Nigeria Content Online

Harry Truman said there are lies, damned lies, and then
there are statistics. Still, let’s take a look at some facts and figures.

$13 billion: Spent buying and maintaining our own
self-generation each year.

$10 billion: For capital investment annually for the
next 10 years to efficiently generate, transmit, and distribute the 40,000 MW
we need to sustain real rural/urban development, excluding the cost of gas
transport infrastructure.

$500 million: After attaining 40,000 MW, the amount
needed to match available capacity with demographic growth and meet the
strategic need to maintain a spinning reserve in the electricity system.

N188 billion or $1.2 billion: Appropriated in the 2010
Budget for Ministry of Power capital projects (how much of this has actually
been released is a different matter but, given the experiences in other
sectors, this will probably not exceed 35%).

36%: Percentage of total 2010 national budget that
would have to be dedicated to meeting the above-mentioned $10 billion per annum
capital demand.

39 million: ILO estimates of the number of unemployed
Nigerian citizens (49% of labour force, 27% of entire population).

Some more: Self-generation increases the cost of goods
and services by an average of 40%. SMEs are the engine rooms that drive a
developing economy by creating employment, providing innovation, and
sustainability. SMEs are the immediate proof of the resourcefulness and
entrepreneurial spirit for which Nigerians are well known.

Steady and affordable electricity removes a major
barrier to entry into business for many SMEs and gives the agricultural
industry greater impact on our GDP, enabling it to process cash crops and
livestock for added value, not just for export, but for use internally. Ghana
is now well known as the place of refuge for businesses that have had to run
out of Nigeria due to the escalating costs of self-generation. The IMF
estimates that implementing electricity sector reforms would take us to an
annual growth rate of 15%, double the current 7.5%.

This data explains why the Federal Government can no
longer be the sole financier, owner, and operator of our electricity industry.
If continuous improvement in electricity service delivery and availability
requires spending 36% of the 2010 annual budget, which we know is impossible;
if there are only three sectors in our society – public sector, private sector,
and NGOs; if we accept that both the public sector and NGOs possess neither the
financial nor managerial capacity to sustain a modern electricity system, then
our strategic national interest surely demands the direct involvement of the
private sector in the electricity business.

Looking at telecoms, aviation, and petroleum products
marketing, we see the improved standard of living wrought by sector reform, the
exit of government from business through privatisation, its restriction to the
policy-making and regulatory functions and by the liberalisation of entry into
business by the private sector. One can only imagine the socio-economic
multiplier effects that full reform and privatisation of the electricity
industry would bring about.

When we do not reform, white elephants adorn our
landscape. One excellent example is the billions of dollars spent since 2005 on
the National Independent Power Project (NIPP) programme, with not one of its
414 interconnected engineering projects completed to date. NIPP will break its
promise to deliver 600MW plus associated gas pipeline, transmission and
distribution by 31st December 2010.

Now, the Federal Government is fixed on hydropower
projects. In spite of President Jonathan’s promise not to spend one kobo on
generation in 2011 but to reform and privatise instead, we are now set to
embark on hydro white elephants in Zungeru and Mambilla, both estimated to cost
over $5.2bn.

So, the true cost of delaying or stopping the reform on
the electricity industry is a triple whammy. We flush raw cash down the public
drain and into private pockets. We have much less to spend on necessary social
services. We suffocate the entrepreneurial spirit and strength of character
that would actualise Nigeria’s aspiration to become the giant it has the
potential to be.

There is no computer programme to calculate these
costs, but we see the consequences each day – the extremely high unemployment
rate and the unimaginable social ills that are now a staple of newspaper
stories.

However, the most tangible benefit for you and I, if
President Goodluck can follow through comprehensively on his Road Map to Power
Sector Reform, is the $13 billion we will collectively save instead of spending
on self-generation.

Now, that would be some savings, wouldn’t it? Plus,
being a great leap towards ending our sad story as the giant that almost was.