Fashola and the marriage of Power, Works and Housing portfolios

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By Hakeem Bello

President Muhammed Buhari’s appointment of Babatunde Fashola as Minister of Power, Works and Housing was recently described as a “masterstroke” in one of the daily newspapers. However, the author’s analysis of what makes the appointment a masterstroke reads more like the description of a stroke of luck. All the factors the author listed to make him conclude appointment was a masterstroke were already known to most Nigerians, given Fashola’s tenure as  governor of Lagos State for eight years.

A masterstroke connotes something only one with a special knowledge of the subject matter could do, and even then, only the very best of those with such expertise, “a master”, can on rare occasions execute, the “stroke”.

However, the author, who first noted this fact, was right, but for the wrong reasons. Fashola’s appointment was a “masterstroke”, and it is important for Nigerians to understand why it was a masterstroke.   Combining two of the most important portfolios for Nigeria’s development – Power and Works-could not have been by happenstance.   Adding the Housing portfolio to them would be rather excessive, if not over ambitious, but for the fact that it was pure genius.   The Office of the President had, with one stroke of the pen, recognized and corrected what previous administrations had been too blind to see.     Therein lies the masterstroke, not in the appointment of “an infrastructure junkie” to run the combined portfolios.   The appointment recognizes that electricity affords the government the greatest possible reach to its people beyond what any other governmental program could, and should be developed in coordination with other infrastructure needs and development.

Simply put, the Obasanjo and Jonathan’s administrations’ approach to electricity infrastructure development was the “field of dreams” approach: “If you build it, they will come”.     Hence, in the past, Nigeria had failed to plan for who will use the power infrastructure it was building and failed to even plan for evacuating the power to where ever it should be used; it did not know exactly where and for what specific “system” purposes each particular addition was intended as it was unplanned.   By collapsing the Ministry of Power with the Ministries of Works and Housing, Buhari is taking the tried and true approach of “how-Dubai-was-built”.   The small nation in the desert knew that in order to develop itself with the kind of infrastructure its funds could build, it would need more than the small population it had to justify it; so the camel-stop at the cross road of the great silk route “planned”: they planned to make the traders who transited through it since the ancient of days stay a while, and they gave Europeans a place to go in winter, closer than their usual destinations, and they gave corporations a tax haven, they gave students in neighboring countries great colleges, and everyone else a competing vacation stop.   Soon, there was no shortage of people to use their massive investment in infrastructure.

On a recent training workshop in Dar Es Salaam for Tanzania’s Regulatory Utilities on behalf of the National Association of Regulatory Utility Commissioners (NARUC) and the United States Agency for International Aid (USAID), I was asked to make a presentation on improving rural electrification and I modeled my presentation on the “how Dubai was built” approach, to explain that the problem of rural electrification was more a problem of “demand” than lack of “electricity” infrastructure.   When I traveled beyond Dar Es Salaam after the workshop, I realized how much the lack of other kinds of (Works) infrastructure undermined the demand that rural electricity requires.   Any attempt to grow rural electricity demand in Tanzania would require massive investment in roads, re-planning towns to facilitate movement by including loops, wider roads for easier and greater access, building facilities for emergency response and security units and improving information technology (IT) connectivity.   These are Ministry of Works responsibilities.

Similarly, effective electrification in Nigeria would bring about a degree of economic activity and population redistribution that would tax every Ministry of Works project known; adding to that   what Nigeria needs to address its housing deficiency, without understanding how the electrification driven “growth and economic activity” would impact sprawl and congestion, or planning to bring the new housing projects up to a standard consistent with progress in the electricity industry, would simply make a bad situation worse.

On the other hand, effective regulation offers the best opportunity to stimulate investments and pay for infrastructure development in Africa.   In a paper I presented earlier this year for the African Forum of Utility Regulators (AFUR) 12th Annual Conference in South Africa, I noted that African countries have the opportunity to further sustainable development through the penetration and reach of the electricity industry.

Using the example of the reach and impact of mobile phones, even in the poorest countries in Africa, we maintained that a similar penetration for the electricity industry would allow regulators to employ electricity surcharges to stimulate investments, build infrastructure and generally pay for sustainable development in ways that governments employ taxes. However, we warned that such a development would first require regulators to integrate information, communication and technology in their regulatory processes and decision making. Next it would require that regulators address the deficiencies in the quality of electricity service delivery through best practices in regulation that are open, transparent and well vetted by a broad range of stakeholders, especially ratepayers. We looked at some examples of best practices for both requirements at the California Public Utilities Commission[2].

Thus, the marriage of Power, Works and Housing in one portfolio is a stroke of genius, but it would only work in reality if Nigeria’s administrators do integrated resource plans in advance.   In 2012, while writing for AFUR Newsletter, I noted that Nigeria’s electricity administrators had lost the right to blame NEPA as an excuse for the moribund state of the electricity infrastructure in Nigeria, because these administrators had largely failed to plan.

Every Nigerian Power Minister since 1998 has blamed the problem of Nigeria’s electricity on NEPA’s failure to invest in infrastructure, but the 14 years since 1998 has been more than sufficient to improve the infrastructure NEPA neglected, at least by increasing delivery from about 4,000MW of delivered power to 6,000MW or even 10,000MW. Instead power delivery has gone down to 2,800MW, while authorities repeat the same excuse. NEPA’s failure to invest in infrastructure prior to 1998 cannot plausibly explain why thermal power plants that were authorized in 2005 were built without gas connections or why the nameplate capacity that NEPA left behind has only deteriorated. There must be a better reason.

What cripples Nigeria’s electric system is that Nigeria neglects to do integrated resource and procurement planning for the entire county’s demand and load not, as the Nigerian authorities have claimed, that NEPA failed to invest in the system.

Combining the portfolios of Power, Works and Housing also frees the Nigerian Electric Regulatory Commission (NERC) to regulate more effectively. In the past, it appeared administrators in the Ministry of Power and NERC did not fully understand their relationship with each other. As such, both agencies wasted useful resources in turf battles rather than working together. This includes the Ministry forming new parastatals that arguably fell under the statutory authority granted NERC and getting legislation for it. With the amount of work that needs to be done to bring affordable electricity to Nigeria, the last thing the sector needed was warring agencies. By combining the three portfolios, the Ministry would likely feel less threatened by the expansive scope of NERC’s regulatory authority, but might even welcome it as it would have its hands full in coordinating the regulation of electricity with its obligation under Works and Housing.

In sum, President Buhari’s appointment of former governor of Lagos State, Babatunde Fashola, as Minister of Power, Works and Housing, was a masterstroke, but unless administrators appreciate the reasons for that stroke of genius and work together to realize it, a great opportunity might be lost.

 

  • Hakeem Bello is the Special Adviser to Fashola on Communication

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