KEEP PHCN PUBLIC!
KEEP PHCN PUBLIC!
Under Democratic Control and Management of Workers and Consumers
No to Privatisation!! No to N18 pkwh Hike of Electricity Tariff!!
Workers, artisans, traders, youths and all consumers must fight back now!
The anti-poor government of President Goodluck Jonathan has contrived another means to convert the collective patrimony of Nigerians into a profit-making venture of businessmen and corrupt politicians. First, the government has increased electricity tariff from N4 per kilowatt hour (pkwh) to N18 per kilowatt hour (pkwh). Secondly, the government recently launched a ‘Road map on power sector reform’ the aim of which is to sell-off the Power Holding Company of Nigeria (PHCN) formerly National Electric Power Authority (NEPA) to the private sector.
If this is allowed to happen, Nigerians can as well say bye-bye to electricity as tariff will be jerked-up beyond the current increase of N18 pkwh to the detriment of millions of poorly paid workers, traders, artisans and ordinary people who will not be able afford it. Even businesses (especially small and medium scale) will suffer as they will be faced with the choice of either increasing the prices of their products and services beyond what people can afford in order to meet up with electricity and generator costs or fold up permanently.
JONATHAN’S ROADMAP ON ELECTRICITY REFORM
Speaking recently at the launch of the ‘Roadmap on power sector reform’ meant to complete privatisation of PHCN by 2011, President Goodluck Jonathan said, “In drawing up this roadmap, we have identified tariff as the critical factor in resolving the entire value chain of supply of electricity. The idea is to ensure that the relevant agencies achieve a tariff structure that will give incentives to investors. â€¦Therefore, as articulated in the electric power sector reform act, the private sector will be responsible for generation and distribution, while government will still own the transmission grid, but with private sector management. â€¦ Government will provide the credit enhancement that will enable them invest in the construction of the power plants”. Arguing further, Jonathan said, “â€¦The key factor to realizing government goals in the power sector is appropriate tariff regime. The tariff on electric power in our country today is much lower than what is paid in countries across the West African sub region”.
Also, according to Vanguard Newspaper of October 15, 2010 “The unveiling of the power sector reform roadmap, signals the start of full implementation of the Electric Power Sector Reforms (EPSR) Act of 2005, which seeks to privatise the 18 successor companies of the Power Holding Company of Nigeria (PHCN). Details of the roadmap indicated that the PHCN successor thermal generating plants would be privatised through the sale of a minimum of 51 per cent equity to core investors”.
The above, if carefully decoded, shows that President Jonathan’s ‘Roadmap on power sector reform’ is nothing but an anti-poor and neo-liberal agenda meant to transfer public enterprises into the hands of local and foreign capitalists for profit-making at the expense of ordinary people. Accordingly, while private sector buys 51% equity in the PHCN which includes the six state-owned generation companies and 11 distribution companies, private sector will also be asked to manage the transmission grid “under a five-year management contract”. This means that effectively the government wants to hands-off power generation.
IS PRIVATIZATION THE ANSWER?
Yes, it is true that PHCN has not been able to generate enough megawatts to cater for domestic and industrial needs. Indeed, epileptic power supply has been the experience for the past 20 years or more. Most consumers are forced to pay huge bills for electricity they never had. The PHCN distributive lines have not ensured that power gets to every home, offices, communities, shops, workplaces and factories. In most cases, when there is a fault with transformers or electric poles etc., it takes PHCN days, months or even years to fix the problem thus throwing whole communities into darkness. Indeed, some streets and even entire communities have not seen light for months or sometimes years.
True, PHCN electricity supply is now on the contrary a backup while many homes, offices, shops, factories and even government buildings now depend on generators with huge amount being spent on fuel. Those who cannot afford generators and their fuelling are forced to cope with darkness and the associated stifling heat. There is also loss of means of livelihood for barbers, soft drink and pure water sellers, traders, hair dressing salon owners, bar owners, offices, rewires, electronic repairers, tailors and what have you.
According to the Central Bank of Nigeria (CBN), while Nigerians expend $13 billion (N1.989 trillion) annually on fuel to power the 60 million generators that are in private homes and offices, yet, less than half of Nigerian citizens have access to electricity. This situation has caused so many deaths from incessant fire outbreaks and choking on generator’s fumes. For manufacturers, generating power from generators adds more than 40 per cent to the cost of goods and services in Nigeria thus making their products too expensive for the vast majority to afford.
With every category of Nigerians frustrated with the PHCN and the epileptic electricity supply, it is therefore not impossible for Nigerians to be fooled to believe that privatisation could be a solution. This is especially true since the government has always blamed the failure of every public enterprise on inefficiency, nepotism, corruption and mismanagement of workers. According to them anything owned by government is always mismanaged because no one is responsible for it, whereas anything owned by the private sector is always well managed and efficient. With this argument, they have successfully fooled Nigerians to sell over 400 public enterprises.
To start with, the logic of handing over control and management of every key and fundamental aspects of the Nation’s economy to private sector flies even in the face of the experience of capitalism itself. The advanced capitalist countries who are the proponents of this death-pill called privatisation, in order to provide the conditions necessary for capitalist production and under pressure of their own workers, often developed their own economy, production, science and technology through state investment in urban and rural electrification, provision of roads, education, health care etc. It was the availability of infrastructures like cheap electricity, good road networks and modern means of communication provided, or supported, by government which assisted industrial production and the economic growth of these advanced capitalist countries.
When private ownership undermined basic services, like the railways in Britain, they then were nationalised only for them to be later privatised after the state had restored them. This shows how often privatisation is a means for capitalists to find new avenues of profit, usually at the expense of workers in the industry concerned and its consumers. True to its capitalist character, the Jonathan government is willing to take Nigerians down this disastrous road of naked neo-liberalism precisely because the concern of every capitalist is how to make more money and not how to provide efficient services to better the lives of people.
Secondly, going by Nigeria’s recent history, privatisation will only worsen the already bad situation in the power sector. To start with, the real reason why public enterprises like PHCN, NITEL and others are not performing is the absence of democracy in the management of these enterprises and the brazen corruption of the top layers of the management who are political appointees of the regimes in power. As Socialists have always argued, only public democratic control and management of public enterprises by elected committees of workers and consumers can make them work efficiently and to the satisfaction of the people. In a situation where absolute power rests only with some bureaucrats at the top on decisions as to how to run public enterprises, there is no way mismanagement and corruption will not occur.
Thirdly, the experience of similar privatisations in other sectors of the economy demonstrates the utter failure of privatisation as a means of providing the mass of people with efficient, cheap and accessible public infrastructures like roads, electricity, pipe borne water supply, communication, education, health care etc. For instance, as socialists predicted, most of the 400 privatized public enterprises namely NITEL, Nigerian Airways, Nigerian Ports Authority (NPA), Ajaokuta Steel Complex, Daily Times, Delta Steel Companies, African Petroleum, Eleme Petrochemicals, ALSCON, NAFCON, Osogbo Steel Rolling Mill etc all of which were sold at give away prices to local and foreign companies (some of which are fronts for many corrupt politicians) are not working today. Instead, they have all been reduced to carcasses with scandalous tales of mismanagement by the private sector.
In a rare case of self-confession from a public official, Christopher Anyanwu, the erstwhile Director General of the Bureau for Public Enterprises (BPE) claimed in September 2009 that only 10% of the 400 privatized firms are functioning at optimal level. NITEL for instance has been dormant since it was privatised with thousands of its staff dying away as a result of several months’ salary owed them by the successive private management. The same goes for Ajaokuta Steel Complex, Daily Times, Delta Steel Companies, Eleme Petrochemicals and Osogbo Steel Rolling Mill.
The reason for this is that many of the private individuals and companies that bought these facilities have no technical or financial capacity to run them. They bought these public enterprises so that they could use them to raise loan facilities from banks as happened in the case of NITEL which was sold to Transcorp (A company where former President Obasanjo is a major shareholder) for $500million. For the 2 years Transcorp owned NITEL, aside burdening the company with billions in debt, properties of NITEL were stripped off while the fixed lines of the company dipped from 500, 000 to 45, 000. At the end, the managing director of Transcorp, Tom Iseghohi, along with two others, was charged for looting $110 million in NITEL.
Particularly in the power sector, privatization has proved right from the beginning to be a disastrous venture. Since 2005 when the PHCN was unbundled into 18 autonomous companies, about 20 private power companies issued licences to generate and distribute electricity have not generated a single megawatt! These include Geometrics Power Ltd owned by Barth Nnaji (Special Adviser to President Goodluck Jonathan on power). Others include Manyatta Engineering Services Ltd owned by Vice President Namadi Sambo, Ziglasses whose MD is Roseline Atu, nee Osula, acting as a front for former President Obasanjo and Farm Electric based in Ota solely owned by former President Obasanjo.
The reality is that the Nigerian capitalist ruling class and their foreign counterparts who own these private companies have no faith in the economy. As such, they will be much eager to invest in speculative businesses or stash their money in banks abroad than tie up their money in investment in such a capital intensive sector as the power sector. Hence, they wish to buy off the 3000 megawatts already generated by the PHCN so they can distribute this at high tariff rates to consumers thus making easy profit with less capital expense.
If at all they will invest, they will like to do so with public resources as the assurances of President Goodluck Jonathan and his Special Adviser on Power, Professor Barth Nnaji that “Government will provide the credit enhancement that will enable them invest in the construction of the power plants” and that “the Central Bank of Nigeria, CBN, has established a N300 billion fund that could be assessed by prospective investors in the power sector” clearly shows. This ensures that they are amply protected should the investment turn unprofitable as only the government will lose its money! In plain language, what this means is that government will use public resources to assist private individual and companies which are not accountable to no one but themselves to take-over public enterprises.
This was the same thing that was done in 2009 when billions of naira of public funds was used by the Central Bank of Nigeria (CBN) to bail-out banks and financial institutions which were on the verge of collapse due to sharp practices, corruption of the management and unprincipled loan and investment in risky stocks. It is one thing to support the banks’ ordinary customers, but something completely different to bail out the bank owners.
The question is if private sectors are so efficient in management such that public enterprises have to be sold to them, why does government have to always come to their rescue with public money in frantic bail-out? The on-going scandalous trials of some bank executives over allegations of looting, corruption and sharp practices clearly shows that the private sector cannot management any enterprise efficiently.
In any case, the primary objective of private investors is to make profit and not service delivery. Therefore, even if in the highly unlikely situation the power sector is reinvigorated after successful privatization with improved generation and stable power supply, the vast working masses, artisans, traders, small and medium scale business owners should expect that the tariff will be increased to the level that only a minority of the population will be able to afford it.
The current increment from N4 pkwh to N18 pkwh is merely a tip of the ice-berg and has just been done to attract private investors to invest in the powers sector. However, the electricity market will only be deemed profitable for private sectors to invest when the increase gets to at least N22 pkwh. In this kind of scenario, whole communities, families and streets will find themselves in darkness as a result of inability to afford the bills.
FOR A ONE-DAY WARNING NATIONWIDE STRIKE AND MASS PROTEST
This is a clarion call on the Nigerian working masses, artisans, traders and youths to fight government renewed drive to privatise the power sector and make live unbearable for the ordinary people. The efforts of the PHCN workers under the aegis of the National Union of Electrical Employees (NUEE) in resisting this neo-liberal policy are commendable. On August 25, 2010, NUEE organised a one-day strike to press home demands for payment of monetisation arrears.
It goes without saying that PHCN workers will be the first victims of privatisation as massive retrenchment will be the order of the day. The situation in NITEL is a clear warning of the horrors of privatisation. Already, the remuneration and working conditions of PHCN workers is abysmal. The workers are owed months of monetisation arrears valued at N57 billion. Since the strike by NUEE, the Federal government has continued to pay lip-service to payment of the arrears. This anti-worker attitude of government is just an inkling of what to expect when the PHCN is privatized. Workers will be retrenched while salary, pension and trade union rights will be subject to brutal attacks by the private owners.
However, PHCN workers cannot fight alone. Nigerian workers, artisans, traders and youths must join hands with PHCN workers to defeat government wicked privatisation policy as well as the increment of electricity tariff to N18 pkwh. As a matter of urgency, the NLC and TUC leaders must end their participation in and membership of the government’s National Council on Privatisation which approved the PHCN’s privatisation in August.
Instead these trade union leaders should oppose all further privatisation and seriously support the electricity workers by calling for a one-day warning nationwide strike and mass protest as a warning to government to stop the privatization of PHCN, reverse all privatization and to desist from the deregulation of the oil sector. This one-day strike action and mass rally should be used as a means to educate Nigerians on the dangers of privatisation. Therefore, leaflets and fliers must be produced and circulated in all nooks and crannies of the country.
If this action is backed-up with further one-day strike and mass protests across the country, it will be possible to mobilise the working and poor masses for a decisive action to defeat all governments neo-liberal economic policies. However, if the NLC and TUC leaders are not prepared to do this then it is the responsibility of activists to work with NUEE to build a popular movement that can begin to mobilise resistance.
FIGHT FOR PUBLIC CONTROL AND MANAGEMENT OF PHCN
However in fighting privatisation of the PHCN, we must counter pose to government’s privatisation policy an alternative working class policy of how the PHCN can be better run and managed for efficient power generation, transmission and distribution. Otherwise, the struggle will lack direction and purpose.
The National Union of Electrical Employees (NUEE) despite its very correct critique of the effects of privatisation of the PHCN has so far not drawn up an alternative working class policy and program from the point of view of the interest of the working masses as a basis upon which the problem of power in Nigeria can be addressed. It was the absence of this kind of working class alternative policy that weakened the struggle of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) against government neo-liberal economic policies particularly incessant increase in fuel price and deregulation of the oil sector.
According to the Minister of State for Power, Nuhu Wya in Vanguard Newspaper of October 15, 2010, “the government has calculated that something like $10 billion per year needs to be invested throughout the power supply chain in order to achieve the relatively modest (by international capacity) target capacity of 40,000mw by 2020”. Compared with the millions of dollars being made from daily crude oil sales and the huge amount being daily looted by politicians and political office holders, this amount of $10 billion is not beyond the reach of the Nigerian government. The only obstacle is the profit-motive and endemic corruption of the Nigerian capitalist ruling class.
Therefore, to raise the amount of money needed to improve electricity generation and supply, the commanding heights of the economy have to be placed under public ownership of the working masses, most importantly, under democratic workers’ control and management, as only this arrangement will ensure that society’s resources is used to provide stable power supply through overhauling of the entire generation, transmission and supply chains of the power sector.
However, to ensure that the public resources spent to improve the power sector is not mismanaged or looted as happened to previous government attempt to revamp the power sector and also to avoid the debacle of the former Soviet Union and deformed workers states of Eastern Europe where bureaucratic strangulation undermined the nationalized economies, the PHCN must be placed under the democratic control and management of elected committees of workers and consumers.
What this means is instead of a few bureaucrats appointed by the government dictating the workings of public enterprises, decisions must be taken among rank and file workers and consumers elected into management committees at local government, state and national levels with the mandate to oversee the affairs of the sector in compliance with the needs of the people.
However, a capitalist government cannot willingly hand over the running of the economy to workers and the mass of the people. Only a democratic socialist government of workers and poor people can place the running of the commanding heights of the economy in the hands of the people. With a workers and poor people’s government, it would be possible to use society’s resources to research, develop and discover new, efficient and more environment-friendly means of generating electricity such as wind, solar and wave power while phasing out gas, coal, fossil fuel, nuclear etc., which are the only source of energy accepted by the capitalist ruling class today without concern for the safety of the environment and energy needs of society.
Unfortunately there is no political party running in next year’s elections that stands for a programme like this. This is why, whoever is the victor next year, there will be no fundamental change in Nigeria’s situation or the lives of most of us. This is why the DSM, alongside supporting struggles like that of the PHCN workers, canvasses building of a movement of working people that can remove the thieving capitalist elite wrecking the country and itself begin to rule in the interests of working peoples’ needs and not the profits of the ruling class.