Power and energy generation tops the Seven Point Agenda of President Umaru Musa Yar’Adua. This ambitious plan hopes to develop sufficient power supply that will hasten Nigeria’s transformation into a modern economy come 2015. Unfortunately the reality is that government may not be able to achieve this goal. Consequently, the economic viability of generator sales in Nigeria will continue for quite some time.
There is simply no power to go round. The entire energy generation capacity of the 48 countries of sub-Saharan Africa, at 63 gigawatts is comparable to that of Spain. If South Africa is excluded, sub-Saharan African generation capacity falls to 28 gigawatts, about the same as Argentina’s, said the IMF. No wonder, manufacturing firms in Nigeria consider inadequate infrastructure, particularly power, as their most severe constraint. Half of the trade between Nigeria and England – £500M – last year was on generators.
In Nigeria, there are two sources of power – public and private. In the case of publicly provided power, the Power Holding Company of Nigeria (PHCN) produces electricity at a relatively high cost of 11 US cents/KwH compared to an international average of about 5–6 cents/KwH. The company is allowed to charge only 3.5 cents/KwH, and is supposed to receive the rest as a government subsidy. Ostensibly, generating power privately seems more expensive but the hidden costs of publicly generated power e.g., uncertainty, the long and unending absence, the impossibility of seeking legal redress etc., make it a daunting alternative. Hence, it’s preferable to have PHCN as ‘stand-by’.
Each household in the country operates like a municipal council. The success of each council depends on its ability to provide and maintain basic utilities. My municipality has been very efficient, we supply power for ourselves (generator), water (through a borehole), security (vigilante groups), we dispose our refuse (by hiring a waste contractor) and also provide communication facilities (GSM). We have also been very efficient in maintaining the drainages and we may soon start constructing our roads.
My days of darkness began when my generator went kaput and it took one week to replace it. I was naïve to think that as soon as we paid, the generator would be installed within 24 hours as promised by the company. As the payment was made, the generator company showed its true colours. First they sent us an installation bill which was half the cost of the generator. When we queried this, we were threatened that the warranty of the generator will be withdrawn if we don’t comply.
My municipality had to act fast, that means meeting with the generator company, located in Ikeja, Lagos. Mr Generator was impressive to behold, his weight and height was intimidating. We had to stand for some minutes before we were ushered into his office. Mr Generator had to joggle between answering phone calls from his three mobile sets and one land line. It was a delight to watch him switch from English to Yoruba and even Arabic. Each of his sentences was punctuated with a polite ‘yes sir’. It took us only 30 minutes to have his attention.
After a lot of haggling, we were able to down size Mr Generator’s bill which included provision of new cables (that were inferior and of a smaller diameter), the replacement of the change over switch and the construction of a brand new concrete base. On average, generators accessories such as cabling represent some 22 percent of the total value of equipment and machinery. Fortunately the matter was resolved and the generator was installed same day. It was ironic that while the financial meltdown was sweeping over the US, I was battling to purchase power in Nigeria.
According to the IMF, Nigeria’s power situation is hinged on four paradoxes namely; abundant energy but little power, high prices but even higher costs, widespread but ineffective reform and high expenditure yet inadequate financing. Power generation will remain a major issue in Nigerians development goals. The question is how soon will the government translate its grandiose plans into reality. Till it does so, most Nigerians will have to go through an ordeal similar to mine in trying to procure power.