With just about twenty months left in office, President Buhari and his administration are expected to be in the final push for completed ‘legacy projects’ they would leave behind for posterity. If any such concerns exact the attention of the government, it should look no further than its own faltering Presidential Power Initiative (PPI).
Unlike in other sectors of infrastructure development where the Buhari government had said it is committed to completing major projects ongoing or abandoned by previous administrations, the PPI was conceived from the scratch wholly by this government. It arose from a partnership agreement between Nigeria and Germany during a visit to Nigeria by the German Chancellor, Angela Markel in August 2018. The core objective of this Initiative is to upgrade the operational capacity of Nigeria’s electricity network to reach 25, 000 Mega Watts (MW), and reaching 25 million households by 2025.
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Currently, Nigeria uses only about one-third of the actual energy it produces. We have an installed capacity of about 13,000 MW, but at any given time only an average of about 4,500MW reaches Nigerians in their homes and businesses, a monumental waste of much need resources that is possible only in a country like ours. It is this immediate challenge in the power sector that the PPI was designed to change, however.
When a formal agreement for the project was signed between Nigerian government officials and the technical partner, Siemens Energy in July 2019, it was estimated to be completed in three phases ending in 2025. “The PPI is structured in 3 Phases – (i) quick fixes in the transmission and distribution grid network to increase operational capacity from 5GW to 7GW; (ii) additional upgrade of the grid from 7GW to 11GW; and (iii) upgrade of the grid from 11GW to 25GW including building power generation plants”, according to information on Siemens Nigeria website.
In her remarks during the contract signing event, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, who is also Chairman of the FGN Power Company, a new and independent firm set up by the federal government solely for the implementation of the PPI said:
“Today, I’m pleased that the pre-engineering phase is being commissioned to begin preparations of the design elements. Our implementing partners, Siemens, and the Special Purpose Vehicle – the FGN Power Company, set up to coordinate the PPI activities, are now fully mobilized. They are mandated to set up full project governance arrangements with the beneficiaries including the Distribution Companies, TCN and the Generation Companies,”
Sadly, over two years after those remarks, there are no indications that this all-important project has even taken off the ground, as this newspaper reported last week. According to the report, there is hardly any possibility that even the initial phase of the project which aims for a modest upgrade of our transmission and distribution capacity to 7,000MW will be completed by the targeted end of this year, let alone the upgrade to 11,000 MW by the time this government vacates office in 2023.
But this project commendable must not fail. First, as the Daily Trust report shows, 85% of the PPI’s estimated cost of $2.3bn will come “through a loan from a consortium of German banks”, while the federal government will provide the reminder “15 percent counterpart funding”. This is coming at a time when the naira is in free fall and the overall economy is already groaning under the weight of increased borrowing from external sources,
In other words, the implications for all of these are that if this project fails, as many before it in Nigeria had done, it will entail a huge and unbearable cost to Nigeria and Nigerians. Bank loans everywhere come with interest, and the longer the PPI project lingers without completion, the higher the chances that interests on these loans, not to talk of the principal, will accumulate. We find this bleak prospect unacceptable.
Secondly, over the past six years of his administration, President Buhari appears to have narrowed down his economic policy thrust to focus squarely on the provision of infrastructure. Even during his recent visit to Imo State, the President was cited to have said that he believes Nigeria needs infrastructure first to spur its economic growth. We agree.
But more than that, however, we believe that energy infrastructure, perhaps more than roads, rails and airports, is the most crucial. A country without electricity simply has no infrastructure in the modern world. We, therefore, urge the federal government to stand up to the challenge and step up efforts towards completing this project by its original due date. It took Egypt only 27 months to generate an additional 14,000 MW of electricity. And that project was completed by the same Siemens now contracted to Nigeria.
We think that the Presidential Power Initiative is the most enduring legacy President Buhari can leave for Nigerians forever. This project began through Buhari’s own direct engagement with Chancellor Angela Markel, which ensures that most of the funds needed are already available. It is housed directly in his own office, with the Implementation Committee headed by his own most senior adviser, the Chief of Staff. In other words, President Buhari’s signature is written all over this project. That is another reason it must not fail. Otherwise, it will be seen as a personal failure.
