4 Reasons to Cheer and “Uncheer” Nigeria’s Power Plants Bids

Afam Power PlantThe recent announcement in the media made it known that bids were received and treated for some power plants in Nigeria (read the article here). The event on its own should naturally send wave of excitement through Nigerians who are understandably desirous of better power supply into their homes and factories. Reports of reception of the news are however mixed.

You will not blame Nigerians though for the exhibited ambivalence or even indifference to what should be a cheering news. At least, just over a decade ago, such type of bids were received for telecommunications service in the country, and the whole nation  is much better for that. However, subsequent attempts to privatize or open up other industries – Nigeria Airways/Air Nigeria, Ajaokuta Steel rolling, Fuel subsidy programme, etc – have rather been leaving bitter taste in the mouth of Nigerians not only due to the questionable process of bidding/awards but because hopes are constantly being dashed.

Hoping that there is some level of seriousness to see this round of bidding to fruition, there are actually some reasons to cheer the news:

  1. Power Availability: Since the ownership of the power plants and those of the distribution companies is private, with no more governmental subvention; the revenue drive becomes a must. Of course, without service, consumers PAY NOT. Therefore, respective companies are commercially forced to regularly to provide power. The act of energy provision actually means a lot for the economy.
  2. Job Creation: More like it occurred in the telecom space, the eventual total privatization of the power sector will necessarily create job openings to be expectedly filled by locales. It is also expected that there will be ancillary ventures which operations and survival will be directly underpinned by the deregulated power sector. Hint: there will be lot of requirement for guys with some expertise in electric billing software (operations and development), database development and administration, and of course accounting.
  3. Thriving Small Business Community: It is generally known that small businesses drive economies by providing niche directed products and services, and of course employing throng of job seekers. This sector has been largely moribund due to the crippling cost of power and its unavailability. You have all seen manufacturing outfits relocating to neighboring countries to take advantage of their better power situations. it is therefore expected that small businesses will spring up across the nation; the existing ones can also become more competitive (price wise) since operating costs will largely diminish. We should be seeing lot more of MADE IN NIGERIA things.
  4. Reduced/Eradicated Noise and Air Pollution: This will be a much welcome relief to many neighborhoods and households. The noise and air pollution from the ubiquitous generator sets have not only been killing, but have always been contributing to the decline in the health of many. The constant “jiggy-jiggy” of the generators coupled with their terrible carbon monoxide fumes should be things of the past. May be Nigerians will become healthier and hopefully, wealthier!

However, going by what we all know as the “Nigerian” factor, and government’s and corporate leaders’ insincerity, insensitivity and insensibility to the project Nigeria; people are grimacingly shaking their heads with some reasons to be uncheerful at the news of the bids:

  1. Capital Flight: There is that genuine concern from the masses that there is not going to be any control whatsoever over the coming companies with respect to the percentage of  their profit fit to be transferred back home to their source countries. There should necessarily be an impression on them to reinvest a sizable part of such profit here. We have heard billions of naira being flown across the Atlantic by multinationals in oil and telecoms; their excuse? We’ve paid our taxes! Have they?
  2. High Price: The fact that there are currently going to be few competitors in the power sector, it’s believed that their right to set energy prices (supposed to be influenced by demand/supply and cost of production) may be taken to the extreme with the masses the most hit. We all saw how it was in 2001 with the GSM service talking about the cost of acquisition of a SIM, a phone and of course service charges. Nigerians will expect the government to protect the masses in this regard. We will not mind to pay a fair price for the rendered service, but they should not take undue advantage of our situation.
  3. Jobs In Mirage: The expected benefit of job creation may actually be a mirage considering the fact Chinese companies are winning the bids or in partnerships with the winning bidders. Without being a xenophobe, we may rather see more influx of foreign workers taking up roles not even enough for Nigerians to handle in spite of skills availability. We may only take solace in the other perceived benefits however…….but truthfully there would be job creation and enhancement.
  4. Preferential Treatment of Certain Class: Even though this concern currently subsist with PHCN in that certain areas/neighborhoods enjoy more of the power supply than others for whatever reason; people are worrying that in the hands of the private companies, profit will be paramount. Will there be a just and equitable distribution of energy to all desiring homes and neighborhoods? Will they not shed load away from low income earners areas for the high ones and the industrial estates? You cannot be too sure what to expect.

The ‘uncheering’ concerns nevertheless, the bids are already creating buzzes around the power industry, and hopefully Nigeria will be better for it.

Share your insight on the power reforms and the benefits for Nigerians by dropping your comments below.

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