Fresh Insights into the Power Sector -- Ronke Adewale-Johnson

By C.Don Adinuba
“It’s an unfathomable paradox”, ruefully stated the woman sitting next to me at the discussion segment of the three-day Energy Summit at the Landmark Events Centre when the 2024 annual conference started on Tuesday, October 15, “that a country so blessed with brilliant and talented persons could be in the present development morass”. The lady, in her early 30s and from one of the largest commercial law firms in the country, was impressed, like the rest of the considerable audience, at the presentations of executives of different power generation firms in the country. The discussants were Meyen Etukudo, the CEO of Ibom Power; Edu Okeke, CEO of Azura Power Ltd; Oti Ikomi, Vice Chairman & CEO of Proton Energy Africa; and two amazons, Mrs Atinuke Taiwo, Executive Director and General Counsel of Mainstream Solutions Ltd, and Mrs Agatha Nnaji, Group Managing Director of Geometric Power.
Mrs Nnaji received the most sustained applause each time she spoke. Each time, she provided a new, totally refreshing insight into the electric power sector. The first insight is the imperative of aligning interests between public servants and entrepreneurs in the power sector. The second is the revelation that her Geometric Power firm has been operating effectively without government subsidies, in contrast to the case with other power generation and distribution firms in Nigeria.
She believes that Nigeria will remain in the woods unless there is a new culture and mindset in the public servants, including civil servants who run agencies dealing with the sector.
Nnaji argued that if civil servants, for instance, continue to earn their salaries and benefits regardless of their performance, it would be difficult for the country to make a dent in the electricity sector. She wants civil servants to be incentivized so as to develop an entrepreneurial spirit that will benefit them and the nation.
Nigerian top officials and civil servants need to learn a lesson from China in this respect. China has five government tiers, stretching from over 40,000 townships to 2,800 counties to 333 municipalities to 31 province-level regions and the national administration. One critical criterion for promoting a person from one layer to another is the number and size of investments attracted to a person’s area within a given period.
In a well-circulated article entitled “What the West Misunderstands about Power in China” and published in the influential thought magazine, Noema magazine, on November 10, 2023, Xiao Ma of Peking University wrote: “The desire to reach higher positions generates incentives for local officials to reach and balance goals such as promoting growth, attracting investment, preserving the environment, and maintaining social stability.
“Local leaders have to be entrepreneurial to outperform their equally motivated peers in local development. Some resort to policy experiments, transforming the local bureaucracy to make it more amicable to residents and outside investors; others lobby their superiors, in particular those in the central government, for additional policy handouts.”
In a popular book published in the United States in 2009 entitled The China Strategy: Harnessing the Power of the World’s Fastest-growing Economy, Edward Tse, an investment consultant based in Hong Kong who writes for Harvard Business Review, notes on page 10 that the amazing success of Chinese new cities and towns owes to officials who govern them in a way to “attract as much business as they can.”
On page 18 of the book, Tse, who notes the immense patriotism in all Chinese officials, continues: “They have taken on responsibilities beyond their job description, acting as the guiding hand in the creation of China as a world-leading country. Their interests extend beyond self-enrichment to the creation of national wealth and pride. This has been the motive behind building up the infrastructure necessary to economic development. It also means a long-term commitment to ensuring incremental development, as well as a willingness to experiment and collaborate across government agencies and with the private sector.”
What led Mrs. Nnaji to call for a new culture and mindset in the public agencies dealing with the power sector was a question from the moderator of her session on power generation and sustainability. The moderator, Nicholas Okafor of Belo-Osagie and Udo Udoma law firm wondered how the Geometric Power group, comprising the 188-megawatt Geometric Plant in Aba, Abia State, and the embedded Aba Power distributing firm, Nigeria’s 12th distribution power company, was able to survive despite being in limbo for 20 years as a result of deliberate man-made obstacles before it was eventually commissioned last February 26 by Vice President Kashim Shettima.
While the other electricity generation and distribution companies have been lamenting that the Federal Government, which has paid over  N7 trillion  to them since their privatization in 2013 as subsidy, is still owing them so much money, the Geometric Power group has not received a kobo from any person as subsidy. More incredibly, the Geometric Power group it is not expecting any because it is designed to operate with no such support.
No wonder, the Minister of Power, Chief Adebayo Adelabu, has been saying that the Federal Government is studying the Geometric Power model intending to replicate it in other parts of Nigeria. The minister says that the DisCos cover very wide territories which makes efficient management difficult, citing the example of the Ibadan DisCo that services industries in Ogun State and places in Oyo, Ondo, Osun, and even Kwara states. In contrast, Aba Power serves only nine local government areas in Abia State, making it efficient to manage.
But the more important point about Geometric Power operations, as Mrs. Nnaji revealed, is that it is Nigeria’s foremost power-integrated group, that is, it generates its own power and sells it to itself for a dedicated or niche market.  Other electricity companies in Nigeria are either power generation firms or electricity distributing ones. Therefore, when other GenCos complain of not being paid by DisCos after supplying them electricity, Geometric Power doesn’t complain because Aba Power does not owe it.
As Dr Shamsudeen Usman, the former Minister of Economic Planning, revealed recently, most of the 11 DisCos privatized in 2013 were hijacked by extremely greedy people in the Federal Government and their agents. They are today’s in a big mess. They are perhaps the weakest link in the country’s electricity value chain. The Federal Government, which still retains a 40% stake in them, should consider selling them to GenCos willing to purchase them. There is no future for eight of the 12 DisCos in Nigeria. There is a limit to how long the Federal Government can subsidize them.

Dr (Mrs) Adewala-Johnson is a business consultant in Lagos.