2021: Leadership, Electricity and Petroleum Sectors

By Jerome-Mario Utomi

At a glance, President Muhammadu Buhari comment during his 2021 New Year message to Nigerians on Friday January 1, 2021, that; this administration would continue to focus on delivering key strategic priorities under our “SEA” – (Security, Economy and Anti-Corruption) Agenda, without any shadow of the doubt portrays his led Federal Government as a government that understands the experts believe by Sheikh Mohammed Bin Rashid Al Maktoum, that the efficiency of the government sector does not only affect the performance of the public sector-it affects that of the whole country, including the private sector.

When the public sector achievements picks up speed, the increased pace extends to the activities in all other sectors; incorporating new companies, implementing projects, and import and export, to name a few. Efficient resource management is essential to secure our future and economic sustainability; therefore, we must continually emphasize the importance of this principle.

Admittedly, the mission of any government should be to promote its peoples creativity. On the other hand, when you broaden this ambit of concern, the situation in Nigeria, points at a nation that is not practical and systematic in tackling the job of leadership or keen on results.

Out of many other concerns, supporting the above assertion is the recent media report credited to the Nigerian Electricity Regulatory Commission (NERC), stating that, electricity consumers in the country would, as part of the Multi Year Tariff Order (MYTO) recommendation for the sector, pay more for energy to reflect inflation trend and Foreign Exchange reality. Also ringing apprehension is NERC’s indications that the Federal Government would not subsidise any class of consumer by the end of this year as it plans to enforce 100 per cent remittance for all DisCos by the end of the year.

Aside from making the road to citizens’ recovery from the present precarious economic situation long and difficult, this present policy coming at a time when the dusts raised by previous thoughtless hikes in electricity tariffs and the Premium Motor Spirit (PMS) are yet to settle leaves big questions unanswered.

Take as an illustration: How can Nigerians be creative when they are afraid and frustrated by government policies? When bureaucracy is rampant, corruption is widespread? Where equal opportunity does not exist and most jobs and promotions are obtained through powerful people? And in a situation that leaves people with no hope for the present or the future?

To explain, this piece is not out to teach the Federal Government how to build a nation or revamp the economy but it is obvious to the author, and of course development professionals do not think that what the Federal Government is doing is the best way to solve the nation’s economic challenges.

Understandably also, there is some truth in the stand of some Nigerians that given the non-competitive nature of petroleum downstream sector, not just in Nigeria, but worldwide, it is a monopolistic sector, the need for the protection of consumers from exploitation calls for the emergence of a strong regulator. That means that such a regulator will be able to effectively do its work. Some of us are worried that regulatory effectiveness of critical sectors such as the petroleum and electricity sectors have been a suspect in the last few years.

Similarly, no one has succeeded in dispelling the avalanche of proof that the Federal Government’s continued dependence on crude oil to run its economy has become out of fashion and an ‘evil wind that blows no nation any good.

A while ago, AL Gore, former Vice President in the United States Of America, shared a similar concern about the danger of dependence on, and manipulative nature/tendencies of the global petroleum market. It reads; our current excessive dependence on oil endangers not only our national security and the earth’s environment, but also our economic security. Anyone who believes that the international market for oil is a “free market” is seriously deluded. It does have many characteristics of a free market, but it is also subject to periodic manipulation by the group of nations controlling the largest recoverable reserves (the Organisation of Petroleum Exporting Countries, or OPEC)—sometimes in concert with the small group of companies that dominate the global production, refining, and distribution network.

It is extremely important for us to be clear among ourselves that these episodic manipulations have not one objective, but two. First of all, these producing nations naturally seek to maximize profits. But more significant, they also seek to manipulate our political will. And for the last thirty years, they have paid careful attention to the need for price reductions every time the West comes close to recognizing the wisdom of developing adequate supplies of our own independent sources of renewable fuels.

We need to face the fact that our dangerous and unsustainable consumption of oil from a highly unstable part of the world is similar in its consequences to other forms of self-destructive behaviour. The longer it continues, the greater the harm and the more serious the risk.

There are ingrained lessons for Nigeria as a nation to draw from this argument.

Conversely, in my observation, most Nigeria’s leadership failures in this direction occur more because most government policies, decisions and strategies are overripe than because they are premature. For example, from 2015 to 2018, the federal government going by reports had spent ₦1.12 trillion as electricity subsidy. In 2015, the DISCOS were owed ₦165 billion by the FG in subsidy, while it climbed to ₦235 billion in 2016. PWC predicts the debt is expected to reach ₦522 billion at the end of 2019. Between 2015 and 2018, the total revenue spent by the Federal Government in subsidizing electricity stood at ₦1.12 trillion, while the subsidy spent on petroleum products within the same period was pegged at ₦1.2 trillion, data from the Nigerian National Petroleum Corporation, NNPC has shown.

Expectedly, some commentators looking at the figure may support the Federal Government’ full deregulations of power and petroleum sectors. But in taking that decision, these are few questions they failed to remember; within this period under review, why have the FG not revamped the nations refineries which was a major campaign promise? Or is the period not enough to carry out Turn Around Maintenance (TAM) of refineries in question? More particularly is the fact that, if there is anything that Nigerians wish that the FG should accomplish quickly, it is getting the refineries to function optimally as well as make the NNPC more accountable to the people. Why is the Federal Government almost always finding it convivial removing subsidies in commodities, goods and services beneficial to the poor masses?

While these questions are being digested, they are evident that leaders don’t need to continuously humiliate their citizens or frustrate business owners and stifle their creativity in the name of economic development.

In truth, it is documented that in the early sixties, South Korea was poorer than Egypt and facing military and economic pressures more than what we currently grapple with as a nation. These circumstances did not, however, deter that country from becoming a major industrial power. Similarly, Taiwan and many other countries managed to evolve from basic economies into industrial powerhouses within the span of a few decades, and against the backdrop of very difficult political and economic circumstances. It is no longer possibly correct, therefore, to use major national issues as an excuse for our leadership failures.

Utomi, is the Programme Cordinator (Media and Public Policy), Social and Economic Justice Advocacy (SEJA), Lagos.