Experts Say Steady Power Supply’ll Boost Economy

Economists have predicted that if Nigeria gets its public electricity grid working 24 hours, the nation would greatly reduce business costs by up to 40 percent and add up three percent to GDP.

This is will also cut unemployment that seems to fuel social unrest in nearly all six geo-political regions of the country.

Dayo Samuel, of the department of Economics Education at the Adeniran Ogunsanya College of Education, Ijanikin (Lagos) noted that Nigeria’s man-hour lost as a result of the poor national power supply cannot be quantified.

“But I bet you, if this president is able to fix the power challenge as his singular achievement, you’ll see an accelerated growth in national productivity. I believe we could achieve up to four per cent increase in gross domestic product (GDP) and cut unemployment drastically,” said Samuel.

But Afiz Olaosebikan, of the department of Economics at the Lagos State University, Ojo while agreeing that Nigeria could achieve dramatic increase in GDP if power is fix, does not share in any optimistic expectation of that realization.

“Honestly, I don’t see any increase in power generation during the life of this administration. The president appears more of a talking man than working. I’d like to see practical steps towards his projection of achieving 10, 000MW by December 2013. I don’t see that target being achieved,” said Olaosebikan.

Some experts have estimated that Nigeria spends a whopping $13 billion yearly on imported diesel to run factories. This estimation does not include domestic usage which could run even higher.

Already, President Goodluck Jonathan is rethinking the attainability of the much taunted Vision 20:2020 goal inherited from former President Olusegun Obasanjo. The vision document envisioned that Nigeria could attain a global top 20 economic power status by 2020.

So far public power supply from the national grid has grown from less than 3000 MV in 2010 to about 4000MW, still a far cry from the projected 10, 000MW by December 2013.

Penultimate week, the President hosted a group of private investors at the Presidential Villa, in Abuja where he laid out the planned cannibalization of the public electricity company, the Power Holding Company of Nigeria (PHCN), to about 17 distinct generation and distribution firms.

Although Nigeria is expecting to reap in excess of $2.5 Billion from the PHCN balkanization, the process of auctioning these firms has raised issues of transparency with several leading political bigwigs and their business cronies as major beneficiaries.

Unlike the 2001 GSM auctioning process which was globally acclaimed as very transparent and has seen the country leapfrog as one of the leading mobile markets in the Middle East and Africa (MEA) region, and one of the fastest growing telecom investment ports of destination, the electricity project hasn’t been that fair.

Yet there seem to be a gleam in the horizon especially with the technical presence of multinational firms like GE, Siemens, Schneider Electric and Manila Electric.

President Jonathan told the investors that Nigerians would not take anything for less, except they begin to see power like their mobile phones. “Much has been achieved, yet the race will not be over until Nigerians can take electricity supply for granted,” said Jonathan.

Last Friday, the President assured Nigerians on his facebook page progress was being made on the national electricity project.

“Two weeks ago, I hosted the Presidential Power Reform Transactions Signing Ceremony. The five power generation companies that emerged successful in the bidding process of the privatization of the sector received their certificates and are set to run their companies in a way as to guarantee electricity for domestic and industrial use even as the world is celebrating the transparent bidding process that culminated in the signing.

I want to assure you my friends on facebook that we shall put the darkness of these past decades behind us in no distant time. We shall only keep a forward movement in the critical sectors of our economy and may Almighty God help us all.”

Elsewhere, appallingly, Nigeria’s current 4000MW power output is comparably a tenth of the continent’s economic powerhouse; South Africa whose population is just about a third of Nigeria’s 160 million.

David Ladipo, an investor, whose company Azura is spending $700 million to build a 450 MW plant told an international wire agency: “It will probably take Nigeria another 50 years before it attains the same level of electricity consumption per capita as South Africa currently enjoys today.”

Last week workers union of the now defunct PHCN threatened to throw the nation into total darkness if government goes ahead with plans to lay off about 20, 000 staff as demanded by some of its core investors despite assuances they would be fully paid off.

Both the World Bank and the African Development Bank (AfDB) are investing substantial sums into the power project and expectations are that Nigeria’s horizons would be brighter soon.