Electricity,Regulation and Corporate Transformation.

Electricity,  Regulation  and  Corporate Transformation

                                BY  Chidi Wilson Nwachukwu Esq

Issues of Electricity has become a gargantuan  problem to the Nigerian state over the years  ,and  it is so critical to the economy that  it must be fixed  from all angles no matter how long and hard it may take.It appears this sector has defied all solutions so much that the present  administration  has designed various strategies  to meeting the challenges, including its popular road map to power, and total overhaul of the leadership of the Nigerian Electricity Regulatory Commission NERC, with fresh  and energetic  Nigerians led by Dr. Sam Amadi as Chairman .

Successive administrations have spent billions of Naira  to revitalize the power sector without a commensurate result, the cheering news however  is that we can achieve a steady power supply in this country. If South Africa can generate 40 000 mega watts for her about 50 million citizens why  not Nigeria?

The on  going privatization of PHCN  is still in the same direction’ to make it more efficient to deliver the expected goods’’  just as we had in the telecom  sector. Usually the  greatest attraction of privatization for most government  across the globe is that of improved efficiency ,the assumption is that when these public enterprises are sold and managed by private investors, they will pay more attention  hence their investments are at stake. What  is not clear however is whether there will be an appreciable increase in their productivity. The Telecom example in Nigeria has shown that service may not necessarily be efficient yet at a very high cost. It  is still believed that the telephone tariff is still very high in Nigeria compared to many other countries .Although it is equally long  settled that the operators cannot be blamed entirely for this, the reason being that they obtained their licenses at a very exorbitant  prices from the government .Again, the ancillary sector such as electricity was not improved, the reason why you find generators in virtually all the masts stations.

The  Government should take  a cue from the Telecom sector   in the on going  electricity reform by ensuring that  independent power holders are not made to pay heavily for licenses to operate. Government must ensure that  there is a fair deal for these investors otherwise consumers will suffer. The debate about the increase in the tariff presently in the public square, appears to have come from some quarters who are likely to benefit from the privatization process. But  Fortunately for Nigerians, the current NERC boss  is a pragmatist and great advocate of regulation not just as a prerequisite for economic  development  but  as a human right concern having come from the Human Right community .And  from  the perspective of poverty alleviation, regulatory capacity will ensure  basic services to the poor at affordable price. Regulation according to Dr. Amadi  is  a means to protect the human rights of citizens from the juggernaut  of  the  market  economy. Here the regulator controls both the productions and pricing of goods and services so that they are available and affordable to broad category of citizens.

Efficiency  problem should not be overlooked in the on going PHCN privatization, the Bureau for Public Enterprises must not  overlook why these public institutions  failed  to deliver in the first place.  It should not be taking for granted that since they are  sold to  private investors  efficiency becomes automatic . Investors are dragons  and would do anything to recoup their investment ,especially as profit motive features highly in privatization advocacy. Even in the current arrangement ,PHCN still insists that consumers must pay  their  bills or have their light  cut off whether  there  was regular power supply  or not.  

Electricity is very central to the socio economic lives of Nigerians, and so there is need for corporate transformation in this sector. A quick reminder that the argument in favour of privatization by Government are basically two folds; first is that so much money is spent by Government  funding public institutions without reasonable returns, secondly, and this is very important; that  these enterprises  attract poor management and poor results which stultify economic growth. It may be too late in the day to begin to theorize  against privatization  ,however it is still timely to state that engendering efficiency in any organization may require that its governance form be reformed, in plain terms ‘changing the way things are done’. The poor attitude and poor perception  to work that characterize public institutions  must change,  in order to get desirable result not just in the power sector alone but elsewhere.

     

 Those who work in this sector  whether in public or private must be made to understand that there  is a state of emergency in our power sector. Those who  man the sector at executive level must also be seen to be transformational  leaders with connective edge, skill and expertise, not ‘politicians’. The question in their minds should be; How can I help the power sector in Nigeria? If those in other sectors put in five hours, they should be ready to put in ten hours, of course with commensurate incentives.  Transformational change requires enormous energy, it is easy to underestimate how much, it is vision led and requires projection into a dimly outlined future. We have been in the dark for too long, its time to get pragmatic.

Nwachukwu , a lawyer and Development Expert is the  Managing Partner, WILSON LEGAL, in  Abuja.