Energy Supply And The Nigerian Economy
GUARDIAN, March 13, 2005
The importance of energy in the
development process of any nation is well-known and cannot be over-emphasised.
Adequate energy is an important factor in the production process and an
indispensable factor in social and economic development and overall quality of
life of the population. Unfortunately, the supply of electricity, undoubtedly,
the key energy source for industrial, commercial and domestic activity in the
modern world, falls short of demand in Nigeria.
There are three basic infrastructural
facilities that must be in place before any economy can thrive. These are energy
(mostly electricity in the case of developing nations), water and good roads.
Since we lack virtually all of these in Nigeria at present, it is not difficult
to fathom why the economy is constantly in a state of distress. Aso Rock
loyalists will always advocate that our President, Chief Olusegun Obasanjo, has
good intentions to turn things around for good. But unfortunately, good
intentions alone are never enough. Just as faith without work is valueless, so
also is good intentions without deeds. We must be doers and not only speakers
and planners. Actions of any Government must translate into benefits for the
masses. And since the president has always advocated the 'Nigerian project' he,
as the project manager, has responsibility to select a team that will give the
client (the Nigerian masses) value for money. The bulk stops on his table.
The set of people managing the
Nigerian economy, namely: President Obasanjo, Dr. (Mrs.) Ngozi Iweala-Okonjo,
Professor Charles Soludo, Dr. (Mrs.) Oby Ezekwesili etc are no doubt, among the
best anywhere in the world. There must be some fundamental latent problems why
the economy has remained comatose and the masses, consequently, are being denied
the 'dividends of democracy'. Meanwhile, the Government claims that the
foundation for future prosperity is being laid and that we might not see the
effects until some years from now. Any economic policy being embarked upon
should have 'human face' and should be apparent when the expectations would be
realised. What is not obvious to all Nigerians is that our economy is being
patterned after the economies of the United States and that of Western Europe by
the adoption of the 'conditionality' of IMF and World Bank, but without the
infrastructural facilities of these countries, such as constant energy supply,
water and serviceable roads.
The best way to improve on any
economy is by ensuring that all these three basic facilities are available. Any
other step such as privatisation, transparency, due process etc, is like putting
the cart before the horse and this will not produce the desired effect. After
about five years of implementing these policies, no positive results have
manifested in any way.
Of these three basic amenities, road,
water and energy (electricity); the greatest of them is electricity. It is
common knowledge, that without electricity , we may not be able to pump and
distribute water, without the same resource, there may be no raw and finished
products to move about on the roads. In this modern age of mechanisation, large
scale and productive farming depends largely on adequate availability of
relevant energy. In the apparent lack of these elements, should we continue to
hang unto theories associated with IMF, World Bank, micro and macro economies or
should we stop the rigmarole, get back to the basics by ensuring the provision
of energy (essentially electricity), water and roads for the immediate recovery
of our economy? For obvious reasons, I have decided to narrow down this write-up
to the provision of energy, because as explained above, its position will
positively affect the other two.
The multi-dimensional role of
adequate energy supply was obvious to the present administration when it came
into power in May 1999. One major problem this administration promised to solve
immediately, was that of electricity supply. In 1999, the total electricity
available for use was about 2,000 MegaWatts (MW). Government as at 1999,
realised that the minimum electricity requirement for the nation was about
4,000MW and there was the intention to reach that level within one year in
office (i.e. 2000). Almost six years later in 2005 the electricity capacity
available for use is less than 2,000MW even though as at 1999, Nigeria had a
generating capacity of about 6,000MW, made up of 1,900MW from hydroelectric
power and 4,040MW from thermal power. It is pertinent to ask why the Government
cannot generate at least 4,000MW from an installed capacity of over 6,000MW.
Just as our refineries are almost moribund, it is shameful that Nigeria cannot
generate enough energy! Sometime in 1999, at the onset of this administration,
in an article in The Guardian, I advocated the
fixing of our refineries as a first step to solving our fuel supply problems.
Six years later, the same recommendation is still valid.
As a nation, there must be a minimum
standard of electricity generation and distribution below which we must never
fall irrespective of, whatever happens to the water level at the Kainji dam and
or the gas supply by the Nigerian Gas Company (NGC). We should by now be in a
position to generate and distribute at least 4,000MW of electricity. We must
always have alternatives for the bad days because this is what advanced
countries of the world do, by adopting strategic plans. For instance, if today,
because of political expediencies, Nigeria refuses to sell her crude oil to the
United State of America, this will not be sufficient to ruin the economy of that
nation since they would have envisaged the situation ever before it happened and
mapped out plans to combat it. 'Fire brigade' solutions never endure.
Nigeria, with all the human and
material resources at her disposal, has to be classified as poor. I happen to
know some of the top managers of the National Electric Power Authority (NEPA).
The Managing Director is a first class engineer from a first class institution;
in fact, he is one of the best in the world. He has managed a multinational
company successfully before coming over to NEPA. The same can be said of all the
top managers of the authority. I can therefore guess two major reasons for the
present abysmal performance of NEPA. First, it may be appropriate to focus our
attention on the planning department of the authority. Quality planning is not
only for the immediate (fire fighting approach), but more for the future. The
planning section which should be directly responsible to the Managing Director,
ought to have analysed the two most vaunted reasons for NEPA's constant failure
and provided better alternatives as a way out of the present logjam. We are
tired of being told of the low level of water at the Kanji Dam and insufficient
supply of gas by the Nigerian Gas Company (NGC). For how long must we continue
to listen to the same story over and every time as a way of passing the bulk?
Since both excuses are not new, and we cannot live with them for ever, we should
be in a position by now to overcome them. And if these prove insurmountable, why
should we be ashamed to learn from Ghana and other neighbouring countries? How
were they able to overcome similar problems? In addition, we must realise that
Ghana has no natural gas, a valuable energy resource that Nigeria has in
The second is the issue of funding.
Though NEPA's management and engineers may be top class, yet if they do not have
sufficient fund and freehand to turn things around, we will continue to live in
delusion. For reasons that are obvious, NEPA should not be privatised now until
it can find its feet. Since the bug of privatisation, brought about by IMF and
World Bank, caught up with us, I am of the opinion that most of the top managers
and engineers, instead of devoting their energy to the revival of NEPA, are more
concerned about their future in the unfolding dispensation.
Though this process of privatisation
has been going on for the past five years, yet, as of today, we cannot find the
light at the end of the tunnel. I support privatisation, only if it is properly
managed. For now and until it can find its feet, NEPA should be regarded as part
of the services such as water and roads that should be provided for the people.
Even though the populace should be made to pay certain amount as levy,
Government should ensure its constant availability so as to empower them to
generate adequate income necessary to bring about the required improvement in
their standard of living. With higher income they will be in a position to
afford increased tariff arising from privatisation.
Lack of adequate electricity
negatively affects virtually all low level workers. These include but not
limited to welders, barbers, business centres, refrigerator/air-conditioner
technicians, show makers/repairers, laundry workers, tailors, etc. The middle
class workers are equally affected. Nearly all small scale manufacturers have
closed down their factories mainly due to lack of energy. The few who can afford
to buy generators are unable to operate them because of the high cost of fuel.
This is perhaps why many hold to the belief that the middle class has been wiped
out in Nigeria as a result of our twisted economy, and this situation is
dangerous for any society. One can also guess what price the upper class has to
pay to provide generators at home, offices and factories. Unfortunately, at the
end of the day, these prices are passed on to the low level workers (the end
consumers). It is obvious that without the full participation of the low and
middle classes, the economy of any nation cannot thrive, no matter how hard the
Bejide is the
Managing Director/CEO EDG Oil & Gas Nigeria Limited in Lagos