By Martin Odiete, Abuja

Why Privatization of power sector must be reviewed now – Senate President 

…As Senate probes FG intervention in power sector 

…Adjourns plenary till June 2, 2020

President of the Senate, Ahmad Lawan, has called for the immediate review of the privatization exercise of the power sector by previous administrations. 

Lawan gave the charge in his concluding  remarks on a motion considered on the floor during plenary on Tuesday. 

The motion titled: “Power Sector Recovery Plan and the Impact of COVID-19 Pandemic” was sponsored by Senator Gabriel Suswam (PDP – Benue North East).

The Senate President, who bemoaned what he described as the “inefficiency of Power Generating and Distribution companies” in the country, called for a review or eventual reversal of the terms of privatization.

According to Lawan, parties involved in the shared purchase agreement with the federal government can only seek the intervention of the latter when sufficiently justified. 

“The power sector has been privatized as we all know, but it has not delivered. We gave them our common patrimony and they still came back to us as Distribution Companies (Discos) and Generating Companies (Gencos) to look for money from the public.

“I think the time has come to review, and probably reverse this privatization because if we stay as it is today, for the next ten years there will be no power in Nigeria, as the situation is. So we need to be decisive about the power sector. 

“We expected efficiency and effectiveness in power supply, but I think on both sides, the shared purchase agreements were maybe not adhered to. But definitely what is obvious is that the Discos have no capacity at the moment to give us power.

“The Gencos have challenges too, and I think it is not a good commentary that we should continue to give them money after we sold them. These are businesses now, they are private businesses.

“If there are areas that we must intervene as a government, then it must be seriously justified, but the way it is, I think there is need to review this privatization and see what has really happened, because something is certainly not right. 

“And for the next ten years, if there is nothing fundamental and drastic in this sector, nothing like power will be stable in Nigeria, and that will be unfortunate. 

“So, it is good our committee is investigating even the previous billions, in fact over a trillion. I mean that’s a lot of money and there must be justification for this. 

“We hope that they will be effective, but in the event that this thing is not addressed properly, there will be need for Government really to look into this privatization that has taken place, because probably the wrong investors took over or maybe government is not fulfilling its own promise,” Lawan said.  

Earlier, sponsor of the motion, Senator Gabriel Suswam explained that following the outbreak of the dreaded COVID-19 pandemic, the Federal Government through Ministry of Finance intimated the leadership of the National Assembly of plans to establish a N1.7trn Intervention Fund to be utilized to upgrade healthcare facilities across the country. 

The lawmaker stated that “while the appropriate Executive Bill that will articulate the actual use of the proposed N1.7 trillion COVID-19 Crisis Intervention Fund is yet to be presented to the Senate for consideration, the devastating impact of the pandemic on the power sector has necessitated the need for the Senate to draw the attention of the federal government to the need to include the sector in the disbursement of the proposed fund bearing in mind the vital role of stable electricity supply to current efforts towards jumpstarting the economy which is still groaning under the impact of the pandemic.” 

Suswam noted that, “stable and uninterrupted power supply is also a critical factor in the management of COVID-19 patients at the designated isolation and treatment centres across the country as well as  in the implementation of the proposed upgrade of healthcare facilities.” 

According to him, “prior to the outbreak of the COVID-19 pandemic and its attendant negative impact on the Nigerian Electricity Supply Industry (NESI), the NESI was already facing teething operational constraints including the absence of cost-reflective tariffs, inadequate enumeration and metering of consumers, limited access to funds for investment, poor revenue generation, and high levels of Aggregate Technical Commercial and Collection losses.”

He recalled that the Senate as a clear demonstration of its commitment to proffer lasting legislative solution to the challenges confronting the NESI recently mandated its standing committee on power to brainstorm with relevant stakeholders to identify all constraints with a view to addressing them in the interest of the Nigerian economy. 

The lawmaker, however, raised concerns that “the COVID-19 pandemic has further impacted negatively on the NESI as the Distribution Companies reported 50 percent loss of their monthly average revenue collection for the months of March and April 2020.”

He said that “if the negative impact of COVID-19 on the NESI continues without any emergency financial intervention from the federal government, Discos already facing dwindling revenues in the wake of the pandemic may not be able to meet their remittance obligations to the market as set by the Nigerian Electricity Regulatory Commission (NERC) in December, 2019 Tariff Order.”

Senator Smart Adeyemi (APC – Kogi West) in his contribution said, “when privatization came up, we were told that it will accelerate the economic development of our nation. We were told that it will create more jobs for people. 

“Today, Mr. President, virtually all sector that were privatized, I’m sure are worse than before they were privatized. Power Holding was privatized. I do not know how many of us that can boast that we have regular power supply.”

Accordingly, the Senate its resolutions while commending the federal government for the proactive initiative to establish the N1.7 trillion COVID-19 Crisis Intervention Fund, urged the Federal Ministry of Finance, Budget and National Planning to include the Nigerian Electric Power Sector in the disbursement of the proposed N500 billion Intervention Fund. 

The upper chamber also mandated the Senate Committee on power to investigate all federal government interventions in the power sector since the privatization of the sector to date with a view to ascertaining the adequacy of such interventions. 

It also mandated the Committee to investigate all market participants in the power value chain and ascertain the level of corporate governance compliance in the Nigerian Electricity Industry. 

While urging the Federal Government to suspend the planned tariff increase which is scheduled to take effect from July 1, 2020, the upper chamber called on the Central Bank of Nigeria to allow operators in the power sector access to foreign exchange for procurement of equipment and materials. 

The Senate also urged the Federal Government to consider additional tariff support to cushion the effect rate shock over a fixed period to allow time required for TCN and Discos to access funds and implement performance improvement investments that will support increased tariffs to certain classes of customers especially during the pandemic. 

The Upper chamber after consideration of the motion adjourned plenary till Tuesday, June 2, 2020. 

……..Senate begins amendment of Nigeria’s local content law to strengthen economy 

The Senate has commenced amendment of the Nigerian Oil and Gas Industry Content Development Act 2010, following the consideration of a bill seeking to boost local content and strengthen the nation’s economy.   

The Nigerian Oil and Gas Industry Content  Development Bill 2020, which scaled second reading on Tuesday, was sponsored by Senator Teslim Folarin (APC – Oyo Central). 

The lawmaker while leading debate on the bill, said the bill seeks to amend 38 Sections of the extant Act while introducing six new sections. 

According to Folarin, the essence of the bill is to bring the provisions of the sections to be amended into congruence with industry best practices. 

He recalled that the Nigerian Oil and Gas Industry Content Act which was passed in 2010 sought to among others, address the then abysmally low level of Nigerian content in the oil and gas sector of the economy; create a regulatory mechanism to monitor and enforce compliance by industry players; and to domesticate substantial part of oil and gas exploration and production activities within Nigeria. 

“You will recall that before this Act came into force in 2019, over ninety percent of the $20 billion spent yearly in the Nigerian oil and gas industry was repatriated abroad. 

“This was because a large chunk of the contracts were executed by foreign companies and in foreign facilities. With only few indigenous players and facilities participating in the contracting process in the industry, Nigerian content was less than five percent,” Folarin said. 

He however said with the enactment of the Act and the establishment of the Nigerian Content Development and Monitoring Board, Nigerians have also developed the capacity to carry out a lot of onshore upstream activities. 

“There has been a boost in the promotion of indigenous participation and the fostering of technological transfer as reflected in appreciable local growth. Only recently, one of Nigeria’s indigenous oil servicing firms established a 100 million fabrication plant in the Niger Delta region.

“The implementation of the Nigerian Content Fund by the Board has also facilitated the provision of capital and financial support to several indigenous companies,” the lawmaker said. 

The amendment to Section 11 captured in the new bill, according to Folarin, would give powers to the Minister of Petroleum to review the minimum target level for Nigerian content set in the schedule where the level is considered beyond the capacity of Nigerian companies by the board. 

Similarly, the amendment proposed to Section 33 of the Act would streamline and strengthen the process for obtaining expatriate quota to close the gap for current leakages and manipulation by foreign companies. 

Amendments to Sections 37, 38 and 39 in the bill are to improve the provisions relating to research and development and to ensure proper implementation, while Section 76 is proposed to give the Governing Council of the Board the role of Superintending over the conditions of service of employees of the board. 

Section 81 was also introduced to empower the Senate to screen and approve nomination of the Executive Secretary of  Nigeria Content Development and Monitoring Board (NCDMB) before confirmation. 

Contributing to the debate on the bill, Senator Olamilekan Solomon Adeola (APC – Lagos West) said, “this amendment is long overdue, and I want to believe it would stand. The Nigeria Oil and Gas Industry Content Bill should now be Nigeria Industry Content Development Act.”

“Now that we have succeeded in trying to see that local content has come to stay in the oil and gas sector, it is time for us to move to other line sectors which include manufacturing, ICT, construction and other sectors of the economy. 

“The main objective of this particular Act, is for two things: for Domestication and Domiciliation. That is the reason ab initio, the local content was set-up,” the lawmaker added. 

The bill after scaling second reading was referred by the Senate President, Senator Ahmad Lawan, to the Committee on Local Content for further legislative work. 

The Committee which is Chaired by Senator Teslim Folarin was given four weeks to submit its report to the Senate.

………COVID-19: Senate moves to ensure food security to avert emergency crises

…seeks establishment of Food Reserve Agency 

The Senate on Tuesday commenced legislative work on a critical bill to ensure food security for Nigeria with the establishment of the Food Reserve Agency to avert any form of emergency food crises in the future. 

The bill which scaled second reading on the floor during plenary was sponsored by Senator Abdullahi Adamu (APC – Nasarawa West). 

Leading debate on the bill, Senator Adamu while underscoring the importance for the diversification of the Nigerian economy, explained that there is the need for enabling laws to address the problem of food insecurity. 

According to the lawmaker, the Food Reserve agency when established, would be responsible for storing food grains and other food commodities for strategic purposes. 

“Agriculture plays a pivotal role in the development and growth of every nation. Any country seeking to diversify its economy, alleviate poverty, create jobs and ensure food security should prioritize agriculture. 

“Nigeria recognizing the important role Agriculture plays has made efforts to place the sector at the fore by introducing different intervention programmes and policies backed by enabling laws.

“A further step to be taken to ensure food security in our country at all times is to formulate enabling laws that will address food insecurity,” Senator Adamu said.

He stated that the Food Reserve Agency when established, “will implement the overall National Food Reserve Policy to ensure a reliable supply of designated commodities in the country.” 

The lawmaker recalled that, “the recent mandate of the President during the COVID-19 pandemic to distribute 70,000 metric tons of grains from the Grains Reserves shows clearly how important it is for a country to have a Food Reserve Agency.”

He stressed that, “with the existence of the Agency, emergency food crises will be taken care of especially in the period of a pandemic.”

“There will also be a reduction in post-harvest losses as silos, warehouses, equipment, ancillary facilities and other suitable storage facilities will be installed and maintained.

According to Senator Adamu, with the Agency in place, Nigeria will be taking the right step in the right direction as replicated in other African countries such as Zambia and Tanzania.

The bill after scaling second reading, was referred by the Senate President, Senator Ahmad Lawan, to the Committee on Agriculture and Rural Development for further legislative work.

The Committee which is Chaired by Senator Abdullahi Adamu, is expected to report back to the upper chamber in four weeks. 

……….Senate commends Buhari over military action against banditry 

…wants operations extended to Zamfara, Kaduna, Niger and Sokoto states

The Senate on Tuesday commended President Muhammadu Buhari for his recent directive to launch a military offensive against bandits in Katsina State. 

The commendation came against the backdrop of a motion considered on the floor on the need to integrate adjoining States of Niger, Zamfara, Kaduna, Kebbi and Sokoto states. 

The motion was sponsored by Senator Aliyu Sabi Abdullahi (APC – Niger North). 

The lawmaker in his motion recalled that  Senate had last week Tuesday, May 12, 2020, considered two separate motions on the need for the federal government to immediately address the growing spate of banditry in Niger and Kataina States, respectively. 

Senator Sabi Abdullahi said the upper chamber was “aware through a Presidential Spokesman that President Muhammadu Buhari has authorized the commencement of a major military operation to sweep bandits and kidnappers out of Katsina state; as major proactive measures by Special Forces to replace the reactive strikes against the camps of these bandits and criminals”. 

According to him, “the criminalities by these armed bandits and kidnappers is carried out mostly under the cover of the contagious forests reserves and areas stretching from Katsina, Zamfara, Kaduna and Niger States with pockets of safe havens in Kebbi and Asokoro states.”

The lawmaker expressed concerns that “a major offensive in Katsina State alone is likely to make the armed bandits and kidnappers seek safer haven in Zamfara, Kaduna and Niger states which hosts the Zurmi and Kamuku forests among others, further compounding the plight of hapless and poor communities along these forest corridors.” 

He added that, “it was the earlier massive operations in Zamfara and Kaduna states that led the armed bandits to seek safe haven elsewhere, this moving into Katsina and Niger States respectively; and some others pushing their lick to some parts of Asokoro and Kebbi States. 

The Senate in its resolutions, accordingly appealed to President Buhari to expand the scope of the operations to include Zamfara, Kaduna, Niger and Sokoto States and any other surrounding areas or States that the armed bandits may want to seek safe haven following the massive operation. 

The upper chamber also called on the Military formations and the Nigerian Police to increase their surveillance operation to track movements by these armed bandits to recent them accessing any safe haven. mains”