Monday, June 23, 2008

Earlier this month, Yar'Adua confessed that Nigeria will not get regular power supply until 2011. I might not understand his comment, but even my favorite National Assembly member, Patrick Obahiagbon reacted by saying,

"There is no gainsaying the fact that the good people of Nigeria are righteously indignant of the epileptic state of power supply in the country and from that pedestal, it becomes germane for them to expect some kind of urgent solutions to this incubus and I am in perfect agreement with my countrymen."
Now although some, Obahiagbon included, might be put off by Yar'Adua's declaration, I, for one, appreciate it greatly. Nigerians now have a clear deadline with which they can hold the Yar'Adua administration and all public officials accountable. Despite my 'positive' perspective on this issue, Yar'Adua's plans to achieve this '2011 power mission' is drawing significant negative press, especially because of the plans to tap into the excess crude account.

The excess crude account was created to save profits made from the sale of oil to be used by Nigeria's 36 states, many local governments and the federal government. A spokesperson for the administration specified that the government will use $5.37 billion from the account to finance projects in the power sector, while $4.8 billion will be shared amongst the various states. This will not be the first time that the administration has tapped into the fund. The first time was last year when $1 billion was shared amongst state governors who had complained that their coffers were empty.

Although Yar'Adua declared a state of emergency due to Nigeria's failed power sector, the announced plans to use the excess crude funds is raising some key issues and the ire of some. Firstly, there is the obvious inflation risk. A sharp increase in domestic spending, while beneficial to national development, could, if unchecked, cause fiscal problems which would derail the economy from the much needed stability it currently has.

Secondly, there is an ongoing debate amongst some about whether or not the excess crude fund is a legal entity to begin with. This debate is predominant in the Senate and Senators like Ahmed Lawan have publicly expressed their concerns about the legality of the account. Many have gone as far as to push for the dissolution of the account all together.

Thirdly, the announcement that the federal government will work in partnership with the Africa Finance Corporation to develop the power sector with private funds has prompted probes in the National Assembly and media attacks on those who support the venture.

I believe that the mere fact that there will be opposition or that there will be ‘wahala’ should not be reason enough to not aggressively tackle and solve Nigeria’s woes. All we can do is hope for the best and apply ourself if and when called upon to make the dream of a bigger and better Nigeria happen.

Unfortunately, this optimistic approach alone will not help Yar'Adua meet the 2011 deadline. He will have to do a serious political dance to achieve the objective. That might include dealing with individuals who are directly tied to the predicament the power sector, and Nigerians, currently face. But, one key thing Nigeria's President will have to do is overcome the public impression that he is not strong or powerful enough to deal with the various 'principalities' that are major players in the country. If we are to assume that his objective is truly to advance Nigeria by improving the power sector then, Yar'Adua will have to twist the arms and maybe even ears of those who are not interested in national progress or simply do not agree with his plan and get them to fall in line so as to achieve the stated objective.

Can he do it? I will leave it to readers and others to come to their own conclusion. Nevertheless, Nigerians had better pray and/or make the necessary sacrifices to whatever God/gods they serve for Yar'Adua to accomplish his goal of regular power supply, or some semblance of it, by 2011.

Further Reading:
- More Solar Energy Plans
- Solar Energy Plans
- Could Coal Be A Power Solution For Nigeria
- Nigeria Is Full Of Gas
- Power Blackouts Loom Across Nigeria
- Nigerian Power Scandal: Authority Stealing
- Who Will Develop Nigeria?
- Who Will Develop Nigeria Pt. 2

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Anonymous said...

The $5.37 billion that will be used to finance projects in the power sector gets a pass-mark and I don’t think the "inflation-scare" carries much weight. This is money that is potentially well-spent.

What is disturbing to me is the need to pull people like Agagu and Imoke into the Yar'Adua emergency power initiative. These two will monitor the projects under Yar'Adua's plan as discussed on Grandiose Parlor blog.

The inclusion of those men defeats the purpose of the House of Representatives' probe, in fact makes mockery of it. After all, Agagu and Imoke were Ministers-in-charge of the Power under OBJ, and it was under their watch that several billion dollars on lousy power projects.

Didn't Agagu award contracts and paid 36 bogus (unregistered) companies?

Didn't Imoke disclose that there is no natural gas for the power plants being developed, because the oil and gas companies have "sold" their future stocks, and it may be up to seven years before the federal government can renegotiate its contracts with the oil companies?

For Yar'Adua to do an excellent job, he needs to not only deal with the mundane politics of the Excess Crude Account, he has to step out of the box to execute his agenda, well, if those agenda are robust enough to withstand the influences and manipulations of the political class and special interests.

If Yar'Adua hopes to make a significant impact on the power sector, he can not go about "business as usual" ... so far, he has yet to do this!


@ Imnakoya: When I read your post on Agagu and Imoke, I agreed with you but wondered whether or not Yardy had no choice but to do 'deal with the devil'.

That is why I asked you about that question. I was under the impression that because funds from the excess crude account is to be used by the local, state and federal government, Yardy had no choice but to get the support of every governor to achieve his power by 2011 mission.

However, after reading your response to my question at Grandiose Parlor and reading your comment to my post here, I decided to go find the answer to my question. I now know that yes, Yar'Adua needs Agagu and Imoke to support his new power scheme, but Yardy did not need to include both governors in the Implementation Committee that is charged with ensuring that funds be used to solve Nigeria's power problem.

Consequently, I agree with your sentiment that the choice by this administration to include "[t]hree governors who also served as ministers of power in the past" (ThisDay online) is a flawed decision on its face. Particularly as these individuals (including Danjuma Goje) can directly be tied to the failure of the sector we witness today.

We will have to ask more questions and encourage our readers and others to think critically on this issue. I can't help but wonder why Aondoakaa is also on the committe. As Attorney General couldn't there be a potential conflict of interest if there are legal issues or problems that arise in the future?

And, I wouldn't downplay the inflation risk. I might not be an economist, but I know that inflation can sneak up on you if not properly managed.

Anyway, thanks for taking the time to read and share your insight. Much appreciated. Take care.

Anonymous said...

it can be accomplished... 3 more years is not too long... we shall see...

Anonymous said...

Inflation has increased about 1% over the last 12 months according to reports. This where the CBN comes in. But should we be so scared of inflation and not spend to improve our infrastructure?

"I now know that yes, Yar'Adua needs Agagu and Imoke to support his new power scheme..."

Agagu and Imoke have to fail-in line with their boss, the C-in-C, not the other way round.

Let me ask, what support are they going to render any way? Do they have any special expertise?

ababoypart2 said...

The answer to the topic is NO. Yes we have a clear deadline, one that will be bulked up with excuses for yet another failure. Yardy, with all due...hasn't got a ..., well lets still give him more chances and time.

Atutupoyoyo said...

When I think of sustainable power and electricity in Nigeria, I think of two words - Femi and Otedola.

As you know good old Femo is desperately poor and could do with some extra cash. What happens if the demand for diesel drops markedly when fewer people need generators? How will the poor diesel prince feed his family?
How about the destitute generator importers and assemblers? How are they expected to send their children to school? How will Papa Tobenna explain to little Tobenna that he cannot buy him a birthday present that year because nobody is buying generators anymore?

I am being facetious but as long as so many powerful (and I assure you they are very powerful) individuals have a vested interest in irregular power supply in Nigeria, Yar’Adua ain’t accomplishing nothing by 2011 nor is his successor.

NneomaMD said...

SSD, I am very much responses to posts have been erratic for some time now.

In regards to the deadline....I personally find it comforting that Yar'adua admits that it is not a overnight solution and will probably take a couple years...or more. Those claim otherwise are trying to delude their constituents or are themselves deluded.

However, as much I as I am for looking to ourselves for solutions, I would suggest that at this point, we should also look to international bodies/groups to help with our chronic power failure - at least for the interim until we are able to stabilize the power sector . As much as we all appreciate Yar'adua's honesty, holding Nigerian progress till 2011(since constant power fuels the economy and also academia) is not desirable in the least. Although the word, alternative energy source is overplayed these days, I think Nigeria can make the case for the need to try out some of these power sources in the interim, until the entire nation is able to get its act together.

By the way, any word on that solar energy project in the North (you had a post on it some time ago...but no one could find info on the New Jersey company contracted to complete the project....or I might e mixing up my blogs). Pilot programs such as these can be put into place for the interim - at reasonable cost. Who knows - Nigeria may be poised to take the continent by storm when it comes to innovating such ideas....(that's the hope in me talking again....oh, hope....)

NneomaMD said...

I read over my post, and realized I am missing a few words....summer vacation is not good for the mind....

TheAfroBeat said...

Nigerians have managed in 20+ years of darkness, we can do 3 more if we know the end is in sight. The $85bn is the one i'm still trying to figure out.

Anonymous said...

Yardy has a huge problem in that I cannot see who he surrounds himself with. Any wise leader, surrounds himself with a wall of solid counsel from honourable and competent men. Second, he is a president and the peak of power. He should behave as one. Until I can see this in him. I am not depositing my hopes of a power sector renaissance in him.
But to more critical issues. The constituents of a board will tell you the quality of decision making to expect. What competence or expertise has Agagu, Imoke, or Goje on matters of power? There are seasoned Nigerians enhancing that sector in other nations and are willing to serve but lack an entry point. The power of a huge country like Nigeria is a complex phenomenon that needs planning for a 100years forecast. We need competent men to do this, else 10 years down the road we'd be lighting candles again.
Next. we must know at what stage the global discussion on power rests. The world is talking about clean and renewable power generation: Solar, Wind, Nuclear. I doubt if these fall within Yardy's considerations. We must look at alternative means of power generation by a careful study of the topography of the country and implement solutions that are area specific. Implementing a uniform power system in Nigeria is a big error that will leave us desperate after a few years. The north is different from the south where we have water. There is more wind in the north and more heat as well. That says something to us.
This is not the exact forum for me to outline these issues, but let Yardy lay down his plans for all Nigerian's to see first and bless then pursuit will be easy because people will support and sacrifice for its success.

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