President Muhammadu Buhari on Monday in Abuja assured Nigerians that the target of providing 11,000 megawatts of electricity by 2023 was realistic and realizable, and would provide a lifeline for many businesses and improve the living conditions of many Nigerians.
Speaking at the First Year Ministerial Performance Review Retreat at the State House Conference Centre, the President said that “implementation of a ‘Willing buyer, Willing Seller Policy’ for the power sector has opened opportunities for increased delivery of electricity.’’
Buhari’s speech was read on his behalf by Vice-President Yemi Osinbajo, as the President Buhari was away in Republic of Niger for the 57th Ordinary Session of the ECOWAS Authority of Heads of State and Government.
Buhari pointed out that further delay in implementing the reforms was not food for the economy and Nigerians who would be left to bear the burden of avoidable shortages.
He explained that increase in electricity tariff and deregulation of the petroleum sector, which hiked petrol prices were just coincidental, as they were crucial decisions taken at the beginning of the year, preceding the Covid-19 pandemic.
“Implementation of a Willing Buyer, Willing Seller Policy for the power sector, has opened up opportunities for increased delivery of electricity to homes and industries.
“We are also executing some critical projects through the Transmission, Rehabilitation and Expansion Programme, which will result in the transmission and distribution of a total of 11,000 Megawatts by 2023”, he stated.
According to the President, “one of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown, was the deregulation of the price of Premium Motor Spirit (PMS) such that the benefit of lower prices at that time was passed to consumers.
“This was welcome by all and sundry. The effect of deregulation though is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover we would see some increases in PMS prices. This is what has happened now. When global prices rose, it meant that the price of petrol locally would go up.
“There are several negative consequences if Government should even attempt to go back to the business of fixing or subsidizing PMS prices.
“First of all, it would mean a return to the costly subsidy regime. Today we have 60% less revenues, we just cannot afford the cost. The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration.
“Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now simply have no choice.”
He, nevertheless, appreciated the sacrifices made by citizens at this time, assuring them that it would not be taken for granted.
On electricity, the President added that the recent service based tariff adjustment by the Discos had also been a source of concern for the government.
“Let me say frankly that like many Nigerians, I have been very unhappy about the quality of service given by the Discos, but there are many constraints including poor transmission capacity and distribution capacity. I have already signed off on the first phase of the Siemens project to address many of these issues.
“Because of the problems with the privatization exercise, government has had to keep supporting the largely privatized electricity industry.
“So far to keep the industry going we have spent almost 1.7 trillion, especially by way of supplementing tariffs shortfalls. We do not have the resources at this point to continue in this way and it will be grossly irresponsible to borrow to subsidize a generation and distribution which are both privatized.
“But we also have a duty to ensure that the large majority of those who cannot afford to pay cost reflective tariffs are protected from increases. NERC, the industry regulator, therefore approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service.
“Under this new arrangement only customers who are guaranteed a minimum of 12 hours of power and above can have their tariffs adjusted. Those who get less than 12 hours supply, or the Band D and E Customers MUST be maintained on lifeline tariffs, meaning that they will experience no increase.
The President stressed that the timing of implementation of both tariffs was a coincidence.
His words: “There has been some concern expressed about the timing of these two necessary adjustments. It is important to stress that it is a mere coincidence in the sense that the deregulation of PMS prices happened quite some time ago, it was announced on 18 March 2020 and the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices.
“Similarly, the review of service-based electricity tariffs was scheduled to start at the beginning of July but was put on hold to enable further studies and proper arrangements to be made. This government is not insensitive to the current economic difficulties our people are going through and the very tough economic situation we face as a nation, and we certainly will not inflict hardship on our people.
“But we are convinced that if we stay focused on our plans, brighter, more prosperous days will come soon.”
President Buhari said many Nigerians were yet to be connected to electricity, assuring that the Economic Sustainability Plan (ESP) will provide solar home systems to five million Nigerian households in the next 12 months.
The President said the government had continued to support the Agricultural sector, the key to diversification of the economy, through schemes such as the CBN Anchor Borrowers Programme and the Presidential Fertilizer Initiative programme.
On security, he said: “Nigeria’s Law Enforcement Agencies have significantly scaled up their footprint across the country. As part of the efforts towards strengthening our internal security architecture, the Ministry of Police Affairs was created.
“Amongst others, we have increased investments in arms, weapons and other necessary equipment, expanded the National Command and Control Centre to 19 States of the Federation, and established a Nigerian Police Trust Fund, which will significantly improve funding for the Nigeria Police Force. We have also approved the sum of N13.3 billion for the take-off of the Community Policing initiative across the country, as part of measures adopted to consolidate efforts.’’
