Will Electric Power Issues Sway Nigeria’s Election?

By D.A. Barber AFKI Original Published: February 26, 2015, 8:08 am
caribjournal.com

With the multitude of challenges faced by Nigeria’s power industry, Boko Haram may be the least of Nigerian president Goodluck Jonathan’s problems in his bid for re-election.

In fact, Jonathan’s re-election chances could depend on whether the lights stay on.

“I think he is in trouble. I think there are a lot of questions out there; some people feel it’s not possible for him to lose – I don’t share that,” Steven Hayes, president and CEO of the Corporate Council on Africa, told AFKInsider. “I think that he could conceivably lose the election if it’s open and fair.”

While Jonathan has been criticized for his handling of everything from Boko Haram and corruption to the economy and the oil industry, more recently there have been protests over high electricity rates. The electric power Jonathan promised would be available by now is still lacking.

Those power protests have not gone unnoticed.

In the months running up to Nigeria’s elections, there’s been a flurry of government-announced deals concerning electric power projects and new foreign investments.

But if the sudden interest in energy is an election ploy, it could backfire.

“Maybe the population will call their bluff on that and say, ‘Well you’ve been in office for so long, why now?’” said Monde Muyangwa, director of the Woodrow Wilson International Center Africa Program, in an interview with AFKInsider.

Power Promises

With a population of 170 million, it is estimated Nigeria needs about 40,000 megawatts of electricity but fails to reach even the 13,000 megawatts just to meet current peak demand. In fact, the peak electricity generated on Feb. 16 was 3,912 megawatts, according to the Federal Ministry of Power.

According to a December report from the World Energy Council, Nigeria ranks 81 out of 129 countries in their “World Energy Trilemma” ratings.

Critics say Jonathan failed to fulfill his 2011 promises to upgrade electric power generation, distribution and transmission to achieve the government’s previous targets of 10,000 megawatts by December 2013 and of adding 13,000 megawatts from wind and solar.

“Nigeria is producing only 2.5 percent of what power is being produced in South Africa,” said Minister of Power, Prof. Chinedu Nebo, in a Jan. 16 press release. Later, Nebo told London reporters over the weekend of Feb. 8, that it will be impossible to provide electricity to everyone in Nigeria any time soon. “The cost of providing electricity per megawatt on average is $2 billion,” he said. “To get to where South Africa is, you will need about $3.2 trillion. Where will you find that kind of money?”

South Africa has less than a third of Nigeria’s population.

Recent problems facing Nigeria’s power sector include lack of new investors; non-metering of customers that has resulted in “estimated” billing; as well as transmission and distribution technical problems.

In October, the Chairman of Nigerian Electricity Regulatory Commission said almost all the 20 turbines in the gas-fired power plants “have no gas or very little gas available” for generating electricity. Ongoing gas supply shortages have largely been blamed on pipeline vandalism, which was not anticipated when electric power targets were formulated.

The result of all these problems has been that electric customers have not seen gains promised from privatization of the electric industry in Nov. 2013.

“It looked like (privatization) was going well, then I think it started to sort of trail off,” said Todd Moss, chief operating officer and senior fellow at the Center for Global Development, in an interview with AFKInsider.

“My sense is that there’s a real commitment to do it (privatization) and that there is a process underway,” John Campbell told AFKInsider. Campbell was U.S. ambassador to Nigeria from 2004 to 2007 and is a senior fellow for Africa policy studies at the New York-based Council on Foreign Relations. “But as you will have seen, actually electric power generation is declining, it’s not increasing.”

The current practice by distribution companies to do “estimated” consumer billing, known as “crazy bills,” has also persisted after private investors took over despite warnings by the Nigerian Electricity Regulatory Commission that meters must be read so customers are only charged for the electricity they use.

Critics say companies continue to sabotage government efforts at smart metering because estimated billing generates more revenue than meter reading. This has led to a number of protests across Nigeria. There is also dissatisfaction over a new electricity tariff that came into effect on Jan. 1.

Fast-Track Timing

With the recent fast-tracking of new energy projects, it could be construed that the administration is playing catch-up with major announcements just prior to the election.

“Of course, as all politicians do. I mean this is part of electoral politics across the world and in Africa especially,” Muyangwa told AFKInsider. “I’m not saying I necessarily agree with it but, I understand where politicians are coming from. They want to stay in office; they want to show they are delivering; so not only are they making promises about what they will deliver if they are re-elected, but they’re also trying to show in a real tangible way what they’ve been capable of delivering.”

“It could be,” said Mark Schroeder, vice president of Africa analysis at the Austin-based global intelligence and advisory firm Stratfor, in an interview with AFKInsider. “If you listen to his supporters and his ministers – and especially on the economic side of the equation – they’re certainly trying to highlight the progress and growth that Nigeria’s experienced under Goodluck Jonathan.”

Jonathan isn’t trying to pad his resume – he doesn’t have to, Campbell said.

A flurry of big project announcements in Nigeria

A flurry of big project announcements began in August when the government signed a $3.7 billion deal with a Nigerian-Chinese consortium for a 1,200-megawatt coal-fired power plant in Enugu state.

In September, Lafarge Africa announced plans to build a new 220-megawatt gas-fired power plant and triple the output of the Ewekoro power plant.

In October, the federal government said it is currently constructing 118 power projects spread across the country in different stages of completion.

In November, the government signed a $2 billion agreement with two U.S. companies to build 1,200 megawatts of solar projects.

And December was an exceptionally busy month:

  • The U.S. Trade and Development Agency signed on with two recently privatized distribution companies to sponsor a feasibility study for smart grid technology.
  • Groundbreaking took place for U.K.-based PSC Solar Industries’ solar panel manufacturing plant in Ogun State.
  • The Infrastructure Bank of Nigeria announced it was establishing a $500-million infrastructure fund to invest in clean energy infrastructure projects.
  • Nigeria received a $200 million loan from the German Development Bank (KFW) for renewable energy development.
  • Japan released $14 million for upgrading the Jebba Hydroelectric Power Station.
  • The World Bank announced $1.75 billion for a “Capacity Building Program on Post Privatization Monitoring for Power Sector” as part of $7 billion earmarked for Nigeria over the next four years.

This year, the pace has continued.

In late January, the government announced it was building 200 new hydropower dams with a target of adding 10,000 megawatts by the end of the year.

So far this month, the government granted an operating license for a 1,200-megawatt coal power plant, and signed agreements with Firstgate Business Intermediaries Limited and its South Korean partners to build two 1,000- megawatt gas-fired and solar power plants in Kogi State, and with China’s TBEA for new transmission lines and substations.

The U.N. Development Program also announced it was launching $4.4 million worth of renewable energy projects starting in June and the Nigerian government released $25 billion in loans to four distribution and six generation companies.

“They’ve had a bunch of energy projects sort of ready to go and there was some politics holding it up, and that kind of got unstuck so we saw a bit of the floodgates open over the last 12 to 18 months,” said Moss with the Center for Global Development. “So that’s basically what happened; all this stuff had been building up and then came unstuck.”

Election Reset

President Goodluck Jonathan’s ruling Peoples Democratic Party was to face off against former military ruler Muhammadu Buhari of the All Progressives Congress in what was expected to be a closely contested election on Feb. 14. But one week before the vote, the electoral commission postponed the election to March 28, insisting the decision was based on a letter from security agencies fighting Boko Haram noting that security “cannot be guaranteed” if the elections proceed as scheduled.

While Jonathan did not make the announcement himself, the electoral commission is commonly considered an instrument of Jonathan’s ruling Peoples Democratic Party, though “the INEC continues to be viewed with a great deal of suspicion by all sides,” according to a Jan. 30 Brookings Institute report.

Some feel the Jonathan administration merely wants time to resuscitate its campaign. But there are already rumors that the election could be pushed back even further – as it was twice in 2011 – by Jonathan based on the need to battle Boko Haram.

“He does have the power to do it,” Campbell said. “The constitution allows the elections to be postponed for six months with the approval of the National Assembly if the country is in a ‘state of war.’ A state of war is not defined and Jonathan uses ‘state of war’ terminology all the time with reference to Boko Haram.”

“Unless he’s completely lost his mind, he wouldn’t do that,” Cooke told AFKInsider. “There would be an explosion of anger and that would be political suicide.”

Oil, the other issue

The other issue hanging over Jonathan’s head is oil, primarily from the Niger Delta. The recent fall in the oil prices represents an 18 percent drop in government revenue.

Campbell says elections in Nigeria always “consume a great deal on money.”

“President’s have access to unlimited money – basically oil money,” Campbell said. “So it’s not the best time for oil (prices) to be dropping.”

“The power of the incumbency is huge; they have control over the big money and the big patronage network,” Cooke told AFKInsider.

“The concern will be if Jonathan loses. Does that upset the patronage bargain that Jonathan’s home region – the Niger Delta – receives from the federal government?” Schroeder said. “And if that patronage bargain is overturned, then you will see a reaction by the political elite and their enablers among the militants in the Niger Delta. And you’ll see that play out in the energy sector.”

Whoever wins, many are asking what will happen after the elections.

A one-day conference, Nigeria After the 2015 Elections: Which Way Forward?, that was originally scheduled for March 25 in London has been re-scheduled to April 25. According to the conference website: “One thing seems certain: the outcome of the political contest between the incumbent PDP and the opposition APC is more open than it has been in decades. The long tradition of ‘elite pacts’ in national politics looks like it is at an end.”

Nigerians have definitely made a lot of efforts to improve their elections management system “and I think that’s going to be applauded,” Muyangwa said. “Having said that, it’s not just about the management of the elections from a procedural view point; it is also the other issues that are going on in Nigeria right now: the oil crisis; the Boko Haram issue, and how all of those things will come together.”

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