Why Nigeria Can’t Diversify Her Economy

Nigerian Economy

The Buhari administration’s early pronouncement during its first tenure had made many to suppose diversification of the Nigeria economy to be one of the principal leitmotifs of the government. But this was not to be as all voices were drowned in rhetoric rather than economy action.

However, Nigeria being a mono-economic nation as the export of oil and gas provides over 90% of vital income to finance the budget, the leaders have been jolted from sleep by the recent Heavy slump in oil prices to renew their mantra on diversification of the economy. For it is an established fact that unless the organized private sector is galvanized into working, any dream of creating jobs for Nigeria’s growing and restive youths remains a mirage.

A vital component of the Organized private sector is the Small and Medium-Scale Enterprises SME’s and in Nigeria, the activities of the SME’s cut across several Sectors of the economy which includes Manufacturing, Agriculture, Solid Mineral, Metal Fabrication, ICT, Culture and Tourism, Transportation, Trade and Commerce etc. Official estimates posit that the SME’s constitute about 80% (eighty percent) of all business enterprises in Nigeria and could be the engine of the economy growth and driver of sustainable industrial development and global competitiveness when galvanized. But SME’s in Nigeria are crippled by very serious challenges that despite their employment potentials, allows them to contribute only about 10% (ten percent) GDP and 4% (four percent) to export earnings over the past ten years. These crushing and crippling challenges include poor and inadequate infrastructure particularly, epileptic power supply. Others include poor transport facilities, non-access to medium and long term credit faculties, poor financial intermediation, harsh crushing business operating environment; dumping of cheap imported goods, weak sectoral linkages to mention but few.

Perhaps in line with her transformation agenda, the Jonathan administration hastily privatized the power sector and without looking, leaped in bed with strange bed fellows. Whereas, privatization was designed to bring in players with technical and financial capacity to reverse decades of under-investment in the sector, this was subverted by the rigged sale process adopted by the Jonathan administration that discouraged global investors and left the power assets in the hands of untested local adventurers. The result has been a return to the years of locust that Nigerians would even want a return to NEPA/PHCN instead of what we have now as the nation today has gone from, epileptic power supply to complete darkness, steady closure of companies and increasing youth employment.

What many Nigerians could not understand is why it must be some of the companies blacklisted by the Ndudi Elemelu led House of Representative Committee set up to probe the power sector during Alhj. Yar-Adua administration for sabotage were the ones handed over our power assets. The thirteen companies which handled NIPP projects across the country can be recalled to include: News Engineering; Renacs Engineering, Murabeni (WA) and Murabeni International; Rockson Engineering / Rockson International; Catlark International; Chrome Consortium Energy; Hoquado Nigeria Ltd, Pivot Engineering; Lahmeyer International; Ellens Konsult; SEPCO and CMEC Company for supply of refurbished machinery and equipment.

Further, it will be recalled that the commission recommended for cancellation of NIPP contracts in Owerri, Yenegoa, Calabar; Maiduguri, Umuahia, Damaturu, Arochukwu and Ado Ekiti, handled by such companies like Chrome Consortium; ABB powerline; Saton Energy; Atlantic Engineering; Siemens; Harlesdem Engineering ; Mogabs Ltd and Union Allied Engineering Works were asked to refund all the money paid to them so far for non-performance. When the stance of the committee was leaked to the group, the contractors moved to work against the outcome of the committee report and raised alarm of what they termed hidden agenda. Other measures they took to work against the committee was not made known to the public but soon enough the centre could no longer hold for members of the committee who suddenly became embittered against one another and the schisms sewn in them derailed even the presentation of the report to the house.

The Jonathan administration could not have been ignorant of the very weighty allegations made against these companies before jumping into bed in various ways in its hasty privatization of the sector. Government should have carried out further investigation on these companies before embarking on further transactions with them to avoid what we have today that instead of progress in the power sector, Nigeria has been thrown 50 years backwards.

Some of these companies may be innocent but we are not ignorant of the fact that many times in this country, fictitious companies are floated to stand at the corridors of power to grab plumb jobs and contracts that are never done while the money for the contracts or jobs are siphoned. These phoney companies abound in Nigeria, many are in the West, East and Northern parts of this nation. In the South East, these phoney companies even sponsor governorship elections and succeed in sharing state allocations with them; those who refused like Senator Chris Ngige are kidnapped to show their power.

The Mambilla Hydro-power project has become a scandal for years. No one has been questioned on the Mambilla scam by our Legislators. Instead of making noise about banning of importation of generators, the only means of electric light in Nigeria, our lawmakers should rather make laws that could make power projects abandonment criminal.

During the Babangida government, a prominent son of South East used such phoney companies to get a plumb contract of providing pipe-borne water to twenty communities in old Anambra State from the Babangida government. He went to England and brought a brick-layer and installed him at Hotel Presidential Enugu and told our people he was a water engineer. The people of the South Eat were cooking and our women were dancing themselves frenzy for an English brick-layer while Arthur Eze siphoned the money for the water project to build for himself five star hotels in various cities of Europe even as he established Triax Airline here in Nigeria. But because he had no knowledge of Air-transport, his Airline fell like a pack of cards. When Abacha unseated Chief Shonekon whom Babangida had handed over power to step aside. Arthur Eze flew away to France in fear that Abacha may decide to arrest him, but after realizing that Abacha was even more decadent than himself, he returned home to Nigeria and took up the name of “Ozoigbondu”.

Has those twenty communities in old Anambra State gotten their pipe-borne water? Your guess is as good as mine.

One may also not stop to wonder how many Nigerians are employed in his fine hotels abroad.

Now one of his men, Chrome Consortium Energy or Enugu Electricity Distribution Company EEDC has taken over the South East Disco and things have fallen apart in electric power distribution in the South East, as no one gets beyond 48 hours of electricity from the national grid in a month. If you get two hours of electric light in the morning, that is all you get for the whole day, and if they break off for five days to a week because of rain, when they come back they may decide to leave the light for you for five hours, they will break off again return to their usual tempo of one to two hours of light to the cities which they have divided into zones for easy load-shedding as they call it.

EEDC always keeps an expatriate with them to maintain the facede in Arthur Eze style, today it is an American, tomorrow a Chinese now it is an Indian. Whether these expatriates’ have any knowledge of rural electrification is a matter of conjecture. The few Engineers EEDC inherited from NEPA/PHCN have been replaced with kits and kinsmen of the owner of EEDC (Chrome Consortium Energy) Sir Emeka Offor. Who better to hide your flank than your flesh and blood. “They usually bring in a new hand to understudy from what you are doing and once the new staff informs them he/she has mastered your work, you are summarily sacked on any flimsy excuse and replaced with the new hand lamented a recently sacked staff”. Thus Engineering is now learned by rote at the South East Disco. “If you have the misfortune of getting your electric pole knocked down by storm, then you will not receive electric light tor the next one to two weeks, for that is what it will take the new people at EEDC to replace your pole. Those new boys at the EEDC want to eat but they don’t want to work”, lamented recently, by a TCN staff who spoke on condition of anonymity to this reporter.

He further told me that at a recent meeting they held at Owerri, the Imo State capital with the Discos of South South and South East to ascertain what really is the reason why electric power distribution in the region has gone from bad to worse, that a senior official of EEDC Mr. Sunday Ekekwe told them that an average Aba man can only pay Two thousand Naira (N2000) for electricity in a month. When I mentioned this to a friend at Aba, our Aba office became besieged with paid EEDC electric bills by Aba residents, all ranging from Ten thousand to Twenty five thousand for residential flats and Sixty to One hundred thousand or more for Hotels and hospitals a month in Aba, all estimated billing, for EEDC have refused to give pre-paid electric meters to residents of the commercial cities of the South East (their Cash Cow). Few remaining functional companies, as many have folded up due to crippling epileptic power supply, are paying millions of Naire to offset EEDC estimated billing and maintenance of their gen-sets to stay afloat

Despite assurances made to this Reporter by EEDC spokesman Mr. Emeka Eze in 2017 when we paid EEDC a visit in Enugu, on their readiness to distribute pre-paid meters free of charge to consumers, the prepaid meters are today sold at N30,000 (Thirty thousand Naira per one when available.

On arrival at TCN, Aba depot recently on a fact-finding-mission, I was informed that their leaders have gone out to inspect one of their installations where Fulani herdsmen have been sighted to make sure their pillars have sustained no damages; and because of the bad roads through which I had come, I decided to wait instead of returning again the next day. This made me wait a while at TCN, then I noticed that all the time I was there, their air-condition was at full blast. They had steady light while in the town from where I had come, there was no electric light. When I mentioned this to a senior staff of TCN when they returned, he explained that, that is the crux of the matter, and pointed me towards a 33 KVA circuit breaker EEDC have constructed to throw off electric light being supplied to them by TCN. He then took me round their very impressive installations, the humming series of 500 MVA transformers that have capacity to supply power to Aba 24 hours – two times over. Speaking further on condition of anonymity, he proclaimed that EEDC is overwhelmed by what needs to be done to distribute electric power to the people of the South East, and made it categorically clear that government has to throw the door open for four more players into the sector. “Competent players like Geometrics power plant Aba and others must be allowed to come in and help address electric power needs of the people of the region to fast track our economic growth and progress” he said. While he spoke, my mind wondered on what actually the Federal Government was subsidizing. Granted that government has to assist companies engaged in provision of public utilities to cushion its cost on the people but there must have to be things on ground that government will come in to assist, but in the case of these Discos; what have they put on ground? Couldn’t the former power minister Babatunde Fashola in the tomes of books he reads at the back of his chauffeur driven SUV cars and the Vice President, Yemi Osibanjo, Chairman of the Privatization Committee who likes to give out books as Christmas gifts to his visitors, have known that you do not just marry a woman because you knock them up, there are other things that cement marriage to have advised government upon putting money into bottomless pockets in the name of subsidy.

Today the Discos have repositioned themselves towards continuation of the subsidy instead of working to distribute electric power supplied to them.

Before capping this report, I took a trip to Geometric Independent Power Plant, Aba (Aba IPP) to report to the world what Nigeria has left behind to go abroad cap in hand to borrow money to pay subsidy into pockets that will never get filled.

The Geometric Independent Power Plant, Aba is a 14l MW gas-fired power plant with over 100 km brand new industry-centered distribution line built to ensure delivery of reliable, affordable power supply to several industries and large commercial entities and geared towards full expansion, had the project which had been fully completed had been commissioned by the government as scheduled in 2014. The project has an embedded electricity facility designed to generate and distribute its own electricity. The project has a dedicated 27km gas pipeline constructed to ensure reliable transportation of gas fuel to the power plant from shell’s gas gathering centre also in Abia State. The Projects Distribution Company APLE has been licensed by NERC to distribute electricity to regulated customers within Aba metropolis. APLE’s mission is reported to be building an efficient network to distribute in Nigeria in line with the Electric Power Sector Reform Act. APLE is National Rural Electric Cooperative Association (NRECA) USA and NRECA is an experienced organization that could have helped grow our indigenous talents, but today, all that lays overgrown with weeds due to the ambient religious, ethnic and political mediocrity that have stymied and retarded our nation’s growth and progress.

The South East Governors, in their periodic meetings/forum must realize that without viable electricity that our region’s development is doomed, and drum it into the ears of Mr. President at any opportunity, to make Geometric Power Plant, Aba functional. Nobody will take us serious so long as we leave such heavy investment to rot and decay. Our continued love affair with Sir/Emeka Offor who does not know left or right about electricity will get us nowhere. It is a pity that constantly in Nigeria we somehow seem to be living out a script to validate Lord Lugard’s contemptuous remark that “the Blackman seems unable to see beyond now and takes a long term view of his self interest”.

How come it is so difficult to realize that our troubles come from an enemy so close by such that if we walked to the mirror we would see him stirring at us? Yet, the image in the mirror, of us thinking so short term, like Dracula manages not to appear”.

The President, Gen. Muhamadu Buhari has in his democracy day broadcast said among other things that viable electric power remains a focus of his government’s economic diversification agenda.

He can still start by undertaken a holistic programme of reform of the entire power sector, the power sector needs deregulation to enable different levels of operators to generate and provide power to Nigerians to help diversify and grow the economy or he can continue his resource wasting programme of subsidy and waste his tenure like Caesar Nero who in AD 100 sat on his balcony drinking wine and watched Rome burned to ashes only to come round and blame it on the early Christians.

Nworah Clem

In Umuahia

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