Electricity Privatization: the Ominous Signs and the Case for Working People’s Opposition
Electricity
Privatization: the Ominous Signs and the Case for Working People’s Opposition
Like every house built on fraud, the attempt of the
Nigerian ruling class to privatize Power Holding Company of Nigeria (PHCN), and
the electricity sector, is already falling flat. Of course, without principled
opposition by the working masses, led by their unions and other pro-masses
organizations, the current privatization of electricity utility company is
bound to worsen the living conditions of the working and poor people. As we
said in an earlier write-up on this privatization (see Nigeria’s Electricity Privatization
is an Economic Dead-end, www.pambazuka.org
and www.socalistnigeria.org)“…The privatization of the electricity sub-sector has nothing
to do with solving the horrifying experience Nigerians have been made to go
through with the virtual collapse of electricity infrastructures; itself caused
by the deliberate plundering and sabotaging of the corporation by the
capitalist class in both big business and politics. It is on the contrary, a
means by which big businesses across the board, both local and foreign, plan to
profit from the misery and frustration…of Nigerians.”
The labour unions, especially NLC and TUC, must
build a mass movement to reverse electricity privatization. Against the
mismanagement and cronyism associated with the publicly-owned but
bureaucratically- and corruptly-run PHCN which has meant virtually looting of
all monies budgeted for the corporation and the sector by the corrupt political
elites and big business, labour movement leadership must advocate democratic
public ownership and management under the elected representatives of workers,
communities, consumers and relevant professionals. Against impending
astronomical hike in tariff and cut off of communities from supply, which will
accompany this privatization, labour movement must build mass movement, against
the massive fraud called electricity privatization.
The drama that accompanied this process of payment
has further underscored the fact that power privatization is already a failure
from the standpoint of national development. This is aside the fact that privatization,
by its design and philosophy, is robbery of the poor in the interest of the
rich few. The fundamental objective of private business is profit maximization,
which can be made through exploitation of workers and general consumers. This
is made worse by the primitive accumulative character of Nigeria’s capitalist
class, which rely on state handouts.
According to the Guardian of August 19-22, 2013
editions, in the run up to the deadline for completion payment, the bidders for
the ten distribution companies, under the Disco Roundtable, had wanted among
others: 5-10 years tax holiday from government and remittance of MYTO subsidy
fund to them even when they have not started operation, and government guarantee
of bank loans to them. The bidders for the distribution companies at the end of
the process are expected to have paid $1.55 billion (about N250 billion). By
giving them just five-year tax holiday, the government will in effect be giving
them more than they paid for the privatized companies. With government clearing
the debts of PHCN and retrenching thousands of workers, coupled with the hike
in tariff by around 100 percent, the coast is clear for the private buyers to
make unhindered big bucks. This is aside over N360 billion given to the
Nigerian Bulk Electricity Trader (NBET), to help pay for electricity supplied
to privatized distribution companies, in case they default. Yet, these buyers still
wanted more.
If you feel that this fraud is about the
distribution companies alone, they you are in for a shocker. Three of the newly
built generating plants – Geregu 1, Ughelli and Sapele - costing about N300 billion were sold for less than N100
billion. Furthermore, the governments at all levels have concluded plans to
sell off the ten new power plants built under Niger Delta Power Holding Company
(NDPHC). These plants were built with a total cost of over $8 billion, but as
previous sales and analysis above have shown, they will merely be Christmas
gifts to the so-called private investors. The private license holders, most of
whom have not generated any megawatt, are lobbying to participate in the
purchase of the new plants. Meanwhile one of the excuses of government for the
mindless privatization is that public corporations have become drains on
government, and are not profitable. Yet the same government is committing
public resources to ensure private profit making.
But, it could not have been
different. The so-called private investors are gangs of politicians, their big
business collaborators and international finance backers. This is reflected in
the manner in which public officers and big business people change roles. For
instance, the spokesperson for the Disco Roundtable is a former Chairman of
Nigerian Electricity Regulatory Commission (NERC) – the agency that is meant to
regulate electricity sale process – Ransome Owan, while the head of the IPPAN,
the lobby group for so-called independent power producers is the former
minister and strategist in various governments, Prof. Jerry Gana. In fact,
previous privatizations featured many private companies owned or partly owned
by past and present government officers, including generals, ministers,
president, vice president, etc. Therefore, the privatization process has been
nothing more than Christmas gifts, actually to the same people selling.
More than this is the fact that
these private buyers only rely on expected loans to run these privatized
companies. Meanwhile, banks and financial houses were only ready to grant loans
for these private buyers to pay for the privatized companies, on the basis of
government insuring their loans, and securing profits. As expected, this will
mean high interest rates which can only be covered by massive hike in
electricity tariff. It will mean cutting operation costs which can only be
achieved by reduction in workforce and concentrating operations on the most
profitable areas of the privatized companies. This will imply that the current
erratic power supply will worsen for most areas, especially where revenues are
low. This is already on stream with the introduction of pre-paid meters, which
cost is priced out of the reach of most Nigerians. Unlike under publicly owned
PHCN, the current arrangement will mean more problems for consumers than ever,
especially in terms of customer services. The question of repair and
replacement of facilities e.g. transformers will depend on whether the affected
area can generate enough profit or not. Surely, the privatization, rather than
resolving the erratic nature of and inaccessibility to electricity, will worsen
the problems.
It will indeed create more problems.
As said earlier, the buyers are weak economically to commit huge resources for
long term investment or future profit making. In fact, global capitalism, on
the basis of current neo-liberal arrangement, is not interested in long term
investment; at least not in the third world economies with their economic
fragility and political instability. Therefore, electricity privatization,
rather than expanding electricity infrastructure, will actually shrink access
to electricity, presently put at about 40 percent of population. According to
International Energy Association (IEA) 2010 World Energy Outlook Report, around
one trillion naira is needed yearly in investment for the next ten years to
provide universal access to all households in Nigeria. How will private buyers
who could hardly mobilise less than N400 billion in a year to pay for the
bought companies, provide this amount? Can Nigerian banks and financial houses
provide this amount without collapsing? Which foreign investors will be ready
to commit such huge amount to Nigeria’s fragile economy? Where will the 70
percent poor Nigerians get the income to pay the bill of such investments?
Meanwhile, within the last 12 years,
over $20 billion (N3 trillion) has been wasted on power generation and supply
by successive governments. This estimated N1 trillion yearly investment is less
than the N1.3 trillion cornered yearly by just 17, 474 political office holders
as salaries and official perks. Just less than 20 percent of the over $500
billion earned from oil and gas will provide stable electricity to all
Nigerians. Yet, Nigerians are told government does not the resources to provide
electricity. Even if these resources are committed to the sector, Nigerian
ruling elites will surely loot them, the same way they have directly looted over
$400 billion. Surely, Nigerian capitalist class, on the basis of their
backward, primitive accumulative character and neo-liberal outlook cannot move
the country forward, economically, socially, technically and politically;
neither can global imperialism take Nigeria out of backwardness. The power
privatization has shown this clearly.
In order to solve the problems
facing power sector, there is the fundamental need to take the sector out of
the hands of both private profiteers and corrupt, pro-big business public
officers. The power sector, including the PHCN, must be put under democratic
public ownership. This will mean that while the sector is made public property,
it will be managed, supervised and controlled democratically by elected
representatives of in-house workers’ unions, communities, consumers, and
central labour unions. It is with this approach that money allocated and
revenues made will be democratically used for the collective improvement of the
sector from local to national level. It is on this basis that there can be well
laid out plans to expand infrastructures and maintain existing ones. It is on
this basis that electricity sector can be made to be instrument of development
of the country. However, this in itself will mean putting the mainstay of the
economy under the democratic control and management of the working people and
communities. By taking the economy away from the hands of the few big
businesses and their multinational backers, Nigerians can plan how to deploy
the enormous but inexhaustible wealth of the country to provide for all, and
the future yet unborn.
However, this cannot be achieved
without firstly dethroning the current neo-colonial capitalist class in
Nigeria, and establishing a genuine working people’s government based on
socialist programmes and agenda. This underscores the need to build a
pan-Nigerian working people’s political party with a clear internationalist and
socialist outlook. Such a party based on working people, youth, students, and
the poor, and opposed to anti-poor policies of privatization,
commercialization, etc. can mobilise people to the political arena to change
the course of history.
KOLA IBRAHIM
(08059399178, kmarx4life@gmail.com)
P. O. Box
1319, GPO, Enuwa, Ile-Ife, Osun State
Comments
Post a Comment