Since the inception of Democracy in 1999, successive governments have made promises of a stable power sector. However, little has been achieved and the country continues to grapple with the sad realities of a dysfunctional power sector.
Not only that, the sector is also a hotbed of corruption with billions of dollars invested only finding its way into private pockets.
In a 2016 report by the Socio-Economic Rights and Accountability Project, SERAP, it was revealed how over N11 trillion meant to provide regular electricity supply was allegedly squandered under the governments of former presidents Olusegun Obasanjo, Umaru Musa Yar’Adua, and Goodluck Jonathan.
Inside Nigeria’s cash cow
According to the report, “The total estimated financial loss to Nigeria from corruption in the electricity sector starting from the return to democracy in 1999 to date is over Eleven Trillion Naira (N11 Trillion Naira). This represents public funds, private equity, and social investment (or divestments) in the power sector. It is estimated that may reach over Twenty Trillion Naira (N20 Trillion Naira) in the next decade given the rate of Government investment and funding in the power sector amidst dwindling fortune and recurrent revenue shortfalls.”
The 65 pages report showed that “The much-publicized power sector reforms in Nigeria under the Electric Power Sector Reform Act of 2005 is yet to yield desired and/or anticipated fruits largely due to corruption and impunity of perpetrators, regulatory lapses and policy inconsistencies. Ordinary Nigerians continue to pay the price for corruption in the electricity sector–staying in darkness, but still made to pay crazy electricity bills.”
The report accuses Ransom Owan-led board of the Nigerian Electricity Regulatory Commission (NERC) of allegedly “settling officials with millions of Naira as severance packages and for embarrassing them with alleged Three Billion Naira (N3,000,000,000.00) Fraud. The authorities must undertake a thorough, impartial and transparent investigation as to the reasons why corruption charges were withdrawn, and to recover any corrupt funds.”
The report also called for the reopening and effective prosecution of corruption allegations, including the alleged “looting of the benefits of families of the deceased employees of Power Holding Company of Nigeria (PHCN) levelled against a former Permanent Secretary in the Ministry of Power, Godknows Igali.”
The report reads in part:
“The Obasanjo’s administration spent $10 billion on NIPP with no results in terms of increase in power generation. $13.278,937,409.94 was expended on the power sector in eight years while unfunded commitments amounted to $12 billion.”
“The Federal Government then budgeted a whopping N16 billion for the various reforms under Liyel Imoke (2003 to 2007) which went down the drains as it failed to generate the needed amount of electricity or meet the set goals. Imoke was alleged to have personally collected the sum of $7.8 million for the execution of the contract for the construction of the Jos-Yola Transmission Line, which was never executed. There were documented/reported allegations of corruption against Imoke that fizzled out shortly thereafter.”
“Professor Chinedu Nebo handed over the assets of the PHCN to private investors on November 1, 2013. Prof. Nebo is alleged to have corruptly funded the privatized power sector with over N200 Billion despite privatization. The allegation of N200 Billion funding of the privatized power sector during Prof Nebo’s tenure should be thoroughly and transparently investigated and anyone suspected to be responsible prosecuted. Any corrupt funds should be fully recovered.”
“Our research revealed that the sum of N1.5 billion with which the vehicles were acquired was allegedly sourced from the diverted N27 billion insurance premium of deceased workers of the defunct Power Holding Company of Nigeria (PHCN).”
A promise to indict
President Muhammadu Buhari in 2019 while campaigning for his 2nd re-election made a promise to bring that those involved in the wastage of over 16 billion dollars in the power sector without any meaningful results under the previous administrations to book after proper investigation.
Although the president did not mention whose administration spent the money, the administration of former President Olusegun Obasanjo was in power when the projects were initiated and executed.
Buhari said: “You know there was no power under the previous administrations, and a previous government admitted without anybody asking them, that they spent $16 billion for power. You know more than I do – Where is the power? Where is the money?
“My point is on bribery and corruption, which is one of my three areas of focus. Those people who say they spent 16 billion dollars on power, will account for it.
“Yes, we are under a system now. Those who have been given responsibilities, in the three tiers of government; the Federal, States, and Local Governments as they are busy, we will ask anti-graft agencies to investigate and prosecute them.
“We have already done a lot of cases, you know it, they came here and bought properties here in Abuja, and they invested outside the country.
Deal that might change things
In an effort to permanently light up Nigeria, the Federal Government in July 2019 signed a power project deal (PPI) with Siemens AG with the aim of increasing Nigeria’s electricity generation to 25,000 megawatts (MW) in six years.
Siemens says it will upgrade 22 transmission substations in Nigeria in addition to the 11 new ones to be constructed under the presidential power initiative (PPI).
The power project will have three phases: to take Nigeria’s operational capacity of the grid from less than 5,000MW to 7000MW by 2021; further, increase the capacity to 11,000MW by 2023, and achieve total operational generation and national grid capacity to 25,000MW by 2025.
In July 2020, President Muhammadu Buhari approved the payment of €15.21 million and N1.708 billion as counterpart funding for the PPI.
Speaking on the new development, an official of Siemens said the pre-engineering phase of the project would be completed in 10 months.
“The Presidential Power Initiative is going well. We are doing the pre-engineering. Pre-engineering is to design before you go to execution,” Suleiman said.
“We are not adding any generation capacity but we want to make sure that we fix the dilapidated transmission and distribution networks.
“We are doing the pre-engineering for the distribution network of this country. We have already got a letter of credit from the Federal Government to start it.
“The design is done in our head office. For the transmission scope, we were given initially 11 sites; they have added 22 sites.
“Execution is when you go to sites. But in the next three months, we want to start putting the proposal for phase one together, not when we finish the pre-engineering.
“So, if phase one goes into reality before the end of the current administration, it means we would have been able to move from 4,500MW to 7,000MW.”