High Chief (Barr.) Sunday Olurotimi Oduntan is a Solicitor of the Supreme Court of Nigeria.The Baamofin of Egbaland is the current Chief Executive Officer of ANED (Association of Nigerian Electricity Distributors) and the official Spokesman of all the 11 Electricity Distribution Companies in Nigeria. He was head hunted from the United Kingdom in 2013 to join the Nigeria's electricity sector. In this encoumter with, THE BUSINESS PACKAGE, he spoke extensively about the Nigeria power sector; why investors are slow in investing in the nation’s power sector, the problem of grid collapse,the reform embarked upon by the President Tinubu- led administration and Sundry issues. Excerpts.
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Q: Why investors are slow in investing in the electricity sector after the signing of Electricity Act, 2023?
A: The signing into law of the Electricity Act 2023 has empowered government at all levels to get involved in the generation, transmission and distribution of electricity. As a result of this, states have started enacting their own laws that will be specific and peculiar to their states and hopefully begin to search for investors. But, let me quickly talk about investors. For you to have investors in any country, enabling environment must be created.For instance,this is the power sector. If you want investors to come into the power sector for instance, that investor must have an assurance of a number of things. One is respect for the sanctity of contract. This means that once I sign the contract with your government,the contract must be obeyed and respected. Not, that they will continue to breach that agreement.Then, security must be provided; that's part of enabling environment. If an investor does not feel secured, he won't come.Number two issue is corruption. You must fight corruption to the ground. An investor that is trying to pay tax and they are asking him to bring bribe, an investor that is trying to do his job, and you are harassing him through multiple taxes. For instance, state would go and zeal up the place and local government will also do their own. All those multiple taxation is a sign of an unserious nation.So, for me, there must be return on investments. That is to say, if I put an amount of money on this business, would I be able to recover my cost? Cost recovery, that's another name for it. The purpose of doing any business is cost recovery. So, no investors will come, unless he would be able to recover his money. How do they recover their cost? They can recover their cost, if the product is sold at the appropriate price. The product has to be sold at a cost that will reflect the cost of production. But, in the case where you have illegal connections, how can they recover their money? Illegal connection of electricity is the most rampant, fraudulent activities in Nigeria; the rich people do it; the poor do it and you want an investor to come. So, the problem is with we Nigerians. In Nigeria, we love to blame our leaders for everything. Those types of utterances are smacks of ignorance. For instance, the FCT Minister was trying to evacuate beggers from the streets of Abuja and people are abusing him.These are people that are whole. Come to think of it, is it a charitable act to beg on the street especially when you are hale and hearty. What type of people are we? Look, the truth is that, no investor will come into any environment where he is not sure he can recover his cost. So, when an Act is signed into law, that is just the beginning of the process. The next is to implement the law.
Q: The Siemens Project.
A: Something has happened. This current government and the previous one has attracted a lot of investments into the sector. Right now for instance, we have what we call the Siemens project that is going on. Siemens is an equipment manufacturing company from Germany. They started from the Buhari's time and President Tinubu continued it. People are abusing President Buhari for instance, but they will not talk about the good things that happened under his administration. They have brought in a lot of equipments that has enhanced power supply. Of course, this has led to improvement in electricity in different parts of the country. So electricity has improved. I came from England to join the powe sector from the day they privatised the sector, so I can tell anybody the history of the power sector or the privatisation and its imperatives.
Q: How Nigeria was able to attract investors into the telecommunication sector?
A: Oh ! Oh! . Telecom is a different thing from power. Telecom is a technology that works with the air. We're it in not for the technology, If they were using landlines, they would have gone bankrupt.
Q: How to curb electricity theft in Nigeria?
A: What I will say to that is that, the staff or electricity workers must be well remunerated. If you don't pay somebody well, how do you want him to work like a jackal. The bottom line is that, people must be happy doing that job. So, what I'm saying is that these workers, they have a part to play. So, talking about the workers; pay them well, give them the tool to do their job. They must also be properly trained. And, when you motivate them, create an avenue to sack them seamlessly and let them be fully aware of this. So, the rule is: apply reward, apply punishment. So, the workers have a part to play,but it is not just them. Everytime people bypass or there was a problem, people will always attribute it to the staffers. For instance, we have 26,000 Disco staff all over the county and out of these 26,000 staffers, the bad ones are not up to 6,000. We can not rule that out. That is inevitable.The end- users have a bigger part to play. If a staff for instance is accused of taking bribe,he can not take that bribe unless,he is offered. But, if they offer and he didn't accept, bribery won't take place. So, it takes two to tangle. The fact is that Nigerians love corruption. Nobody ask questions about how people come about their money in this country, not even at places of worship.
Q; States that have shown commitment to implement the Electricity , 2023.
A: Yes, so far about twelve states have shown commitment. We have states like, Enugu, Lagos,Ekiti, Kogi, Oyo, Edo and so on. Enugu is the first state to complete the enactment of their law. They have set up their own regulatory authority. So, they can regulate power in partnership with the DISCOS. So, as long as people are ready to pay for power and they desist from stealing energy, the improvement in the power sector will conrinue.
Q: With power sector improvement, is the economy going to be on the path of recovery?
A: Anywhere there is electricity, industry will thrive. Also, there will be employment generation. Let me tell you,more than half of those who ride okada today are artisans in their own rights. So, once there is electricity, there will be more economic activities.
Q: On President Tinubu's Economic Reform
The current reforms embarked upon by President Tinubu is the best since independence. You can see that President Tinubu is trying to push a tax reform. Then, what do you see? Our people are saying, " We no go gree o," . It is dead o arrival. Whereas,that tax reform will eliminate multiple taxation; that tax reform will ensure that whatever you don't eat, nobody will bring it to your doorstep. And, if you don't eat moinmoin and I am selling moinmoin and there is a tax return on moinmoin, you that is not eating moinmoin, you have no right to collect tax on moinmoin. So, if you are HISBAH in Kano and you like destroying beer; you don't want to see beer. That is your faith and it is respected. But, do not come near states like Rivers or Lagos who are trying to share proceeds from the sales of beer. So, if you don't want or like beer, you should not share money from the proceed of beer. The problem with Nigeria is that we play politics with everything. If somebody didn't like your face, no matter what you are trying to do, it is not good and if somebody likes you, even if you are stealing the whole country, they will say you are the best. Now, the situation today did not start today. The problem started a long time ago. Look at electricity, between 1989 and 1999, we had no less than four leaders that have governed the country. So, during this period, population were growing and they allocated money for the power sector, but they did not build a single power plant. But,when Chief Olusegun Obasanjo came in 1999, he started the power sector reform in 2002 and he started building power plants and tried getting equipments that were stranded at the ports. What I'm saying in essence is that the power sector reform stated during the era of Chief Olusegun Obasanjo. But, despite the reforms, the power sector was marred by corruption which made the Jonathan administration to sell off the power plants. So, talking about Tinubu’s administration and its reforms, what we are saying in essence e is that he inherited an administration where his predecessors have put the nation into huge debts. By the time the previous administration was winding down, they were already borrowing to pay salary. So, this guy came and said that the only way to save the economy is to begin to remove subsidy earlier being enjoyed by Nigerians. From what we gathered, subsidy itself was a fraud. So, he removed subsidy in the Petroleum sector. Now, to the electricity sector, he js doing the same thing. Today, when you ear Band A. Band A simply means, the person using it is paying the total cost of electricity consumed and nobody is subsidising him. But, whoever is in Band B,C,D,E, government is paying 67 per cent of your tarrif.So if you are on Band B,C,D, E, you are not paying up to half of what you are suppoosed to be paying as cost of electricity. But, if you are in Band A, you are paying the true cost. So, President Tinubu has embarked on a reform that will bring short term pains and hardships, but long term benefits. I do not speak for the government, I am not a politician. For instance, an area where they have not done well is that they have not reduced the cost of governance and the only people that are making that impossible are the National Assembly who are sometimes involved in Budget padding. So, what the administration met was terrible and to now adjust things, they have to impose tax. What the administration is doing with the new tax law is to bring more people into the the tax dragnet. So the new tax law will ensure that people pay taxes commensurate with their income. That is what is being done in Lagos state, that made Lagos to be viable financially than any other states in the country and Nigeria needs such system to be able to function well.So, the reform is a painful exercise, but it would pay off in the long run. For instance, for the first time Nigeria has been able to save more money and for the first time Nigeria's Federating units are collecting more allocations.
Q: On importation of goods..
A: We are importing fuel for instance because our infrastructure are old and we are not building new ones. It is not about the petroleum sector alone, even in the power sector , 80 per cent of the equipment we use in the power sector are imported. Nigeria is not producing any component. Even, meters are not produced 100 per cent in the country. Unless and until Nigeria realises the need for cost recovery, we may never have electricity in the country. Nigeria also need to invest in alternative energy to complement the electricity we are generating.
Q: On incessant grid collapse.
The grid is epileptic because the equipment is very old and people there are so corrupt. The grid is owned 100 per cent by the government. There was a grid collapse that was cause by the collapse of a transformer in Jebba. That transformer was 47 year old. Part of the problem is also as a result of vandalism by bandits. Those bandits didn't come from heaven, they live among us. For me, President is an unlucky man that has come to govern the nation at a delicate period, but he would go down in history as the man who came to transform the nation. Let me say it once again, the reform is painful, but by the time they are done with us, Nigeria will be better for it.
End.
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