For adequate Electricity and Landline Telephone in Nigeria
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t is only of
recent the Federal Government appears to approach the issue of electricity
problem in our country, Nigeria, with apparent seriousness. Before, the
Government never thought about execution of any required expansion and modernisation.
We do not need to remind anybody that electricity and landline telephone are
essential need in the country for which we ought to have a continuous plan and
action. Such plan should embody the amount of electricity we need at a given
level of population, development and the economy.
Although it is
the responsibility of the Federal Government through the Power Holding Company
of Nigeria (PHCN), it is of national interest for the Federal Office of
Statistics to collect information as to the rate of our electricity usage. This
should be projected into different phases of population growth and development
in the country.
In a country
where elections are not rigged; there is
right leadership and right people in the Government; the ruling class is not corrupt and willing to execute honestly; were
there the right plan and action as to the amount of electricity and landline
telephone we need at each point in time; today we would only be implementing in
advance the plan of the next phase as we approach it in order to meet the need
at the given time, which would have been minimal.
Today, earning
from natural resources is said to represent about 80% of the country’s total
revenue. With full capacity electricity and landline telephone, with the huge
population, as many Nigerians are generally hardworking and entrepreneurial;
earnings from natural resources would only form about 30% of the country’s
total revenue. That is, as earning from natural resources is maintained at the
present level, the country’s total revenue will be 2.67 times what it is now.
Earning from natural resources would not form the critical and dependable fund.
We have
different types of mineral in our soil. If these are extracted adequately and
efficiently PHCN should be able to maintain adequate and cheap electricity
supply by using them as raw materials. We do not need to embark on
sophisticated and dangerous methods such as nuclear energy project in order to
generate adequate electricity in the country. In as much as we need adequate
electricity we must also take measure to safeguard our health, environment and
future of the country. We may have learnt by now that no nation can be built or
advance economically and technologically without adequate and reliable
electricity supply and landline telephone, on which the facilities that
facilitate productivity today depend, more than ever before.
In the event
we are unable to generate enough electricity in the country to meet our need,
we should make provision to buy in the shortfall elsewhere from already
generated electricity. With this, the
country will never be short of electricity supply. Today many European
countries that were using this in small scale to obtain generated electricity
from thousands of miles outside their shores have now embarked on it in large
scale. This is in anticipation of meeting their projected future need of,
cheaper, electricity.
The measure
was also informed by their desire to gradually phase out the use of coal and
nuclear plants. They have discovered that adequate electricity can now be
tapped successfully from underground rocks, volcanic activity, coal and gas.
This is without the normal mining and extraction activities. These are the new
technologies that are coming upstream. As the Federal Government has dragged
the execution of its National Integration Power Project (NIPP) for more than ten years now without
completion, it may soon become an old technology even before completion, where
spare parts for its maintenance are costly and difficult to obtain.
The Federal Government made things
difficulty for itself in the process of the provision of adequate electricity
and landline telephone. Before the Government embarked on the current new NIPP
that is today apparently stagnant and which trillions of Naira is being sunk
yearly, it ought to have left the existing plants intact. The Government ought
to have fully maintained the plants while the new project is being executed and
to be switched to only on its completion. But the Government and its PHCN
neglected the plants. The new machines and equipment that were bought for their
maintenance were left to rot while electricity supply in the country
deteriorates.
Different parts of the country
require different amount of electricity usage. The NIPP, which is geared
towards sufficient electricity, ought to have first been established on zonal
basis. The project ought to have first been completed in the areas that need
and use electricity most in the country rather than to have taken on the whole
country simultaneously. For example, the new plant would have been first
installed in Lagos State, Niger Delta and Abuja, the most economic hotchpotch
of the country, while the rest of the country depends on the existing plants. But it is only on completion that the
network should be connected on to a national grid, perhaps, to feed one another
where the other is short of generated electricity.
For us to
maintain full capacity electricity, we need to have at each designated zone a
large generation plant with capacity to supply the area. This should be
supported by the existing smaller plants in the zone as substations. Where the
main generation plant is not in operation, the substations generation plants
would assume temporary or relief supply. In this respect, Lagos State, Abuja,
South West, South East, Mid West, Niger Delta, Middle Belt West, Middle Belt
East, North West and North East should each be a designated generation zone. In
times of shortfall in a zone, it can obtain electricity supply through the
national grid network.
Both PHCN and Nigeria
Telecommunication (NITEL) corporations are monopolies in the country. They
ought not to have any serious problems, financial and otherwise. The problems in these Corporations centre on
poor management, maintenance,
organisation, revenue collection and corruption. It is not as such lack of fund for investments in the corporations.
The ability to manage successfully is there in the country but the tendency
to manage honestly is not there. To be in senior and strategic post in our
public corporations, you have to come from the privilege class. It is not that
these people do not necessarily have the requisite educational qualification
but they lack the requisite training, experience and ability to manage. They
are untouchable especially when they do not perform or when they do not account
for generated fund.
How can a
plant work if the component part that is due to be replaced is not or replaced
with a substandard spare part? How can a plant work if when it is due to be
serviced it is not? How can the corporations that are monopolies in the country
and supposed to have abundant fund but cannot generate fund? All these are
because of poor management, bad debts, poor collection and misuse of the
collected fund. With more than the sufficient
revenue the monopoly corporations generate, they should be self-financing. But
majority of their major customers do not pay their bills. These are generally
the Federal Ministries, Departments and Agencies, National Assembly, State and
Local Governments. The private sector debts of the corporations are minimal.
The inability of PHCN to give
sufficient electricity to the country or NITEL to provide adequate and
efficient landline telephone is not as a result of the public ownership but a
management problem. The two corporations were and are short of the right
management and proper Federal Government supervision. The other problem of PHCN
is not as such the generation and transmission of electricity. The problem of
NITEL is not the cable system for telephone lines. Their main and other
problems are distribution and collection of bills.
Here it will be better for the
country if the Government handles the generation and transmission aspects of
PHCN and the cable system aspects of NITEL than the private sector. This is
because the two are capital intensive. As at today and the way the private
sector still is in the country, only the Federal Government can sufficiently
and cheaply provide their fund. They do not require frequent major investments
but necessary maintenance, high level staff and management. The private sector
would better handle the distribution aspect of both PHCN and NITEL which is
less capital intensive, requires retail management and generally low level
staff.
Therefore, in our quest to
restructure the two public corporations, the electricity generation and
transmission aspects of PHCN and the cable system aspect of NITEL should be
100% public owned. But the distribution aspects of both corporations should
be100% private owned. This is where the public owned generation and
transmission aspects of PHCN and sell the generated electricity at wholesale
price to the private distributors. The public owned cable system of NITEL would
lease or rent the related telephone landlines to the private telephone
companies. These private concerns would then distribute to the final consumers
and collect their bills. That is only the distribution aspects should be
privatised.
We live in a tropical climate that
carries heavy storms, rainfalls, thunder and lightning. We should now use this
opportunity to lay the electric and telephone cables together with their
distribution wires under the ground. These should be done especially in the
built up areas, cities, towns and villages. Some of the valid reasons for this
are that electric cable carries heavy load of magnetic field and this is more
exposed when it is connected overhead.
It is not only very dangerous but also a health hazard to those who live
very close to the line. Overhead cable magnetic field is capable of attracting
thunder/lightning that can cause fire and thereby disrupt the flow of
electricity. It is liable to be damaged by heavy storms. We have already
experienced a number of casualties from electric poles that fell accidentally
by heavy rain and storm. This must not be allowed to repeat by retaining
overhead electric cables and wires. Moreover, underground electric cable layout
makes the environment tidy.
However, the
public owned PHCN generation and transmission and NITEL cable system would be
responsible for underground layout of their main cables throughout the country.
This is a function that is carried out once in many years of the life of the
transmission cables, other than sporadic repairs when necessary. The private
distribution companies would be responsible for the underground layout of their
individual supply cable lines to their individual customers.
To privatise only the distribution
aspects of both PHCN and NITEL corporations, each should be broken into say
about six different private distribution companies. Each of the companies
should have ability to operate in many parts of the country. They should be
capable of being quoted at the Nigeria Stock Exchange. The shares of the
distribution companies should be sold to the general public. They are public
owned. The public has the first and foremost rights to buy the shares of the
privatised distribution aspects of the corporations. There is no need for all
these biddings that would end up in one or few do nothing hands. The realistic
price or market value of each of the distribution aspect of the corporations
should normally be the nominal price plus premium, which the general public
would subscribe.
In the process, individuals should
buy equal and a limited number of shares. This could be about 25,000 shares per
person. The buyer can only sell the shares after a determinable period. The
individual private subscribers for the shares of the distribution aspects should
come equally from each of the six geo-political zones in the country. With
these types of arrangement, the Government would get the right fund from the
privatised distribution aspects of the corporations. There will not be any controversy about the price,
sales and ownerships.
For example, if the realistic value
of each of the distribution aspects is say N300bn or $2bn and the nominal share
price is N1 each, the total shares will be 300bn. At 25,000 shares per person, you
will get 12million subscribers. If the shares are sold at nominal price plus
premium say N2 each, you would raise N50,000 per subscriber. The total sales
revenue would be N600bn or $4bn. (300bn shares x N2 = N600bn), (N600bn/N150 =
$4bn). Is it not better to privatise the distribution aspect of PHCN and NITEL
in this manner? The actual amount of fund needed for the two corporations would
be realised. Compare this with the very much lesser amount which each of the
whole PHCN and NITEL are about to be given away by the Government.
The number of shareholders for each
distribution industry could be reduced from12million to any number the
Government desires. If the shares per subscriber are:
With any of these the Government
would still obtain the N600bn or $4bn price tag above.
However, with the fund that is already at the disposal of the Federal
Government and this method of shares issue, the necessary fund needed to fully finance each
of the corporations’ projects to give us full capacity electricity and landline
telephone that are actually needed now could be met. Many Nigerians
would find it easy and cheaper to buy shares this way. They will be proud to
own shares in these companies with assured market, revenue and whose shares
value would not be at a loss anytime at the Nigeria Stock Exchange. Those
Nigerians abroad who understand share ownership and the related trade quite
well would rush to buy through their families and relations that may not afford
to buy.
Were the previous privatisations in
the country carried out in this manner through public share issue, we would
have been able to raise the right and huge amount from them. The general public
shareholders would have been able to appoint the right management for the
companies. They would have been able to supervise and monitor the companies for
continued success. How many of the previously privatised public establishments
at giveaway prices to selected few and privileged individuals are today still
in the same business? They have stripped the assets of the companies,
disappeared and left an army of jobless and empty treasury for the
country.
Moreover, these preferred bidders do
not have their own money to pay for their biding price let alone the money they
will invest in new infrastructure, maintenance and even operational
expenditure. They rely much on borrowed fund from the banks to pay for the
bidding price. The bidding price is not retained in the privatised companies
but paid to the Federal Government. All what the bidders anticipate is the
revenue from the companies without thinking about the assets to generating the
revenue. These loans to be repaid, lack of assets, shortage of cash-flow and
cash plundering, and eventual asset stripping by the owners are the centre of
the failure of the privatised public concerns in the country. Yet the Federal
Government has not leant any lessons.
The Federal
Government, on behalf of the public should own the generation and transmission
aspect of PHCN and NITEL in different companies. Institutional investors, both
at home and abroad, should be asked to come and take up, Cumulative Preference
Shares in the various generation and transmission companies. If there are
existing genuine and worthwhile privately owned generation companies, which are
not mere paper companies, the Government should take them over. The owners
should not be given cash but Preference shares.
With these, we will be able to get the fund we need to establish the
full capacity electricity of whatever megawatts we need in the country today.
The Federal Government should stop and forget these biding by few people, quack
companies and companies owned by those that have failed the country, do not
have their own fund and only out to take, buy and strip the assets.
As I always say the means to do what
we need to do are at home with us. Whatever the situation today, Nigeria can
still boast of a sizeable relatively economically active populace. Even if the
Government does not have the cash in hand now to execute the full capacity new
projects of electricity and landline telephone, it could borrow from the
foreign reserve fund and replace the money as soon as subscriptions for shares
are collected. With these means, we do not
need to wait for the year 2020 before we have full capacity electricity and
landline telephone if at all. But on what would the country, her development
and economic growth depend till then? Without adequate electricity and
landline telephone we are going nowhere economically and technologically.
Alfred Aisedionlen. (23rd May 2012 and repeated on