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Greg Clark at a factory that manufactures wind turbines that generate electricity from wind. About 30% of the UK's electricity comes from renewable sources.

Greg Clark, the UK’s business and energy minister, nails why Nigeria isn’t making progress

23 November 2018

Greg Clark, the UK’s Secretary of State for Business and Energy, made an important speech on the future of the energy market on 15 November.  He called the speech “After the trilemma – 4 principles for the power sector”.

The “trilemma” in the UK refers to the government policy objectives in the power sector of security of supply, affordability and energy from renewable sources.

Clark was not referring to Nigeria, but he could well have been when he said: “First, my view is that energy is special. The economic and social consequences of anything going seriously wrong with our energy infrastructure has impacts that go a long way beyond what is captured in everyday bilateral contracts between parties – it involves complex externalities. For example, imagine the country that developed a reputation for being a place where you can’t rely on the power supply. This was a reputation that Britain once has: many of us here remember the 3-day weeks of the winter of the 1970s. The world’s big manufacturers, service companies and finance houses would think twice about establishing themselves in any country that could not be confident that its capacity was secure. The whole economy builds on the foundations of secure, low cost energy – that is just what talking about ‘infrastructure’ means.”

Nigerians don’t need to imagine as Clark said, they know all too well about the economic and social consequences of an energy infrastructure that is not fit for purpose.  The country has developed a reputation for being a place where you can’t rely on the power supply.  As a result, very few major investors are in a hurry to set up in Nigeria.  The bulk of the foreign investment in Nigeria is in oil and gas.  With secure, reliable and low cost energy being the main drivers of economic growth, it should come as no surprise that Nigeria’s economy is comatose and Nigerians can point at failure to keep the lights on as a significant factor.  The cost of doing business in Nigeria is very high because you have to factor in significant investment in generators and diesel.

Billions of dollars have disappeared in the Nigerian “Bermuda Triangle” of power projects with little improvement.  The government has tried the British privatisation model and this has also failed for the same reasons that public ownership failed – chronic corruption.  Power minister Babatunde Fashola has also expended a lot of hot air and his only achievement so far has been being lampooned on social media as the “minister of darkness”.

Fashola has continued down the privatisation path that delivered little results for Nigerian electricity consumers, keeping faith with Benjamin Franklin’s definition of insanity – doing the same things and expecting a different result.

Joe Ajaero, general secretary of the National Union of Electricity Employees claimed that the privatisation of power supply in Nigeria was a fraud. The fraud included handing over 200bn naira (about $1bn) of public funds to the private sector.  More information on why power privatisation in Nigeria is inherently flawed and crippled at birth can be found in the article below.

Privatisation of PHCN is fraud – electricity union

As Fashola continues to recycle failure in the power sector, Greg Clark’s intervention should remind Nigerians why genuine economic growth will continue to be a pipe dream.  No number of attempts to woo investors would change that reality.

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