On October 7, the 2023 budget appropriation bill was made public by the Buhari administration. The document gave a breakdown of allocations to all ministries, departments, and agencies (MDAs) across the board, for the year 2023.
Nairametrics reported the details for the power sector. However, in the breakdown, the personnel and overhead costs were absent for the Transmission Company of Nigeria (TCN). The TCN has budgeted zero Naira for its personnel and overhead costs but had over N26 billion for total allocation in the 2023 budget.
In the cost breakdown, TCN listed N26,264,639,559, as the amount for its capital expenditure (CapEx), construction/provision, construction/provision of fixed assets-general, construction/provision of electricity as well as its total capital, and total allocation.
However, other power agencies and departments, including the Rural Electrification Agency (REA), Nigeria Electricity Liability Management Limited, Nigeria Electricity Management Services Agency (NEMSA), and the National Power Training Institute (NPTI) list costs for personnel, overhead as well as ongoing projects.
In the 2022 budget, TCN had no cost for personnel and overhead expenses. This raises the question of transparency in the federal-owned electric utility corporation. The TCN is yet to offer an explanation for this gap.
The issue of a lack of transparency in Nigeria’s power sector has been a topical one for a while. Some industry stakeholders have identified several areas where transparency was not put into practice. According to some of these stakeholders, being transparent as an agency or department under the power sector gives credence to operations and enhances public trust in the sector.
The development of public trust is important in the power sector, due to the fact that the recurring crisis in the sector has been and is still threatening businesses and livelihoods.
Past stakeholders’ views on transparency in the power sector
When the Nigerian Electricity Regulatory Commission (NERC) announced in 2019 that it would be carrying out an upward review of tariffs, the executive secretary, of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, said that in order to ensure transparency and gain public trust, NERC could issue a regulatory order mandating distribution companies (DisCos) to meter all feeder and distribution transformers if no such order yet exists.
She also noted that electricity bills should show key performance indicators (KPIs) and variables to explain movements.
According to her, a cost-reflective tariff industry might be elusive without transparency in the sector. She went further to state that given poor remittances and liquidity crisis in the sector, transparency and monitoring were necessary for the cash flows into and out of distribution companies (DisCos), Transmission Company of Nigeria (TCN), and fuel suppliers.
During a State House ministerial briefing in March 2022, Nigeria’s power minister, Engr. Abubakar Aliyu warned DisCos against selling electricity meters to customers, saying procurement of meters is free of charge.
He said: “You will always have these kinds of things – like somebody trying to short-change others; otherwise, these meters are free; we said it a number of times. These are tools that will generate liquidity. How can we sell something that will bring in money? It is the responsibility of the DisCos and the government is seeing that they are not doing so.”
During the February 2022 reconstitution of the National Council on Privatization (NCP), Kabir Ibrahim, the national president of the All-Farmers Association of Nigeria (AFAN), said some failures in the power sector were connected to a lack of transparency.
“It is a welcome development that the government has decided to reconstitute the NCP. I want the members to understand that the failure of the DisCos is not unconnected to the secrecy and lack of transparency in the privatization of the power sector.”
“The newly inaugurated council should apply due diligence and transparency in privatizing government holdings. Bad politics and downright red-tapism as well as corruption, make all efforts like the privatization exercise fail instead of ushering economic growth and national prosperity.”
The absence of personnel and overhead cost details from TCN may seem inconsequential. However, it is a symptom of a disconnect between some stakeholders in the power sector and their customers. As a critical agency in Nigeria’s power sector value chain, there is an onus to make information available to consumers, so as to foster a business relationship devoid of suspicion and hearsay.