Wednesday, May 27, 2015

Dealing with Nigeria’s perennial energy crisis


Nigeria’s economy was declared as the biggest in Africa in 2014. However, the vulnerability of the economy nay the country has been exposed by the perennial energy crises the country has had to contend with. By energy crisis I mean the challenges being faced by the citizenry in getting affordable and steady supply of petroleum products and electricity. Barely two weeks of strikes by oil marketers and unions the country’s economy has suddenly become comatose. As at Monday, May 25, 2015, petroleum products had become so scarce and prices astronomic to the extent that many public and private businesses either commenced skeletal operations or shut down completely.

Banks began to close by 1pm instead of 4pm. Some electronic media outfits drastically reduced their broadcast time from 24 hours to barely 8 hours per day. Telecommunication companies informed customers of their intention to embark on degraded services while many flights were cancelled by airline operators. Even the security sector is not left out as there were reports that Nigerian police had to drastically reduce its motorised patrols. Even many schools from primary to tertiary could not function optimally as exemplified by the University of Ibadan having to proceed on two weeks semester break due to shortage of light and water on the institution’s campus.

Thankfully the Senate was on Monday, May 25 able to secure some temporary relief for the country at a multi-stakeholder meeting with striking players in the oil and gas sector and the government. The unions promised to resume fuel lifting within six hours. The question is:  How long will this truce last? To the best of my knowledge, the contentious issue of the disputed subsidy claim has been largely unresolved but the striking workers may just have agreed to go back to work in order to allow for smooth transition of power at the federal and state level scheduled to take place  on May 29. I have proffered a number of solutions to the challenges in the petroleum sector in my column of last week titled “Resolving the petrol scarcity conundrum”. In that piece, I support the full deregulation of the downstream sector of the petroleum industry; called for the turnaround maintenance of our four ailing refineries or their outright sales; and the prosecution of those involved in fuel subsidy scams.

In addition to these, I am calling for the passage of the petroleum industry bill and its assent by the outgoing president. Am equally demanding the end to oil theft. An estimated 60,000 to 100,000 barrels of crude oil per day is estimated to being lost daily to those involved in illegal bunkering of oil and gas. Am not unaware of the setting up of joint military task force comprising the Navy, the Army as well as members of the Nigerian Civil Defence Corps on one hand and the multi-million oil pipeline protection contracts given to some arrowheads of Niger Delta militancy. However, if truth must be told, these measures have been largely unsuccessful as the oil theft has continued on an industrial scale hitherto. The incoming administration of Muhammadu Buhari will need to demonstrate the political will to rid the country of these economic saboteurs.

The counterpart challenge of the energy crises is that of epileptic electricity. It is very disheartening that 55 years after independence, Nigeria is still groping in darkness both literally and metaphorically. Imagine, with all the much touted power sector reforms  which led  to the establishment of the Nigerian Electricity Regulatory Commission whose mission is  to “Promote and ensure an investor-friendly industry and efficient market structure to meet the needs of Nigeria for safe, adequate, reliable and affordable electricity”; The balkanisation of the omnibus Power Holding Company of Nigeria into generation companies, transmission company of Nigeria and Distribution companies as well as the establishment of  Nigerian National Integrated Power Projects which comprise of  11 independent power plants and 4 Federal Government  Power Stations located in Alaoji, Omotosho, Olorunsogo and Geregu and the billions of dollars spent on subsidy and bailouts in the sector, the country has little or no success story to share.

The sing song has been that there is no gas to power the electricity turbines. There were frequent allegations that gas pipelines are being routinely vandalised. Even there have been several reported cases of theft of electricity cables by some scoundrels. Not only that, some DISCOs also allege energy theft by electricity consumers who engage in illegal connections and non-payment of electricity tariffs.  There was also the challenge of frequent system collapse such as was reported last Sunday at the Shiroro Hydro-electric Power Plant in Niger State.

Before the system collapse at Shiroro, just 48 hours earlier, precisely on Friday, May 23,  the Permanent Secretary, Federal Ministry of Power, Ambassador Godknows Igali, had said power generation nationwide had dropped from about 4,800MW to 1,327MW, leading to the massive load shedding across the country. As a result of the ugly development, the power allocation to the Abuja Electricity Distribution Company was reduced from about 450MW to 15MW. Surprisingly, even with the worsening electricity supply, the DISCOs are still in the habit of sending estimate bill otherwise known as crazy bills to customers because the company marketers want to meet their financial targets. Ordinarily, every house supposed to be metered but only a few percentage of the electricity consumers have been issued with pre-paid meters.

The real issues are: shall we continue with the lamentations about sabotage, incompetence, inadequate funding, thefts and so on? Is electricity generation, transmission and distribution a rocket science and esoteric? How come we have not been able to diversify our electricity generation beyond hydro and thermal? What about the solar, wind, and coal as alternative sources? For me, we cannot continually run Nigeria’s economy on contraption called electricity generators and think we will solve the problem of unemployment and poverty. The cost of doing business in Nigeria will only significantly reduce when individuals and private owned companies ceases to generate light and water for their businesses. Let’s think of how many lives have been lost to carbon monoxide emissions from power generators; let’s spare a thought for the environmental degradation caused by the toxic emissions from the generations; the air and noise pollutions and the ozone layer depletion leading to climate change all traceable to the pollutants from the electricity generators.

I really do not envy incoming administration of General Muhammadu Buhari (Retd.) Uneasy, they say, lies the head that wears the crown.  If only the All Progressives Congress  government can help solve the country’s energy problems, then it would have given the country something to cheer and indeed live up to its change mantra.

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Wednesday, May 20, 2015

Resolving the petrol scarcity conundrum

For some time now, especially since the beginning of 2015, Premium Motor Spirit popularly known as petrol has been very scarce in Abuja and many other cities across the country. I live and work in Abuja and can count the number of times I have got fuel at the official rate of N87 per litre since the year began. Of course, for those who do not attach much value to time, they do not mind queuing for hours on end at the few filling stations that are selling at the official rate. For some of us, we have embraced buying at the black market even if we have to pay twice or thrice the official price.
I have tried to conduct a preliminary study as to the root causes of the perennial scarcity of petrol in Nigeria. What I found out is mind-boggling. The problem came to being largely as a result of the non-maintenance of our oil refineries. Nigeria currently has five of them. Two in Port Harcourt; the old refinery inaugurated in 1965 with the current nameplate capacity of 60,000 barrels per stream day and the new refinery inaugurated in 1989 with an installed capacity of 150,000 bpsd. This brings the combined crude processing capacity of the Port Harcourt Refineries to 210,000 bpsd.
There is also the Niger Delta Petroleum Resources, a 1,000bpd topping plant located at Ogbelle, Rivers State, which was established to produce diesel. The other two refineries are in Warri and Kaduna. The Warri Refinery was established in 1978 to refine 100,000 bpsd and was expanded in 1987 to 125,000 bpsd. The Kaduna Refinery was commissioned in 1983 with a nameplate capacity for 110,000 bpsd. These refineries produce varieties of products including Liquefied Petroleum Gas, Premium Motor Spirit, Kerosene (aviation and domestic), Automotive Gas Oil, Low Pour Fuel Oil and High Pour Fuel Oil, among others.
According to the National Public Relations Officer of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Comrade Emmanuel Ojugbana, “The refineries have on many occasions suffered from irregular Turn Around Maintenance. While TAM is required once in every 18 months, the refineries have been without TAM for almost two decades and this has caused serious problem for their operations.”
Invariably, lack of maintenance culture on our refineries and petro-chemical companies led to fuel imports. Fuel imports led to the introduction of fuel subsidy which was meant to be a stop gap or temporary measure pending the time our refineries could operate at full capacity and when privately licensed companies would have completed the construction of their own refineries. Alas, the Dr. Kalu Idika Kalu-led National Refineries Special Task Force while presenting its report to President Goodluck Jonathan in November 2012 observed that 28 out of the 35 investors given licences by the Federal Government to establish refineries in the country lacked the capacity to do so. The Idika committee reported that to ensure self-sufficiency in petroleum products’ production, the country needed three more refineries that should be established either by the government or private investors. The refineries, the committee suggested, should be established in Lagos, Bayelsa and Kogi states.
Information gleaned from the website of the Department for Petroleum Resources showed that out of the six private refineries which would have added a cumulative 657,000 bpsd to the local refining capacity, only the Niger Delta Petroleum Resources, a 1,000bpd topping plant located at Ogbelle, Rivers State, is operational. What this means is that for some time to come, Nigeria will continue to import refined petroleum products.
The challenge successive governments have been facing is whether to subsidise the cost of the imported petrol or leave the price to be determined by the vagaries of demand and supply. In plain terms, the crux of the matter is whether government should deregulate the petroleum industry, particularly the downstream sector. Over the years, I have held the view that deregulation is not pro-poor and that subsidy is needed to cushion the harsh effect of the partial deregulation of the Nigeria’s oil and gas sector.
But recent developments have shown that full deregulation might be the only way out of the fuel scarcity quagmire. As things stand, the fuel subsidy scheme is riddled with a lot of scams as importers of petroleum products have been found to engage in all manner of sharp practices. Even as it is, government is finding it difficult to pay genuine claims.   In a May 14, 2015 report by this newspaper, it was observed that the lingering fuel scarcity was occasioned by the delay in the payment of the subsidy claims. According to the records made available by the marketers, they had received subsidy of N98bn in Sovereign Debt Notes, interest of N56bn for delayed payment and N37bn as foreign exchange differentials, bringing the total payment in 2015 to N191bn since the beginning of the year.
Their records also show that the outstanding balance expected from government as of March 31, 2015 is N200bn. But while the marketers put the outstanding claims at this amount, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, said the outstanding figure was N131bn. In the recently passed 2015 budget, only N100bn was budgeted for petrol subsidy and N45bn for kerosene subsidy. This is far less than what the outgoing government currently owes the petroleum importers.
The report establishes that “When subsidy payment is delayed, huge interest accumulates on funds borrowed by the marketers to fund importation of products in addition to huge exchange rate differentials arising from the difference in exchange rate when the cargoes are imported and the time the subsidy claims are paid.”
I couldn’t agree more with the opinion expressed by the President, Nigeria Association for Energy Economics, Prof. Adeola Adenikinju, that there is the need for the Federal Government to discontinue subsidies on petrol consumption and look into subsidising production of petrol and other petroleum products locally. The scholar opined that it was more economically viable for government to encourage businesses that want to invest in local refining of crude oil and that it was very pressing that the country phased out subsidy because of its huge negative impacts on the country’s foreign reserves, exchange rate, inflation and the budget.
Given the expert’s opinion that subsidy payment encourages fraud, fuels waste of scarce resources and causes frequent scarcity of products due to government’s inability to fulfil its own part of the obligations, shouldn’t every right-thinking Nigerian support the full deregulation of the oil sector? Truth be told, the sector is at present unofficially deregulated. As I travelled from Abuja to Bogoro, Bauchi State over the weekend, I noticed that at the six different filling stations we fuelled our vehicle along the way, we bought fuel at different prices ranging from N120 per litre to N135 per litre. In all of these filling stations, there were no queues as consumers there had adjusted to the realities of buying above the official rates. My support for the full official deregulation of the oil and gas sector does not in any way preclude the trial of those who have defrauded the country through various scams in the sector. It does not mean that government should not pursue the turnaround maintenance of the existing refineries or their outright privatisation, if necessary. I am for whatever measures that will make this great country to cease importing refined petroleum products. Enough is enough!

Wednesday, May 13, 2015

Musings on Shema’s governance style

A politician in government has a choice between doing what is right and doing what is popular
– Ibrahim Shehu Shema, outgoing Governor of Katsina State, May 9, 2015.
 
I thoroughly enjoyed the live interview held last Saturday on Channels Television by Ms Modele Sarafa Yusuf and three others with the outgoing Governor of Katsina State, Ibrahim Shehu Shema. It was a commemorative interview to honour the governor who won the maiden The Sun Outstanding Performance Exit Award. The award was instituted by The Sun publishing company to promote commitment to quality governance. It is exclusively for a governor who is finishing two terms in office, and has been widely adjudged to have made sterling impacts on the lives of his people across various sectors.
Katsina State, for those who did not know, was carved out of Kaduna State in 1987 and can be safely regarded as a power state given the political heavyweights who hail from the state. The state is home to the President elect, Muhammadu Buhari, who was a former Head of State from December 31, 1983 to August 27, 1985. It was also the birthplace of the late President Umaru Yar’Adua. Other eminent persons from the state include Ibrahim Coomassie, Inspector-General of Police, 1993-1999; Muhammed Bello, a former Chief Justice of Nigeria; Shehu Musa Yar’Adua, politician, major general and Chief of Staff, Defence Headquarters 1976-1979; Isa Kaita, first Northern Nigeria minister of education; Hassan Usman Katsina, Military governor of the Northern Region 1966-1967; and Umaru Faruk Abdullahi, a former President of the Court of Appeal
Others include Aminu Bello Masari, a former Speaker, House of Representatives, 2003 to 2007 and now governor-elect of Katsina State; Abdullahi Dikko Inde, Comptroller-General, Nigerian Customs Service; Mamman Nasir, the first Attorney General and Minister of Justice, Northern Nigeria; and Muhammadu Dikko Yusufu, Inspector-General of Police from 1975 to 1979.
Katsina State has been very lucky with good leaders particularly in the last 16 years since the advent of the Fourth Republic. The late Umaru Yar’Adua led the state from 1999 to 2007 and was credited with a lot of infrastructural development as well as prudence in the management of the state’s resources. His performance perhaps made former President Olusegun Obasanjo to pick him as the party’s presidential candidate in 2007. Well, while Yar’Adua paved the way for Ibrahim Shema as governor, the incumbent consolidated and surpassed the achievements of his predecessor.
There are a number of things other Nigerian politicians can learn from this governor. However, I must say that this piece is not being written solely from hearsay or what the governor said during his May 9 interview on Channels TV. I am an eyewitness and had previously written of my experience during a visit to the state between May 27 – 29, 2013 in my article of June 4, 2013.
According to Shema, he completed all the developmental projects initiated by his predecessor, Yar’Adua. These include the state university and airport projects among others. This is uncommon in our clime where incoming administrations are more inclined to abandon projects of their predecessors no matter how much had been spent on them and however desirable they are for the betterment of their society. This is because they do not want to live in the shadows of their predecessors. They tend to forget that government is a continuum.
Also worthy of emulation is the prudent management of resources of Katsina State under Shema. Though not an oil producing state, the governor believes in the principle of living within his means. For eight years, he did not borrow to run his government. No bank loans, no bond, no multilateral or bilateral loans nor foreign or local debts. Not even the sizeable reduction in the federal allocation to the state as a result of dwindling oil revenue has warranted any borrowing from Shema to augment the financial shortfall. Yet, the governor pays salaries and pensions of Katsina workers between 22 and 24 of every month. Is this not a Nigerian wonder? Many of his colleagues have heavily indebted their states by collecting huge loans and bonds from the capital market even to pay salaries! Many states, including oil rich ones, are owing workers’ salaries; some as high as up to six months. My home state of Osun is one of such, likewise Plateau, Benue, Abia, Imo, Rivers and others.
Shema said his annual budget is skewed in favour of capital expenditure. It is the ratio of 70:30. That is 70 per cent capital spending and 30 per cent recurrent outlay. He also said he never awarded contracts he did not have the funds to execute. So, he pays 40 per cent mobilisation fees to the government contractors and puts the balance in fixed deposits with the banks to yield interests. It was from the money accruing from such bank savings that he built an ultra-modern Government House in Katsina State.
According to media reports, the state government declared free education from primary through secondary schools and gave scholarships to Katsina State students in tertiary institutions. Over 700 of such students were sponsored by the state to study courses in the areas of need of the state in overseas universities. Courses for which such full foreign scholarships were given include medicine, pharmacy, engineering, and nursing. These heavy investments in education did not stop the state government from providing other infrastructures. Katsina government also procured 34 ambulances to provide health services to people in rural communities.
Agriculture comes next to education in the state. The Songhai farm initiative was adopted with over N1bn sunk into various agricultural projects. The government revived farm settlements and also subsidised agriculture and dry season farming is practised all the year round. Some of the dams like the Jibia Federal Dam, Ruwan Sanyi, Kusa and Kusada dams have been rehabilitated to provide irrigation services to farmers. Tractors are also loaned to farmers at subsidised rate. I also learnt that soft loans are being given to youths so that they can become self-employed. This is aside from the vocational training skills given to those who want to learn technical skills.
The challenge before the governor-elect of the state, Aminu Masari. who will be taking over on May 29 is how not only to sustain and consolidate the achievements of Shema in office but to surpass it. I do hope politics of vendetta will not be played where the incoming governor will jettison the laudable programmes of the outgoing governor. I do hope other state governors will learn from the sterling performance of Shema and deliver good governance in their states as well.
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Wednesday, May 6, 2015

Challenges of media practice in Nigeria

Jide Ojo
“Quality journalism enables citizens to make informed decisions about their society’s development. It also works to expose injustice, corruption, and the abuse of power…Freedom of expression and press freedom are not luxury attributes that can wait until sustainable development has been achieved – it is an enabler for the enjoyment of all human rights and, therefore, vital to good governance and the rule of law.”
- Part of a joint statement for the 2015 World Press Freedom Day issued by the UN Secretary-General, Ban Ki-moon, UNESCO Director-General, Irina Bokova, and the UN High Commissioner for Human Rights, Zeid Ra’ad Al Hussein.
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On May 3, 2015, the world celebrated another Press Freedom Day under the theme, “Let Journalism Thrive: Towards better reporting, gender equality and media safety in the digital age.” It has been an annual ritual laced with symposia and awards. This year’s theme is very fitting given the escalating danger of media practice globally. According to Time Magazine of December 16, 2014, “Media activists say attacks on journalists are becoming increasingly barbaric.” At least, 66 journalists were killed across the globe in 2014 while another 178 media workers were imprisoned, according to industry monitoring outlet, Reporters without Borders. They also noted that the number of kidnapping cases skyrocketed dramatically in 2014 with 119 journalists reportedly being abducted, a 37 per cent increase year-on-year.
This year’s World Press Freedom Day got me reflecting on the state of media practice in Nigeria. Journalism practice in the country has come a long way since its debut in 1859 and there is no doubt that the Nigerian media has helped in the birthing and consolidation of democracy in the country. The media in the country has been described in superlative adjectives as being vibrant, fearless and resourceful. However, media practice is becoming increasingly endangered.
Using the just concluded 2015 general elections as a mirror of the state of media practice in the country, it is noteworthy that the members of the Fourth Estate of the Realm performed creditably well in the discharge of their duties. The members of the Nigerian media were trained by the Independent National Electoral Commission and some other agencies ahead of the elections. In discharging their duties, they did inform and educate the masses about the electoral process. They wrote editorials, did news analyses, conduct opinion polls, and organise political debates among the candidates and their political parties. Many electronic media outlets also designed political education programmes through which election experts were invited to shed light on some knotty political issues. Between March 10 and April 23, 2015, I participated in 25 of such events, both on radio and television,   many of which were live discussion programmes.
No doubt, it was a cocoa season for the media. A season of harvest of megabucks. Many of the media houses laughed to the banks as politicians heavily patronised them through placement of advertisements, live coverage of political rallies, sponsored documentaries, commercial interviews, political jingles and paid news reportage. The political billboards mounted in strategic places across the country were part of political media expenses. In the course of the electioneering, the media kept the electorate and the citizenry informed about the process enabling them to make informed decisions on Election Day. Even the Nigerian Union of Journalists keyed into peace education by urging journalists to embrace conflict sensitive reportage.
As the saying goes, there are two sides to every coin. The media in the course of their political reports also exhibited some excesses. A number of the reports of some of the media houses were not only sensational and exaggerated but were also patently biased. Some of them threw ethics and standards to the wind and acted recklessly. They dished out falsehood, half-truths and jaundiced reports for public consumption. They concocted stories and forecast winners based on primordial sentiments. There is no doubt that the ownership structure has a lot of influence on the orientation and service delivery of many of media outfits. Many otherwise apolitical news media outlets came under political pressure of their owners or due to pecuniary gains. Truth be told, most of the private media houses are owned by politicians or politically exposed persons and like the saying goes, he who pays the piper dictates the tune.
In a bid to optimise their financial gains from the electoral process many aired or published hate speeches, and inflammatory comments. Others also breached the provisions of Section 100 subsections 3, 4 and 5 of the Electoral Act 2010, as amended, which talk about equal treatment of political parties and candidates. Many state governors also infracted on Section 100 (2) of the Act by employing state media to the advantage of the ruling parties and the disadvantage of the opposition political parties in the state.
The ugly aspect of the media practice during the 2015 elections was the attacks carried out by politicians and their agents on journalists. On Saturday, November 29, 2014, suspected political thugs smashed the camera and tore the clothes of Channels Television crew members that were at Yebumot Hotel Ilorin, Kwara State, venue of the local government congress of the Peoples Democratic Party. In another incident, Charles Eruka, a Channels TV reporter was attacked by political thugs while covering an All Progressives Congress campaign at Okrika, Rivers State on February 17, 2015. On April 27, 2015, unknown gunmen stormed the office of TAO FM, a community radio station in Okene, Kogi State. They bombed the radio station with Improvised Explosive Device and reportedly killed four people in cold blood. The barring of the crew of the African Independent Television from covering the activities of the president-elect, Muhammadu Buhari on April 27 based on some nebulous security concerns as well as ethical issues is another worrisome development that left a sour taste in the mouth because as it turned out, the president-elect was not even aware of such order which means his aides were just being overzealous.
Aside from the physical attacks and molestations suffered by journalists in Nigeria, one other sad thing the members of the pen profession have had to endure is the poor condition of service. Many journalists are being owed salaries and allowances. They are asked to use their identity cards as meal tickets and have had to depend on tips and bribes euphemistically referred to as “brown envelopes” to survive.
The regulatory bodies of the various media cadres have a lot of work to do to sanitise the industry. The NUJ, the Nigeria Press Council, Nigerian Broadcasting Commission, the Nigerian Guild of Editors, The Radio, Television and Theatre Arts Workers Union of Nigeria and the Newspaper Proprietors Association of Nigeria need to build a synergy to ensure that the noble profession of journalism maintains high ethical standard in accordance with the profession’s code of conduct.
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