Stakeholders seek reversal of power sector privatisation, mobilise against water commercialisation

Government wasted N2 trillion subventions on DisCos, GenCos, TCN

Abandoned Mambilla, Shiroro power plants would have added 4,500mw to national grid



By Edu Abade,


Following what they described as ‘the monumental failure of privatisation of the power sector’ under former President Goodluck Jonathan’s administration, stakeholders in the electricity supply chain have strongly canvassed de-privatisation of the defunct Power Holding Company of Nigeria (PHCN).

They argued that despite the Federal Government’s subventions amounting to over N2 trillion to the electricity distribution companies (DisCos) and generation companies (GenCos), as well as the Transmission Company of Nigeria (TCN) since the privatisation exercise, the companies have remained largely dysfunctional, while Nigerians continue to pay for ‘darkness.’

The stakeholders, comprising labour unions, civil society organizations and community representatives, made the demand in Lagos at a one-day public symposium on the power and water sectors’ situation in Nigeria organised by the National Union of Electricity Employees (NUEE), Amalgamated Union of Public Corporations, Civil Service Technical and Recreational Service Employees (AUPCTRE) with the support of Public Services International (PSI) and DGB Bildungswerk Bund (DGB BW) value chain project on Tuesday, December 20, 2022.

At the symposium with the theme: Water And Power Sectors Situation In Nigeria: Issues, Challenges And Prospects, they reviewed the situation in the two sectors on the backdrop of the poor performance indicators in the power sector, and repeated attempts by government at all levels to commercialise and restructure the water sector, the latest being the controversial National Water Resources Bill currently pending at the National Assembly.

Specifically, Deputy National President of the Nigeria Labour Congress (NLC) and General Secretary of NUEE, Joe Ajaero, who bemoaned the parlous state of the nation’s power sector, pointed out that falsehood and deceit had characterised Federal Government’s policies, especially in the privatisation of the power sector, adding that a review of the Memorandum of Understanding (MoU) of the privatisation exercise was long overdue, as it stipulated a five-year period, but nothing had been done in that regard.

He explained that besides selling the power infrastructure by the sellers, who were also the buyers for N400 billion, while worker’s entitlements amounted to N400 billion, they also insisted on raising tariffs based on inflationary trends the government created.

Ajaeo also lamented that the Mambilla Power Plant, which was conceived under the General Ibrahim Babangida military regime, would have generated over 3,600megawatts, while the Shiroro Power Plant would have added another 900megawatts, which would have translated to 4,500megawatts to the National Grid, but the projects have been abandoned for over 30 years.

The labour leader further noted that during former President Olusegun Obasanjo’s administration, the then Minister of Power, the late Chief Olusegun Agagu cited the Omotosho, Papalato and Geregu power plants due to ethnic and political considerations to the detriment of the general interest of Nigerians, insisting that most of the power plants were sold based on unwilling-buyer-willing-seller.

Maintaining that privatisation, neo-liberalisation and commercialisation have never favoured workers and citizens, he stated that every market is driven by choices, but the people have always been deceived by the concept of market forces. He added that even the United Kingdom (UK) once embraced privatisation is now resorting to by-back of critical state infrastructure and as such, Nigeria should reverse the privatisation of the power sector since the exercise has failed woefully.

He also bemoaned the fact that new power plants were not being built in the country to generate additional megawatts to the Grid and that as long as the situation remains so, Nigerians should not expect a marked improvement in electricity generation and distribution, adding that it was even more worrisome as over eight DisCos had been taken over by banks due to their unpaid loans.

Participants, including the National President of AUPCTRE, Benjamin Anthony, Director of Programmes, Corporate Accountability and Public Participation Africa (CAPPA), Philip Jakpor and General Secretary of the Lagos State chapter of AUPCTRE, Biodun Bakare, among other civil society groups, interrogated the effectiveness of subsisting policy frameworks in each sector, built stakeholders awareness on the issues, mainstreamed the issues of workers’ rights and conditions, as well as generated labour and community responses to the neo-liberal agenda of privatisation of public utility services.

In a communiqué issued at the end of the symposium, participants observed that nine years after the privatisation of the power sector, the same issues for which the government claimed privatisation was the way out have remained largely unresolved.

“Nigerians still do not have stable and reliable power supply and even with installed capacity at 12, 522MWs, Nigeria has failed to generate beyond 4,000MWs to service Nigeria’s population of over 200 million. While the transmission capacity has improved to well over 8,000 MW through the National Grid, there is still less power to pass through the system for the benefit of citizens. Nigerians are forced to continue paying private companies for doing nothing to upgrade the capacity in the country, which oscillates between 3,000 and 4,000 MW.

“Tariffs have been increased for over five times, putting additional burden on Nigerians who do not actually enjoy adequate power supply. The GenCos have jettisoned the primary objectives of generating power to sundry businesses around the power stations that are completely outside their mandate, while generator importers continue to have a field day as the biggest beneficiaries of the deficit in demand and supply in the power sector.

“Network infrastructure challenges including overloaded transformers and feeders, obsolete equipment, limited network, lack of automation, among others still plague the sector, just as gas limitation to the generation companies is still a regular occurrence,” the communiqué reads.

It added that metering challenges in the form of huge metering gap of over 6,000,000, estimated billing, poor meter maintenance and funding challenges exacerbated by the absence of long-term “patient” capital (equity/debt) to fund capex investments continue to plague the power sector.

Others are high cost of borrowing, poor history of DisCos, among others, while lack of investments, and upgrades of equipment and facilities by private entities, even as workers in the power sector have remained neglected and have become major victims of failure of the power sector privatisation.

The participants subsequently recommended that the Federal Government should commence the process of the total reversal of the privatisation exercise owing to its failure at all levels and total commercialisation of the power sector to allow the companies to charge economic tariffs with human face considering the purchasing power of the citizens and the regulatory directives.

“We seek adequate consultation and engagement with Nigerians especially the grassroots communities with the specific aim of incorporating their concerns in planning and addressing current power sector challenges and prioritisation of the concerns of the electricity sector workers including improving their working conditions and statutory emoluments, as well as the sanction of private entities that reneged on agreements with the Federal Government in the power sector and their enablers in the public sector,” they added.

On water, the groups maintained that although Nigeria is largely surrounded by water, the country still lacks access to adequate, safe and affordable potable water, lack of adequate and sustainable budgetary allocation for water at the state and federal levels, corruption, lack of transparency, contract and financial manipulations have remained a major setback.

Also, lack of consultation with the citizens in addressing the national water crisis as exemplified by plans to force Nigerians to accept the National Water Resources Bill, under-investments in the water sector, as well as the abdication of the primary responsibility at the Federal and state levels in providing publicly funded water for the citizens in favour of the much-discredited Public Private Partnership (PPP) have been some of the challenges bedevilling the sector.

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They decried the deliberate abandonment and lack of maintenance of water infrastructure and facilities across the country, the massive destruction of water pipelines due to poorly implemented road construction and rehabilitation projects, as well as demotivation of workers by the government at all levels due to the neglect of their concerns and denial of their statutory emoluments and other deserved benefits.

They demanded trashing of the National Water Resources Bill to pave the way for a truly people-focused water bill that addresses the genuine yearnings of Nigerians and rejection of all forms of privatisation and commodification of water in the country.

Other demands include full upholding of the human right to water as an obligation of the government, representing the people and integration of broad public participation in developing plans to achieve universal access to clean water.

“We also reject contracts designed by, involving or influenced by the International Finance Corporation (IFC), which operates to maximise private profits, as well as full disclosure of all IFC and World Bank activities and discussions with the Federal and state governments and their officials on water, including formal and informal advisory roles.

“The government should build the political will to prioritise water for the people that will lead to a comprehensive plan that invests in the water infrastructure necessary to provide universal access to safe water, which will create jobs, improve public health and contribute meaningfully to the national economy,” the communiqué added.

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