The Federal Government on Thursday said it would carry out detailed forensic audit of the accounts of power distribution companies (DisCos) following dissatisfaction with reported claims of the current level of investments in the electricity sector.
The aim, the government said, is to enable it know how much has been invested in the power sector so far by all the various stakeholders since the 2013 power privatisation exercise.
The Federal Government also directed all the state governments to furnish it with total investments they have committed into the power sector so far.
Philip Shaibu, deputy governor of Edo State, disclosed this while briefing State House correspondents after the monthly meeting of the National Economic Council (NEC), a body comprising the Federal Government and governments of the 36 states of the federation, in Abuja.
“I think the Federal Government is trying to take the bull by the horn by trying to find out what investments these DisCos made towards this privatisation. The first suspicion is that they have made no substantial investment and we will take it when we get all the solutions,” Shaibu said.
Ayodele Oni, energy lawyer at Bloomfield law practice, said the move by Federal Government is legal and that the Companies and Allied Matters Act (CAMA) requires public companies like the DisCos to have annual audited account which must be publicly available.
“It’s not outside the contractual, legal and regulatory framework for government to order forensic audits of DisCos for further checks and balance provided it’s done by experts without political interference,” Oni told BusinessDay.
Oni however, raised questions or doubt about government fulfilling its own contractual obligation or promises it made to the DisCos in terms of improving the grids, or putting structures in place for tariff that are cost-reflective.
“If DisCos’ lack of performance is based on government not fulfilling its own side of the contract obligation, then they might have a case if they choose to go to court,” Oni said.
Shaibu at the briefing said state governments were also directed to furnish the NEC committee headed by Kaduna State Governor Nasir el-Rufai the total investments of each state before the end of March.
“The committee requested for additional two months to enable it to complete its assignment,” Shaibu said. “Of course, nobody is happy with the DisCos’ performance and we have a committee chaired by the governor of Kaduna state and they have done very beautiful job.”
Already, the NEC committee headed by El-Rufai has placed advertisements in about five newspapers and has asked the general public to give it information on the performance of the DisCos and also investments made by individuals and the private sector.
BusinessDay gathered that Association of Nigeria Electricity Distributors (ANED), an umbrella body of the DisCos, which is currently engaged in negotiations with the Federal Government, is requesting $10 billion within the next five years.
All efforts to get reactions from Sunday Oduntan, ANED’s executive director of research and advocacy, proved abortive as calls and messages were not responded to as at the time of filing this report.
But the Nigerian public and especially the business community are not excited about the power supply situation. Some have called for a holistic reform of the sector.
“Power supply has consistently lagged behind the pace of economic activities and population growth,” Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), said.
“This development impacted negatively on investment over the past few decades with increased expenditure on diesel and petrol by enterprises. This also comes with the consequences of declining productivity and competitiveness,” Yusuf said.
The new move on forensic audit is coming just one week after Nigeria’s Minister of Power Saleh Mamman threatened to dump the DisCos over epileptic power supply, blaming current situation on their inability to distribute stranded power.
“Nigeria currently generates 13,000MW of electricity, it transmits 7,000MW to DisCos while the distribution companies can only distribute 3,000MW to end users,” Sale told reporters. But responding to the claim, ANED argued that the statement by Saleh was untrue, saying the quantum of power that DisCos supply to their customers is based on the allocation they get from the TCN. It said TCN wheels a mere 4,303MW supplied to consumers.
The association restated that its members have till date not received a kobo from the Federal Government as subsidy. It reminded the government that even though DisCos’ liabilities to Nigerian Electricity Supply Industry (NESI) is N81 billion, ministries, departments and agencies (MDAs) owe them to the tune of N100 billion.
TONY AILEMEN (Abuja) & DIPO OLADEHINDE (Lagos)
