Nigeria’s Power Privatization is an Economic Dead-end
The continuation of: Nigeria’s Power Privatization is an Economic Dead-end
The social and economic consequence of privatization can only be imagined. For instance, many private businesses will collapse based on hiked cost of power leading to further job losses. This is aside the high cost of living that hiked tariff will mean for teeming millions of working class and poor families, and small business owners. On the contrary, the supposed money to be saved by the state will not trickle down to the poor people, as hundreds of billion dollars amassed by the country from fossil fuel sale have not meant improved living for the working and poor people. This will lead to rise in poverty rate, which will further drive down any effort at developing the economy. Added to this is frustration and social tension this will generate, as unemployment will be rifer.
Even for those that will be able to access the electricity, it can only mean more quagmires. For example, unlike in the telecom sector where you can switch from one service provider to another, if the customer services including repairs are poor; in the power sector privatization, each private owner of the generating and distributing companies will be the local monopoly (or at best all of them forming an oligopoly), with no right to choose, which is against the much-touted free market ideology. With this, consumers are trapped, as the government and the society will be at the mercies of these monopolies; even far worse than what is currently witnessed in the telecommunication sector, where options even exist.
Moreover, under privatization, supply will be decentralized, so you may not even know the company supplying you (whether the distributing, transmission or generating companies), and if you know, the process of complaining will be too cumbersome. This will give easy excuses for these private companies to shirk their responsibilities, even with the existence of regulator. For instance, despite billions being ripped off from Nigerians by telecom service providers, the Nigerian Communication Commission (NCC) that regulate their activities only take actions that are at best a slap in the wrist for these telecom companies, which rather than curtailing the frauds only whitewash them. This is because these frauds have been institutionalized with the privatization itself.
Labour Movement Responses
These realities should be related to Nigerians by the leaderships of electricity workers’ unions and labour centres, instead of limiting the demands to disengagement entitlement alone. It is only when electricity workers oppose privatization on a principled basis that they can win any concession. Indeed, privatization, with its attendant mass retrenchment will not only lead to suffering for thousands of working class families, but will further lead to problem of manpower in the power sector.
Already, there are huge shortfalls of technical staff for the power plants in the country, which can only be resolved by massive government investment in building capacity, based on long-term plans. However, on the basis of private ownership, this can be used to limit cost of operation, as the fewer the workers, the lower the cost of operation, and consequently, the higher the rate of profit. Even when the private investors employ more workers, it will not be with the aim of long-term development of neither the sector nor the country; but to ensure continuous operation to gain more profits. Thus, when there is shortfall in profit, the reverse policy will operate – retrenchment.
Unfortunately, the labour leaders believe that there is nothing fundamentally wrong in privatization, inasmuch as the process is transparent. Of course, the in-house unions in the sector opposed privatization initially, and even committed themselves to organizing against it; because of lack of clear-cut alternative needed and lack of consistent approach to resist the policy, they settled for collecting entitlements of their disengaged members!
However, the biggest obstacle to defeating privatization of the power sector itself came from the leadership of the central labour unions – NLC and TUC. Despite the enormous potential to mobilize the working people to defeat this fraud, the leaderships undertook a piecemeal policy of defending only the severance disengagement of electricity workers. From the start, the central labour leaders did not oppose privatization of PHCN. Indeed, in its several positions, it was building false hope in privatization.
For instance, at the Senate hearing to review privatization last year, the vice president of the NLC, Issa Aremu was quoted to have openly supported privatization and even defended private buyers, even when over 80 percent of privatized firms were officially declared as failure. Moreover, the NLC president himself was quoted in a recent conference of one of the NLC’s affiliate unions, that the labour movement traded its opposition to privatization of PHCN for the payment of the entitlement of electricity workers!
This reflects the fact that the labour leadership is not opposed in principle to privatization and its accompanying fraud. This is not unexpected as the labour movement itself is a ‘stakeholder’ (according to the NLC) in the privatization process, having membership in the National Council on Privatization (NCP)! All this exposes the pro-capitalist orientation of the labour leaders. Only a revolutionary leadership of working class can lead a successful campaign and opposition against privatization.
The failure of the electricity workers’ unions to organized mass actions and popular enlightenments and campaigns against hike in tariff, looting in the power sector, collapse of infrastructures, among other made many Nigerians to believe that their current struggle is aimed at their members’ interests alone. This is even coming at a time when electricity workers are seen as part of the failure of the power sector, which the government even used as propaganda against the electricity workers to force privatization down their throats.
Of course, there is some corrupt tendency within the corporation’s workforce just like in every facet of the polity, which is condemnable and inexcusable as it seeks to resolve societal problem individualistically. But this, aside being just a drop in the ocean of gargantuan corruption at the top echelon of the decision-making structures, is a product of mismanagement and corruption at the top echelon of government, which only percolate the lower rung of the ladder.
For instance, in the past five years, over N4 billion has been budgeted for fueling and servicing generators by federal government. The contracts for this obviously bizarre arrangement are not given to workers but members of the ruling class. The members of the ruling class are the ones gaining from the rots in the power sector and its privatization as analyzed earlier, not workers. More important is the fact that most Nigerians do not know that there are thousands of workers in installations, transmissions, etc, who you hardly see but spent hours they should be spending with their families to improvise on the rotten cum dilapidated facilities in order to provide the little electricity we currently ‘enjoy’.
Therefore, only through a well-coordinated, organized campaigns and mass actions, along with central labour unions, and other sister unions and pro-labour organizations, can the privatization fraud be defeated. The possibility of victory against privatization is shown in the little industrial actions taken by electricity workers, which stampeded the privatization for several months. Had the labour movement stepped this up in a more organized manner, at least with the same energy committed to the struggle against fuel prices hike, surely Nigerian government would have been forced to make a u-turn.
For Democratic Public Ownership, Control and Management
While we recognize the current failure of PHCN to function and provide electricity for Nigerians, we hold that this is a product of the deliberate rundown of the corporation by major politicians and big businesses. While PHCN (NEPA before it), was funded from public resources, its management and running were already privatized, as those who were bureaucratically appointed to run it, only use it to serve the interests of their patrons in politics and big businesses. This undemocratic and corrupt management of PHCN is the main reason for its collapse, and indeed collapse of many public owned entities.
Therefore, in place of privatization, working class movement should demand for public ownership of the power sector under democratic control of workers, communities and consumers. This is a clear alternative to the current corrupt arrangement where running of the power sector is put in the hands of political patrons and big business people, who use the sector to advance their profit interests and those of their business partners. This will mean putting running of PHCN facilities and resources, including funds under democratic control, scrutiny and planning of workers and consumers in communities.
Working people must also demand for the immediate arrest and prosecution of looters of power sector funds, and public takeover of private companies (including banks) involved in the monumental frauds and looting. Such companies should be put under the direct democratic control and management of the workers in such companies, and elected representatives of host communities, consumers, etc.
With democratic control from grassroots to the national level, PHCN, and of course, other public entities can be made to serve the country effectively. Public ownership also means economic development can be properly planned with power being made an integral part of this. For instance, based on democratic planning, we can determine how much electric power we need to sustain development of other sectors of the economy – steel, manufacturing, social services, etc. From this, the resources needed for an integrated development of the power sector can then be democratically drawn out.
In the power sector, with public ownership, it can be possible to determine how many graduates, technicians and technologists are needed, and this can be integrated into the education policy. By mobilizing the huge mineral wealth of the country, and recouping looted funds, Nigeria can conveniently provide universal access to electricity to every Nigerian, and provide adequate electricity to power massive economic and social development.
For instance, the N3 trillion of public funds used to bail out handful of bankers will provide more than 30 percent of what is needed to provide universal access. Indeed, just 6.7 percent of the oil wealth in the past ten years will conveniently provide electricity for all Nigerians. But this will mean blocking all the major loopholes from which corrupt politicians, their big business partners and multinational corporation loot the enormous resources of the country. It will mean putting the mainstay of the economy under democratic public ownership.
For example, instead of spending public fund to bail out private banks, such banks and the businesses of their fraudulent debtors can be nationalized. From this, the economy can be mobilized to resolve the immediate needs of the country – power generation, infrastructural development, massive support for small businesses, etc. This is the surest means of making electricity serve the people, and not vice versa.
The bankruptcy of the Nigerian political class in the privatization process is not accidental, but a product of the inability of capitalism to move society forward. All the highlighted democratic planning and ownership of the power sector can never be implemented by the current set of politicians in power, as they are merely the political section of the neo-colonial, neo-liberal capitalist class in Nigeria, representing global imperialist capitalism. This is clearly reflected in every facet of Nigerian economy and polity. Despite over $900 billion, realized from crude oil in the past ten years, Nigeria has remained a backward outpost of capitalism, with more than 70 percent living in penury while over 50 percent of the educated youth population is unemployed.
Education, health, mass housing are still inaccessible to vast majority of the population, while millions are malnourished and starving. Only a democratic socialist government that is built on the foundation of revolutionary movements of the working and oppressed people can develop the power sector as part of the integrated development of the economy, society and humanity as a whole. Therefore, a genuine working class leadership will see the need to link the opposition to privatization with to the political alternative of the working masses.
This will mean that the labour movement will see the need to build a political party of the working people with clear democratic, revolutionary socialist programmes of public and democratic ownership of the mainstay of the economy, and massive investment in social and public infrastructures and services (education, health, housing, food, etc). This is the ultimate alternative for the working people. It is unfortunate that the Labour Party, established by a section of the labour leadership, has been handed over to clearly bourgeois politicians and big business people, who are using it to feather their own political and economic and political nests. The party has now become the dumping ground for all manners of politicians, who fail to get power in traditional bourgeois parties. More ridiculous is the fact that the labour leadership, have continued to mobilize for these politicians, using workers name, and mobilizing workers under the banner of these capitalist politicians a la Mimiko. With this direction, the Labour Party cannot develop ideological and political programmes to capture and oppose anti-poor policies.
Working people must demand for the immediate rebuilding of a genuine working people’s party based on clearly anti-capitalist, revolutionary programmes and ideas. Such a party, built as a fighting platform of the oppressed, will easily become a pole of attraction for millions of working class people and youths who are seeking political alternative to the rot created by capitalist politicians. Only a party built as a fortress of mass struggle against all capitalist anti-poor policies can provide genuine alternative to the rot symbolized by all capitalist political parties in Nigeria today.
Ile-Ife, Osun State Nigeria
1. Ibrahim K, Minimum Wage Struggle in Nigeria, Unpublished, 2012
2. Punch, Wednesday, 26/09/2012, pg 2, ‘FG to sell power firms to Elumelu, Otedola, Others’
3. Businessday, Wednesday, 17/10/2012, pg 1, ‘Nigeria crosses major hurdle in quest for power…’
4. Hall D. 2010, Public Disaster and Private Gain, PSIRU, University of Greenwich
5. Vanguard, SweetCrude Report, 10/09/2012, Nigeria spends $8 billion on NIPP
6. WEO 2010: Chapter 8 “Energy poverty – How to make modern energy access universal?” http://www.iea.org/weo/docs/weo2010/weo2010_poverty.pdf
7. Hall D. 2007 Electrifying Africa, , PSIRU, University of Greenwich