by Frank Onuoha
Months after, the much touted “thousands of jobs” and “mini-power” projects that will generate the miracle mega watts are still illusory.
The United Nations is demanding that within 60 days the Nigerian government come up with answers to eight questions on increase in electricity tariff without corresponding increase in generation. These questions are contained in a Joint Letter of Concern sent to President Goodluck Jonathan. The letter which was authored by Ms. Magdalena Sepulveda Camona, Special Rapporteur on extreme poverty and human rights and Ms. Raquel Rolnik Special Rapporteur on adequate housing observed that “at the end of 2012, Nigeria with a population of about 160 million people only generated about 4,000 megawatts of electricity, which is ten times less than some other countries in the region with less population.”
The latest intervention comes at the behest of a petition in lodged in 2013 by a coalition of human rights activist, labour, journalists and lawyers led by Socio-Economic Rights and Accountability Project, SERAP. In the petition, the group alleged that the implementation of the Multi-Year Tariff Order II, MYTO II, by the Nigerian Electricity Regulatory Commission, NERC, in June 1, 2012 is “having detrimental impact on the human rights of those living in poverty in the country”
Under the MYTO II plan Nigerians are to anticipate a yearly increase in electricity tariff till 2016. Under the plan, consumers in different parts of the country will pay improved charges that vary according to the rating of the distribution zone where they reside. Very poor urban and rural dwellers are required to pay the same rate throughout the country under the new dispensation. “These categories of consumers,” according to a Punch Newspaper report, “will not pay any fixed cost and their tariff of N4/kWh will not vary for the next five years. However, R2 customers, the category that majority of electricity consumers belong, will have to pay more for the fixed and energy charges.”
Arguably the one notable reason the Federal government gave for introducing MYTO, was “to attract investors to invest in the power sector.” A fall out of the introduction was the news in September of 2013 that some unnamed Chinese companies signed a deal worth $1.3 billion with the government to build power plants and again in February 2014 General Electric, GE, an American multinational conglomerate corporation, signed a deal with a Nigerian bank, Stanbic IBTC, to invest $350 million in the country’s power sector.
These investments were signs of the good times to come, as several government officials made many to believe. Dr Ngozi Okonjo-Iweala, the finance minister, was quick to observe the “thousands of jobs for engineers, technicians and artisans during the construction phase” that will be created as a result of the Chinese deal. Dr. Olusegun Aganga, the country’s trade and investment minister elaborated that the GE deal will generate mini-power projects and “help the economic activities in the country.”
Months after, the much touted “thousands of jobs” and “mini-power” projects that will generate the miracle mega watts are still illusory. Unemployment is assuming catastrophic levels with 500,000 job seekers jostling – even losing their lives- for 3000 positions, seven of the eleven power plants that were privatized are either in the process or have shut down completely by January, 2014 and importantly electricity generation continues to plunge downward. Power generated by Nigeria’s power plants dwindled from 4517MW in December to 3563MW in December 2013, a drop of 954MW within a year. In 2014, the most the generation has gone is 4000MW.
Since 1999, well over $20 billion has been dumped on the power sector with almost nothing to show. Going by estimates by World Energy Outlook in 2010, $20 billion is more than a quarter of what is needed to provide adequate and constant electricity to all Nigerians. In 2013 an NOI poll noted that, over 130 million Nigerians – about 81% of the population- do not have access to electricity in the 21st century. What this means is that over 130 million Nigerians are generating power for themselves despite the fact that government continues to belabour the citizenry with huge electricity bills for services not rendered and squander same money on nonexistent power projects.
In view of the present realities, to say that MYTO is unjustifiable may be putting it mildly. It is injurious and tantamount to reaping where one has not sown. Some of the questions contained in the UN letter are particularly instructive. For instance, “what kind of impact assessments were conducted to gauge the potential impact of the electricity tariff increases on the human rights of people living in extreme poverty in Nigeria?” In May 2013, investigations conducted by Sweetcruderevealed that the Federal government through Power Holding Company of Nigeria, PHCN, generates about N3.41 trillion ($19.6 billion) annually through outrageous electricity bills, which is not commensurate with the amount of power supplied to consumers. The analysis showed that the N3.41 trillion is 110.5 per cent higher than the N1.62 trillion budgeted for capital expenditure in 2013 and 43.28 per cent higher than N2.38 trillion budgeted for the recurrent expenditure in the same year.
The revelation comes barely one year after the increase in tariff.
Another salient question is, “what mechanisms exist to ensure transparency and regular monitoring over the use of tariff revenue within the government? What mechanisms are available to address allegations of corruption, or other complains?” The whereabouts of the $1.3 billion, $350 million and other investments in the sector since the implementation of MYTO is of particular significance here. The jobs are yet to materialize; over 30, 000 workers in the power sector have been sacked, this is in spite of the agreement the government reached with the unions.
If and when the government eventually replies within the 60 days, one expects it should not be the usual steam blowing, empty grandstanding with list of “completed” projects and “democratic dividends.” It should rather spur a deeper reflection. I do not expect that the questions will lead to a revocation of the MYTO policy or the privatization, however I believe a great many Nigerians will want to see an improved power sector.
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Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.