ELECTRICITY PRIVATISATION: Electricity Crisis May Trigger Nigeria’s Next Uprising

(By Kola Ibrahim)

The chicken is coming home to roost. Months after the gargantuan fraud called privatization, Nigeria’s capitalist government and its big business partners cannot justify the privatization of the electricity utility company, PHCN to private sharks. Currently, power supply has not only been in its horrible state, it has indeed got worse in many respect. Worse still, there seems to be no end in sight. Power generated by Nigeria’s power plants has dwindled from 4517 MW in December 2012 to 3563MW in December 2013; a drop of 954MW within a year (Punch Editorial, 23/01/2014). In fact, by January 27, 2014, seven of the 11 power plants have shut down completely or almost completely (Punch, 29/01/2014) due to lack of capacity of the private owners to maintain and manage the plants. This has led to practical blackout for most part of the country for weeks since third week of January 2014.

According to the Punch, these shutdowns were as a result of the technical collapse of some of the plants due to poor maintenance and obsolete parts, coupled with shortage of gas to the gas-powered plants, either due to inability of private plants owners to pay for gas, or due to vandalism of gas pipeline, itself a product of the bankruptcy of the political class in Nigeria. Consequently, power outages and power shedding have become the norm for most Nigerian households. Meanwhile this has not stopped crazy bills that are dished out to Nigerians. In fact, the exploitation has increased, as the distribution companies have increased charges. For most Nigerians, it is a case of worsening horror.

With the ways things are going, it is not impossible that electricity crisis may trigger the next Nigerian uprising. From Lagos to Kwara to Ibadan, pockets of protests are breaking out against the horrible situation the privatization has thrown the working and poor people into. These pockets of protests will increase in the coming period, and may gain a national echo. What is needed now is for labour movement, along with pro-labour movements such as the DSM and other left organizations, to initiate a national movement that will be built from grassroots, communities and workplaces, against terrible power situation. Among other things, such a national movement must make as a basic demand the renationalization of power companies under the democratic control and management of the working people, communities, consumers and relevant professional groups. Such movement will also demand massive funding, under strict public scrutiny, of the electricity sector.

Behind this horrible situation are the treachery of Nigeria’s capitalist political class and the failure of neo-liberal capitalism in Nigeria. The history of Nigeria’s electricity crisis itself reflects the history of failure of capitalism in Nigeria. In spite of the enormous wealth that accrued to the country since independence, the country’s electricity supply has not left its colonial height. No new power plant was built by successive administrations (both military and civilian) between 1980 and 2005. Yet several billions of dollars were committed to the power sector in this period. In 2005 when the Obasanjo regime tried to build some new power plants, it was clear that it was to become another conduit pipe for massive looting of public wealth. While over $10 billion was committed to building new power plants, less than 700 MW of electricity have been added to the national grid.

Reflecting the ruinous character of Nigerian ruling class, most of the power plants were situated far away from the fuel sources, while other have become mere monuments because there was no provision for their powering, fuelling and integration into the national grid! In fact, according to Nigeria’s president, Goodluck Jonathan, the country could not even harness the generated power, even if all the so-called new power plants were working, because the transmission and distributing infrastructures are not just there. Yet, since 1999, well over $20 billion has been committed to the power sector by various capitalist governments! Using the World Energy Outlook 2010 estimate, this wasted money (over $20 billion) is more than a quarter of what is needed to provide universal and permanent access to electricity for all Nigerians, yet more than 130 million Nigerians (constituting over 81 percent of the population. NOI Poll, Vanguard, 24/07/2013) do not have access to electricity in the 21st century. Indeed, less than 15 percent of over $500billion the country has earned since 1999 will provide universal access to electricity for all Nigerians. According to a report in the Vanguard newspaper (2/01/2014), quoting a representative of a Western oil consultancy firm, Nigeria wasted 1.1 million cubic feet of gas daily, which can provide electricity for 20 million houses, while the flared gas in the Niger Delta is enough to power “African continent and beyond”.

Yet, the capitalist class (in both politics and big business) could not generate enough electricity that can power Lagos. And they could not have, because the neo-colonial, neo-liberal economic interests of the capitalist class in Nigeria, which rest on looting from national wealth, runs contrary to the interests of the majority of the population. To every problem confronting the society and the economy, the neo-liberal theory enjoins the capitalist class to make profit out of it. Thus, it is not surprising that the only solution of the capitalist class to the debilitating electricity crisis in the country is the selloff of the multi-billion dollar power utility company (PHCN) to private investors, majority of who have played one role or the other in the destruction of public assets, enterprises and the national economy. Indeed, from the first day, it was clear that the power privatization, aside being a fraud, would fail, as the so-called investors do not have the technical and financial resources to run any part of the behemoth called PHCN.

Nothing exemplifies the fraudulent nature of power privatization than the recent revelation by the Power Minister, Chinedu Nebo during an interview on Channels TV, to the effect that the power plants were sold at rock bottom prices to the so-called investors. Yet, the ‘investors’ could only and of course reluctantly raise the money to buy the electricity companies through loans from banks!

According to the International Energy Association (IEA) 2010 Report around $6.1 billion (about N1 trillion) is needed in investment annually for the next ten years to provide electricity for all Nigeria. Where will the private companies that could not even maintain the staffs they met on ground mobilize the resources to do all this? While generating companies (Gencos) have found it difficult to pay for gas to power the plants and replace obsolete parts of plants, the distribution companies, with active connivance of the government, have cut their staff strength to the marrow, thus rendering the companies ineffective, as able technical hands have been reduced drastically.

The case of Transmission Company of Nigeria (TCN) is not different. Aside the chronic shortage of transmission facilities, the Canadian technical manager, Manitoba Hydro International (MHI) employed by the government on a $24 million management contracts, has failed woefully to make any meaningful improvement to the transmission of electricity. The situation was so terrible that the Power Minister, Nebo at the inauguration of TCN management board, was forced to voice out government’s frustration on the failure of MHI. In fact, he threatened to terminate the contract with MHI, whose competence to run TCN he noted was “overhyped” (Guardian 07/01/2014).

Anarchy is currently the rule in the power sector. As the Gencos could not generate electricity, so the Discos could not distribute, while the TCN is lost on how to transmit even the little generated. Worse still, the situation seems not to have any chance of improving as the government and the private ‘investors’ are clueless about the situation. Not even the June deadline given to the private ‘investors’ will work. This deadline has been rejected by the ‘investors’, while the Minister has been subsequently forced to reverse himself.

In fact, the situation is so horrible that newspaper pundits, like the Punch, which actively support privatization, are advocating revocation of sale for ‘non-performing operators’. As the Punch newspaper itself noted, “the power situation in the country has gone from bad to worse since the former Power Holding Company of Nigeria’s assets were handed over to private investors” (29/01/2014).

Federal government itself, in realization of the permanent failure of privatization, budgeted close to N836.6 million for fueling and maintaining generators in government offices for 2014! Yet, the fate of Nigerians has been handed over to these Shylocks. While power supply is poor, the bills have gone up. Local and state governments have found ready excuse to avoid ameliorating the problems faced by Nigerians. For instance, many state and local governments e.g. Lagos State, have abandoned any plan to procure transformers and other infrastructures for communities, under the guise that they cannot be doing the work for private companies.

All of these have confirmed our earlier position that privatization of electricity could only bring more woes to already suffering Nigerians. We maintain that only democratic management of the electricity and power sector by elected representatives of workers, consumers, communities and relevant professional groups, coupled with massive funding of the sector, will ensure adequate and constant supply of electricity to Nigerians. It is only on this basis that electricity can have a long-term plan of serving as tool for national development.

However, this will also involve public ownership of the whole economy which is presently under the control of local big business and their foreign lords under the democratic control and management by the working people themselves. It is only through this that the electricity and power sector can be made as part of the whole development of the society.

Unfortunately, today’s labour movement leadership does not understand that the current set of capitalist class in Nigeria could not serve as instrument of development, as their survival rests on primitive accumulation, which is only possible in a backward and underdeveloped economy. The labour movement leadership, even where they opposed privatization of electricity companies, did so mainly to secure workers’ emoluments after privatization. While the in-house unions, at a period, opposed privatization in principle, there was no concrete plan through campaigns and mass struggle, to mobilize the poor people and workers throughout the country to oppose privatization, which itself is a product of treachery of central labour leadership. Today, in spite of agreement reached with the government by the unions, over 30, 000 workers have been sacked while many have not received their terminal benefits.

It should be reiterated that what is happening in the electricity sector, also multiply itself in every facet of the economy and the polity. While the education sector is comatose, quality healthcare is unaffordable for most Nigerians; potable water supply is a dream for most Nigerians while majority of youths are jobless, even when there are many opportunities through development of infrastructures to provide jobs for all. On the other hands, a very tiny layer of the population is becoming stupendously rich at the expense of the society. While over 70 percent of Nigerians are wallowing in abject poverty, the 20th richest man in the world is a Nigerian, with wealth more than the combined budgets of all the state and local governments in Nigeria. Only a capitalist system will allow this.

This therefore means that to end suffering in the midst of superabundance, the working masses must end the iniquitous capitalist system by taking over political power and building a socialist society in which the mainstay of the economy will be put under democratic public ownership. This requires the building of pan-national political platform of the working people to champion this cause. The Labour Party set up by some labour leaders but handed over to traditional politicians, has become the second eleven of the ruling but ruining PDP party. Therefore, a new working people’s political alternative is needed.