The Federal Government’s N10 billion proposal for the electrification of 37 federal universities and seven university teaching hospitals across the country came under intense criticism at the meeting of the Senate Committee on Power, Steel Development and Metallurgy, last week Thursday, December 14th, 2017. And rightly so.
At the budget hearing, the Managing Director, Rural Electrification Agency, stated that N10 billion has been earmarked for the project, “Rural Electrification Access Programme in Federal Universities.” While the news media indicated that Senator Enyinnaya Abaribe-led Committee was deeply concerned at the insensitive preference of streetlight for universities, amidst several other priority needs begging for government attention, the Ministry of Power, Works and Housing (MPWH) has since come out with a correction stating that the budgeted N10 billion is for a “Rural Electrification Access Programme in Federal Universities” that is expected to “rejuvenate the education system.”
I would suggest that the concern by the Chairman of the Senate Committee on Power and his colleagues holds great validity, for the following reasons:
First, A review of “Part IX – Rural Electrification” of the Electric Power Sector Reform Act, 2005 (EPSRA) leaves no ambiguity as to its focus on providing electricity to rural dwellers. Indeed, a review of any definition of the word “rural” would indicate a consistency of such areas as being located outside of towns and cities. Thus, the question arises, since when did universities and hospitals, typically located in the heart of cosmopolitan and urban centers, qualify to be considered under the Rural Electrification Agency (REA)’s mandate?
Second, with an estimated 55% of urban areas currently electrified versus 35% electrification of rural areas, should the N10 billion not be put into the Rural Electrification Fund that is specified under Section 88.12 of the EPSRA to facilitate investment in the electrification of these areas that are typically not commercially viable, due to demographic sparseness and lack of affordability? If we are to address the issues that typically bedevil our rural areas – lack of job creation, poor quality of life, fire, health and environmental challenges from the use of wood burning and kerosene lighting up rural homes, etc., surely, funding the electrification of rural Nigeria holds greater value for the use of this money. The use of the N10 billion, would go a long way towards meeting the following objectives of the Rural Electrification Fund – a) Achieving equitable regional access to electricity; b) Expanding the grid and developing off-grid electrification; c) Providing subsidies for consumption that will stimulate innovative approaches to rural electrification, etc.
Third, implementation of the delivery of solar powered energy to the universities and hospitals, comparatively, is not cheap. On the average, wholesale price of solar energy is N39.9/kWh versus N16.9/kWh for on-grid electricity. This fact is even more important when we take into consideration that fact that some of these institutions receive close to 24 hours of electricity supply, as premium customers, in most of the electricity distribution franchise areas where they are located. In plain terms, why should the Nigerian tax payers be saddled with purchasing a product for over 2 times the cost of what is readily available to these institutions?
If anything, this N10 billion solar power proposal by the Ministry seems to be another in the increasingly inexorable march by the federal government back into state-ownership of generation assets (on the back of the General Electric fast power project that is being funded by the federal government), contrary to the privatisation objectives of the National Electric Power Policy, 2001 (NEPP) and EPSRA. The policy and the law resulted from a recognition that the government, due to decades of inefficiency, wastage of taxpayer funds and corruption, in operating the state-owned electric utility company, Nigerian Electricity Power Authority (NEPA), has no business operating in a sector that should be private sector driven. Unfortunately, here we go again.
Fourth, one is not sure how the expenditure of the proposed N10 billion equates to the rejuvenation of the educational system, as stated by the MPWH. I agree that such rejuvenation is critically needed in a nation that has seen a dramatic decline in the quality of the education that its citizens used to enjoy. I would suggest, however, that greater impact for such rejuvenation can be best achieved by investing in paying teachers better salaries, providing academic supplies, re-establishing higher standards of academic excellence, rehabilitating physical infrastructure, etc. – these are the mandate of the Ministry of Education. Additionally, if the objective of the N10 billion initiative is to “rejuvenate the education system,” does the MPWH also plan to subsidize private institutions, for equity and for the achievement of comprehensive results?
Unfortunately, this proposal comes at a time when the power sector is facing critical and strangulating financial challenges to building the capacity for the sustainable electricity supply that will drive the growth of our economy. The liquidity constraint means that the electricity value chain continues to be deprived of the funding needed to inject the efficiency that is desperately needed in the sector. As a matter of fact, the Nigerian Electricity Supply Industry (NESI) is burdened with a market shortfall that may eventually collapse the sector, without reasonable government intervention.
In view of this, I would suggest that the N10 billion can be better and efficiently utilized by the government in expanding the national grid, by building up the capacity of the Transmission Company of Nigeria (TCN), a wholly government-owned company, to wheel energy sustainably and reliably, given its history of being consistently underfunded and its critical role in the value chain. Alternatively, the money could be applied to subsidizing the consumption of the lifeline electricity consumers, who struggle with electricity affordability issues, as seed money for the Consumer Power Assistance Fund (CPAF), which still has not be set up, as a fundamental requirement of EPSRA. REA, going outside of its mandate, endangers the hopes of rural dwellers for electricity that will improve their lives and creates opportunity for wastage of funds that are desperately needed for priority projects in the sector. In this era of “Change” as a mantra or common refrain, we must move away from politicized and ill-thought out policies to that which holds the greatest good for greatest number of our citizens.
Thus, it is easy to understand why the Senate Committee on Power, like many Nigerians and major stakeholders in the sector, cannot understand why REA wants to spend a huge amount of money to provide solar power in universities and hospitals when rural communities that require electrification, for which the agency was created, are left in darkness – whether its proposed N10 billion initiative is for street lighting or rejuvenating the educational system.
Samson writes from Konoko Crescent, Wuse 2, Abuja