Let me begin by explaining a personal dilemma. Since the conclusion of the March 28th Presidential and National Assembly elections and the trumping defeat handed to the outgoing ruling [some, among them myself, will say ruining] party, by the now incoming self-styled ‘governing party’; a victory resoundingly confirmed in the subsequent State level elections two weeks later; I have tried my possible best to refrain from critiquing the continuing mis-governance of the incumbent government.
I had felt, and still feel that there would be no use literally flogging a dead horse! Nevertheless the deepening crisis of bad governance and the rapid unraveling of the transformation agenda in the last few weeks compel one to speak. And to speak out loudly not so much because one loves to dissipate energy flogging a dead horse, but in order that in-coming horse can hopefully take a different path and avoid the fate of the now over flogged dead horse.
In the few weeks since the general elections were won and lost our nation has been thrown from pillar to post, pilloried by the intensified storms of adversity. It is as if the nation is now running on auto-pilot, as if there is no government in place! The situation has been so bad, and is still deteriorating so steeply that many citizens have wondered what would be left of this nation and her people were the PDP and the outgoing regime to have won another four years mandate.
How did we get to this sorry state? In the twilight of the sixteen years of the PDP inclusive of six years of the GEJ presidency, on virtually all major critical fronts we are back to where we took off from in 1999 at the inception of the 4th Republic. And in some significant instances we have been taken even beyond the low levels of 1999.
It is that bad. Take for instance the argument over the national debt profile. The in-coming government says it will be inheriting a $60bn debt portfolio. The out-going government through its de-facto Prime Minister and coordinating minister of the economy comes out to say the debt stock is actually $63bn, but it is infact the total debt stock since independence in 1960, and furthermore, the GEJ government incurred only $21bn of that stock.
Now this is amazing coming from the same person whose claim to fame and economic wizardry lies in the fact that she successfully negotiated the pay off and write off of our national debt before 2006. In fact as a result of that deal we paid up in cash and at once $12bn in exchange for the forgiveness and write-off of the remaining $18bn.
So how come this current debt stock is the total debt stock from independence? And regardless of whether this current total debt stock is since independence or post debt forgiveness and therefore since 2007; the fact that the GEJ administration is responsible for $21bn of the $63bn is very significant. The implication of these is that if it was from 1960, the GEJ regime alone accumulated over 33% of the total debt; that is in 6 years out of a total of 55 years since independence.
Whichever way you look at it, it is another one of the indicators of the level of wanton profligacy of the Jonathan administration.
Secondly, we all now fully know that under the watch of this administration and as a further since of its congenital profligate nature we exhausted both our external reserves which came down from over $60bn in 2007 to less than $30bn by 2014; as well as our Excess Crude Account, which came down from $10bn as at Dec 2013 to below $2bn as at January 2015 for instance.
Now the case of the Excess Crude Account is even more worrisome. This is the account created to save for the raining days proceeds from sale of crude oil above the Benchmark in the annual budget. So let us do some mathematics. In the Jonathan years, for at least 5 of those 6 years crude oil sold for not less than $110 per barrel, whereas the annual benchmark never exceeded $80 per barrel.
The implication of this is if we assume a daily sales of an average of 1.5 million barrels of crude oil, over 300 days a year, over 5 years; and multiply this by an average daily excess of $30 per barrel, the total amount of money we get should be what is the total inflow into the Excess Crude Account throughout the Jonathan years. [1.5 (million barrels) multiplied by 360 (days) multiplied by 5 (years) multiplied by $30 = $81bn].
What does this mean in concrete terms? It means that as at May 2014 the total in flow into the Excess Crude Account out to have been $81bn, but what was in fact in that account as of that date was about $7bn which had been drawn down to $3bn by Dec of that same year, and which is now less than $2bn since then. I will leave us to make our own deductions with respect to the profligate and rapacious treasury looting capacity of this regime in particular and the entire ruling class in general given that this money was shared and looted by all the tiers of the government in contravention of relevant laws over these several years.
And because both the outgoing and incoming ruling parties participated in varying degrees in this dance of the insane, that is why we must take this promised change with a large dose of cautious optimism backed by eternal vigilance.
Let us now shift our focus to the combined energy crisis that has shut down the country and put her people in a state of National lock down.
At the inception of the 4th Republic in May 1999 the PDP inherited actual and available power generation capacity of about 2,500mw, and a national grid transmission capacity of about 4,000mw. Well 16 years down the line and after spending $40bn on investments in power generation, along with the unbundling of PHCN and the privatization of the power sector; what do we have?
As of May 22nd total available and transmitted power was down to 1,400mw. Additionally we have also witnessed a total and comprehensive collapse of the national grid.
According to NERC of the 23 power plants across the country 18 had to shut down completely and were not generating any power at all. These was due to a combination of reasons including ageing and increasing dilapidation of the transmission and national grid facilities, as well as inadequate [due to pipelines vandalisation] or non-availability of gas supply [due to workers strikes in the sector].
A number of issues are cogent here. First the grand scale and scope of corruption in the power sector reform process that has ensured that after injection of $40bn into increasing power generation, the result is that today all of the power plants, including independent power projects cannot generate more than a combined 6,000 to 8,000mw. The same level of corruption has ensured that the Gencos and Discos were fraudulently sold to and bought by cronies who had no technical expertise in power generation or distribution, and who took loans from our banks to effect payments for the fraudulent bids they made and won.
Another related issue is the parlous state of the transmission capacity and national grid. This national grid has not undergone any significant upgrading or refurbishment in three decades. And all the inchoate and frenzied attempts over the last decade or so to overload the grid with generated power has only further led to the weakening of the integrity of the grid, and rapid decline in its transmission capacity. This was a major reason to trigger the last collapse of the national grid which was triggered when a load of a mere 1,900mw was going to put and transmitted on it.
In fact over the last 5 years we have witnessed on the average 18 to 20 system collapses annually, with 80% of this being total collapses.
This lack of upgrade or maintenance of the national grid is responsible for the situation of frequent failures and collapses; and the consequent incremental decline in its transmission capacity is why even if all the power generation projects and plants were completed and working at full capacity and generating say 10,000 to 20,000mw combined today, it would still be impossible to evacuate and transmit the generated power and there will be no improvement in the power situation overall.
It takes a combination of three interrelated factors to achieve sustainable improvement in the power sector: adequate generation capacity which for the size of our economy ought to be at least over 30,000mw; adequate transmission capacity, which for a generation capacity of 30,000mw ought to be at least about 35,000mw; as well as robust distribution infrastructure.
As usual blinded by corruption, powered by impunity, we have placed the cart before the horse, and have developed a power transformation road map that is imbalanced and irrational; over focusing on power generation, eager to reap distribution booties without any thought at all for transmission and how to evacuate the generated power.
Relatedly also, why depend on gas fired power plants when you cannot guarantee gas supplies to the plants? And instead of establishing specialized trained units of the armed forces to undertake pipelines protection and the protection of other critical national infrastructure, the Jonathan presidency decides to outsource this critical national duty in lucrative seedy contracts to cronies, ex-militant generals and militia warlords.
And now the other leg of the energy crisis, the fuel scarcity saga. The near shut down of the economy occasioned by non-availability, scarcity and outrageous black market pricing for PMS, Diesel, and Aviation fuel is the most significant evidence that buttresses our point that due to the parlous state of power generation and availability in the country, petroleum products to power generators and the transportation system have unwittingly become transformed into factors, and in fact major factors of production, rather than consumption.
The high cost of fuel, and the near total dependent of citizens on independent self-generated power through generators for business, industrial and domestic use is a major contributant to the high cost of doing business in Nigeria, and the abysmally low levels of industrial capacity utilization. It is why businesses close down, reduce their operations and lay off of workers; and it is therefore a major factor in growing unemployment in the nation.
And corruption and impunity that drives it is the major reason why our refineries are not working and why we are dependent on importation of refined petroleum products to meet our domestic needs by more than 90%. In fact we are the only OPEC member country to be this totally dependent on imported refined petroleum products. Across OPEC, the average figure is that 80% of domestic needs in refined products are met through domestic refining; the near exact opposite of our own situation.
Let me illustrate the pervasive corruption; for instance in 2010 the nation paid subsidy on 33 million litres per day of petrol; however this figure irrationally short up to 60 million litres per day in 2011, and came down again after the outcry occasioned by the January Uprising of 2012 to 40 million litres per day in 2012, and 38 million litres per day in 2013. Similarly number of importers short up unexplainably from less than 60 in 2010 to 170 in 2011, and came down again to about 70 in 2012.
The fact is that these figures came down and yet no one was punished; not the marketers, nor the different officials of the respective MDAs who enabled this to happen, nor the political office holders who super intended over these sordid affairs.
We have said before, and we need to reiterate it, we have no business importing refined products. We need to quickly develop adequate domestic refining capacity and identify and severely punish economic saboteurs and criminals responsible for the failure of our refineries and abusing the subsidy regime. The proceeds of crime should also be seized along with recovery of looted funds.
In the interim, it is possible and desirable to do away with the subsidy regime without increasing prices. The best to do this is to negotiate crude for refined products swap deals utilizing the 444,000 barrels per day of crude allocated for domestic consumption.
To conclude, after 16 years of the 4th Republic, we are in the midst our worst economic crisis for decades; we have found ourselves right at the center of a combined energy crisis, with fuel scarcity combining to deepened an already bad power situation to produce a near shut down of the economy and a lock down of its citizens.
The unfolding crisis of absent governance of the last six weeks is turning out to be a sad commentary on 16 years of PDP stewardship of the economy and an epitaph on the years of the locusts.
The in-coming government and ruling party will do well to learn the appropriate lessons; otherwise the same fate shall befall it, and this time much quicker than the last time.
JAYE GASKIA IS NATIONAL COORDINATOR OF PROTEST TO POWER MOVEMENT [P2PM].
