’s power sector, warns Nigerians to expect more system collapses and power failures among others.  Excerpts:

THE corruption in the power sector is second to none. Obasanjo government spent over $16 billion. If Nigeria has no pole or wire, with $16 billion, at the then international global practice of one billion dollar per 1,000MW, we would have had about 16,000MW. But all has gone down the drain.

Read Also: $16bn Electricity Project: Sowore knows nothing, says Atiku; just explain power failure, he reacts

Between that time and now, all that have been spent have gone down the drain. Nothing is working. The operators of the power sector in Nigeria lack competence. From the top most to the least in this country, they have no idea on how to address the challenges of the sector.

At the time they privatised the power sector in Nigeria, they sold it to themselves. That is the worst crime anybody could commit.  You can  ask them, who are the owners of Ikeja Electric, or Enugu Electric? They used pseudo names to purchase those companies. There  are three basic concepts required for privatisation.

The investors must have the financial muscle and technical competence. This  means the capacity to have ran the power sector before and the capacity to attract FDIs, (Foreign Direct Investments). First and foremost, you must have a foreign partner, from where dollar will flow in.

But since they privatised almost nine years ago, no single dollar has entered into this country. But they gave them clean bill that these people were technically and financially capable and that they were going to bring in FDIs.

Banks take-over

Today, all these indices came to zero. What we are seeing now is that the banks they took loans from are now taking over the DisCos. But we warned them at the beginning that you can’t take a loan from a Nigerian bank, because there is no investment. They did not fault us in all their debates but they went ahead and gave the power sector to their friends. As we talk, over six DisCos have been taken over by banks.

These are Port Harcourt, Ibadan, Benin, Abuja, Kano and Kaduna DiSCos because they obtained loans from the banks and could not pay back.

We have written to concerned authorities, we have given them ultimatum, and if answers are not provided, we are going to shut down this country. Did these investors use the DisCos as collateral?    They must have taken loans before they bought the DisCos. Maybe they did not  provide collaterals before taking loans to buy the DisCos. Did they use the shares of the DisCos as collaterals?

The Central Bank of Nigeria, CBN, must tell us whether people take loans without collateral or provide collateral before loan. The DisCos can’t be the collateral to take loans before they  (DisCos) were bought. These are parts of the deception in the privatisation. 

We are saying the banks cannot run the power sector. They lack the financial and technical competence to run the power sector. We say they are not welcomed.

Nigerians ask on daily basis, why is the power sector not working?   The power sector will not improve. Let Nigerians know that running the power  sector is a highly technical, whether in the  generation or the distribution aspect that the banks running it now lack the competence. Nigerians should not  expect improved power supply, but more system collapses.

It  will continue because there is nobody to fix it. When they privatised, the government said they would review the exercise after five years. At the end of five years, we wrote letters to them for a review but they have refused. 

More problems coming

They want to die on the policy of privatisation and the likes of Abubakar Atiku are telling us they want to privatise more. His economic agenda is dead on arrival. It centres on  giving  what is collectively owned by all of us to an individual who cannot manage it.

They sold the then NEPA for N400billion, government gave those that bought it N2Trillion to maintain it. The meaning of this is that the seller is also the buyer. He is simply using that to give himself government money.  Do you know why there is going to be more problems?

Between now and the general elections, government officials and political parties will sell some of these companies that  have now been taken over by banks to the new cronies. Today, it is  the Transmission Company of Nigeria,TCN, they are secretly planning to privatise, but we are waiting for them.

They brought Siemens and entered into billions of dollars contract with Siemens. We told them that Siemens would not perform. Today, we have been vindicated, Siemens has  not performed and it has not refunded the money collected.

They gave Siemens contracts to reinforce the lines to have the capacity to transmit about 7,000Megawatts, MW, whereas we have reinforced the line to transmit 10,000MW.  What that means is that free money was given to Siemens. We have stopped talking because nobody is in-charge in the power sector and as nobody is in-charge, the sector will not grow.

And as far as the power sector is not growing, no sector of the economy will grow. There is nothing you can do without power.  If the economy must grow, the power sector must grow. If the power sector grows the economy grows and if the government keeps quiet that it doesn’t concern them and that the privatisation exercise done nine years ago is working, then the economy will slide till it collapses.


When NEPA was generating 4,000MW, they deregulated the sector.  We said let the private sector generate their 4,000MW, to make it 8,000MW. They said NEPA is ineffective, we said yes. If the private sector brings its effective, 4,000MW with our ineffective 4,000MW, Nigerians will enjoy stable power. What did they do?

They split one company into 18 entities with four Executive Directors, five General Managers, and with 18 entities, their salaries were doubled. The same 18 companies they created are still generating 4,000MW. The NEPA they said was inefficient, they appropriated them in form of privatisation. They shared it and didn’t build their power plants.

All the people they licensed, none of them have built power plant. What we see is government building power plants and handing over to them.  None of them have the financial muscle to build a power station. They are living on government’s  patronage. That is why  the system is in crisis.

The power sector will soon collapse completely if government does not have the political will to take decision on what is happening in the sector. No country in the world has developed with a private sector driven power sector. It is post-industrialisation. There is no private sector that wants to wait or keep his investment for 10 years without profit.