A country that cannot guarantee regular electricity supply to its citizens will remain grounded in the production and manufacturing sectors. What this means is that there will be stunted development. In a report by Premium Times online edition of October 8, 2015, Vice President Yemi Osinbajo addressing members of the manufacturing association of Nigeria (MAN) admonished them to brace up for electricity tariff increases.
The reason for this is as follows: “…at this point, if we wanted to have a cost effective tariff, the only way is to service the core value chain, the only way is to ensure that we are paying and compensating the core value chain – from generation down to distribution – a cost effective tariff”. He went further: “….losses on account of distribution are significant. In some, cases you have up to 40% losses in the distribution and of course it is the Discos that have to take that burden”.
The VP said nothing new, such views have been expressed by previous governments and if we follow the same pattern, we will still be faced with power challenge. The summary of the VP’s comment sums up thus, that a reasonable amount- 40%- is lost along the chain from the Gencos to the Discos. The losses have to be accounted for and in this instance, the consumers will bear the brunt.
The question is: why should consumers bear the cost of the inefficiencies or mismanagement of the electricity companies? When consumers pay, will it stop the waste? The Discos just have to re-invent themselves and apply the correct solutions. I do not think that up to 40% of electricity consumers pay their bills, especially along the borderline towns and rural areas. So, what is responsible for this?
If you cannot make certain categories of consumers pay electricity bills, do you have to make those who pay, suffer by paying more? This is what will happen if the Discos decide to increase tariffs now. If billions of naira is lost through this process, we must first plug the loop holes.
Too many tariffs can also hurt production, especially if the service is not steady and regular. The point is clear, provide the people with uninterrupted power supply and see the reactions. It must follow that order – provide service before price increase, else, it will fail and serve no purpose than to produce a very disgruntled customer base, which is not good for business.
We have all witnessed the success in the communication sector, when it started, not everyone could afford a GSM line and those who had it enjoyedthe services, which further attracted others. With the increased number of service providers and subscribers, the prices nose dived. We must also not forget the huge investments made by the service providers, that is the way to do it – service first.
The most important challenge in the power sector is the inability to generate steady supplies to consumers. There must be no interruptions, if this is accomplished, people can now concentrate on ensuring the maintenance of a steady flow by paying up their bills as at when due. You cannot ask people to pay for services not rendered, covering up for the lapses with estimated bills.
If we have taken the privatisation and commercialisation of the power sector seriously, we will not be talking about estimated billings by now. It is over two years that the power sector was handed over to private hands; it is no longer a social responsibility of the government. These companies applied under a competitive bidding atmosphere with proofs of their ability to deliver electricity to the people in line with normal terms of business but two years down the line, we are still battling with the NEPA/PHCN stuff.
It is now strictly a business matter and in business, you have to cope with the initial starting costs associated with teething problems. The early years should not be focused on making profit alone but providing services and building the confidence of the customers. You will have to sow before you reap. The staff, management and owners of the new power companies are still suffering from the hangover of the previous regime of government ownership, the government way of doing things, the lackadaisical attitude to government business.
They need to change their ways, they should realise that it is no more business as usual. If they want to earn the consumers respect and confidence, they have to work for it and not hide under the government over bearing cover. It is only the quality of service they provide that will determine consumer’s response. Some people have simply refused to pay their electricity bills because they are dissatisfied with the quality of service provided and the staff of these Discos even fear to visit such areas for payment compliance.
The ball is in their court, there must be fresh orientation for staff, training and re-training on how to satisfy the customers and most importantly; professionalise their technicians, most of them are still in the ‘cut and nail’ categories, mere artisans.
The Vanguard Newspaper of October13, 2015 reported an agreement reached between the Federal government and OEM TE connectivity to conduct trainings for power companies’ staff through the national training institute. This is more like it, but in the case I am proposing, the initiative must come from the power companies and not the ‘father Christmas’ federal government. Power has been privatised in Nigeria, it should be run like a truly commercialised and profit oriented company, no underhand dealings and no cheating of the customers.
In the business world, the assumption is that the customer is always right, that should be the focus of our electricity power generating companies. In vigorously trying to find solutions to customers’ demands, they will sort out the electricity challenges of the nation.
They should hold on to the buck and not pass it to the consumers.
This article was originally published on Vanguard.