General incompetence

General incompetence

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In 2018, President Abdel Fatah al-Sisi of Egypt arrived in the country’s New Administrative Capital to inaugurate three giant power plants built by the German company, Siemens, with a total capacity of 14,400 megawatts.

Built at a cost of 6 billion euros, or $7.2 billion, the project was completed in only 27.5 months or a little over 2 years and increased Egypt’s power generation potentials by more than 40 percent.

A similar project in Nigeria projected to cost $5.8 billion, with the potential to increase the country’s generation capacity by up to 40 percent is the Mambilla power project in Taraba State, which the Federal Government began in 1982 and remains uncompleted in 2019.

More than eight Nigerian presidents have come and gone, since the mega power project billed to generate up to 3,000 megawatts of electricity was conceptualised.

President Muhammadu Buhari was the only president among them to get two attempts to complete the project – first in 1983 as General Muhammadu Buhari and again in 2015 as a civilian President, yet it remains largely on the drawing board.

Across the country power projects remain non-operational for flimsy reasons.
Gas fired plants are built without gas pipelines to connect them to a power source, the National Independent Power Plants (NIPP) with combined 4,774 mw in capacity, long scheduled to be privatised remain in limbo.

Moving on to subsidies, Egypt recently raised the price of electricity by an average of 26 percent as part of reforms designed to overhaul the country’s economy.

In Nigeria the electricity sector is now probably bankrupt with Distribution Companies (DisCos) unable to fully pay for power they buy from Generation Companies (GenCos), due to non-cost reflective tariffs, and unwillingness of Government to raise electricity prices.

Today, the electricity sector privatised in 2013, still suffers daily blackouts as DisCos and GenCos continue to underinvest in capex, because tariffs failed to keep up with rising inflation and so called circular debt (consumers owing discos and DisCos owing GenCos, and so on) undermines the whole system.

In 2011, Iran ended decades of fuel subsidies with plans to achieve $20 billion in savings in the first year of the subsidy cuts and spend 80 percent of that money on cash grants to the poorest Iranians.

In 2015, the United Arab Emirates, the third-biggest OPEC producer, began linking gasoline and diesel prices to global oil markets in a bid to end energy subsidies.

Indonesia, another large energy producer and consumer, has also made progress in getting rid of electricity and fuel subsidies.

Nigeria for its part remains stuck on petrol subsidies.

The Federal Government probably short-changed everyone and the economy to the tune of N623 billion ($1.7 billion) in subsidising petrol last year, a dubious expense line it clearly cannot afford.

Phasing out implicit fuel subsidies while strengthening social safety nets to mitigate the impact on the most vulnerable would help reduce poverty and free up additional funding for health and education.

Nigeria fixes the price of gasoline at N145 per litre ($0.40, or $1.51 a gallon), among the 10 cheapest levels worldwide, according to GlobalPetrolPrices.com.

The subsidy expenditure is happening amid a bourgeoning debt pile and barely growing economy, recipes for a currency/ fiscal crises.

The mess in Apapa, Nigeria’s major seaport is another testament to the sheer inability to get things done by Government.

Nigeria loses $19 billion annually, or about 5 percent of gross domestic product (GDP), from the delays, traffic jams, illegal charges and insecurity that are increasingly prevalent at its ports, the Lagos Chamber of Commerce & Industry (LCCI) said in a 2018 report.

A 2018 World Bank Trading across Borders survey, which measures the time and expense involved with importing and exporting goods, ranked Nigeria 182nd out of 190 countries, below war torn Syria and Afghanistan.

In Health and Education rankings the country continues to be near the bottom of the pile.
Nigeria ranks 157 out of 189 countries in the UN Human Development Index, which measures indicators such as health and inequality.

Life expectancy is still a mere 54 years.

The UN estimates that about 80 percent of people who earn an income in Nigeria are active in the informal sector or have “vulnerable employment,” work that lacks social security or guarantees any kind of rights.

The economic and social crises is leading to a surge in crime such as kidnappings and banditry in the North West.

Amid all these the major concern of political leaders seems to be those who will emerge as the principal officers in the next National Assembly, meanwhile President Muhammadu Buhari not to be left out, jetted out to the United Kingdom on April 25 for what the presidency described as a “private visit”, without notifying the National Assembly of his planned absence or officially handing over to Vice President Yemi Osinbajo.

Back to Egypt, during the 2018 commissioning of the 14,400 mw power plant, Siemens AG president and chief executive officer (CEO) described President Abdel Fattah El Sisi as the best negotiator he had ever met, thanking the Egyptian president for his constant support.

He pointed out that the inauguration of the plant was the culmination of the hard work of 24,000 people for the same purpose and for the same achievement.

In contrast all over Nigeria what one sees on a daily basis is General Incompetence by leadership, across all sectors.

 

Patrick Atuanya



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