The Nation Newspaper

Tag: Protecting

  • Protecting electricity consumers’ right under the law

    On May 15, last year, the Nigeria Electricity Regulatory Commission (NERC) announced that it had received directives from the Minister of Power, Works and Housing Mr Babatunde Fashola, declaring categories of eligible customers pursuant to Section 27 of the Electric Power Sector Reform Act 2005 (EPSR).

    This announcement has received applause in some quarters as the panacea to the lingering power problems in the country.

    The substance of the Minister’s declaration is to the effect that certain categories of consumers were now free to purchase power directly from the generation companies without going through the distribution companies. The classes of eligible consumers are listed below:

    • A group of end-user customers registered with NERC with monthly consumption above 2MW and connected to a metered 11KV or 33KV delivery point on the distribution network of an electricity distribution company;
    • End-user customers with monthly consumption above 2MW and connected at 132KV or 330KV on the transmission network;
    • End-user customers with consumption above 2MW and connected at 33KV on the transmission network;
    • End-user customers with consumption above 2MW and who are located near a GENCO or generation facility.

    The purpose of the directive as explained in the NERC advertorial is that it “is expected to bring into play new and stranded generation capacities which may be contracted between generation companies and eligible customers”.

    There are several issues that arise from this policy directive. What is it intended to achieve? How will it help resolve the problems currently facing the power sector? Does this enable the creation of an electricity market or only does it help to destabilise it?

    The EPSR Act has over the years been bedeviled with misinterpretation of some of the core concepts of the Reform leading to unintended outcomes that have generally impeded the success of the reform programme. The premature declaration of eligible customers once more showcases this problem. Before I go into the details, there are some questions that are burning for an answer.

    1. Did the policymakers acquaint themselves with the market design and structure before making this declaration?
    2. Did anyone reference the Power Policy document in other to understand the intendment of section 27 of EPSR?
    3. Were Sections 24, 25 and 26 of the EPSR Act reviewed or considered before the directivewas issued?
    4. What is the purpose of declaring eligible customers?

    The Nigerian Electricity Supply Industry (NESI)was designed as a three-stage market comprising the Transitional Market, Medium Term and Long Term. The differentiation of the market stages is tied to the level of development of the wholesale electricity market.

     Transitional stage

    The Transitional Stage is characterised mainly as competition for the Market (competition in the procurement or entry of new generation). The Electricity Market is open to competition for new generation entry and dispatch.  Optionally, some large customers connected directly to transmission may be authorised by the Electricity Regulatory Commission (NERC) as Eligible Customers that can buy in the Electricity Market.

    Medium Term stage

    The Electricity Market is opened to full wholesale competition with both competition to enter the market and in the market.  The number of Eligible Customers gradually increases, as authorised by the Electricity Regulatory Commission (NERC).

    Long-Term stage

    The Electricity Market is opened to full wholesale competition and retail competition.

    From the market design, the only competition to be introduced at the transition stage is competition to enter. It means that at the generation level of the business, competitive procurement of power will be introduced. Even though eligibility is an option under this stage, it would only be allowed for persons directly connected to the transmission system.

    The reality is that currently, NERC has been unable to even meet the criteria for a transition market. The market and NERC have not achieved competitive procurement of generation. If the first level of competition has proved impossible for the market and NERC to achieve, it is difficult to understand the desire and motivation for jumping to eligibility that is designed for the second stage of market development.

    What is evident from this faux pas is that the market design documents were not consulted nor did anyone seek counsel from those with historical knowledge of the electric power sector reform in Nigeria. It is unnatural to feel your way through when there exists documentation to guide you.

    I have also noticed that it would appear that those who urged the Minister to make this policy did not read Sections 24, 25 & 26 of the EPSR Act, but instead confined themselves to the provision of Section 27.

    For ease of understanding, I will reproduce the relevant portions of Section 24 of the Act;-

    “Until such time the Minister has made a declaration in accordance with subsection 3 of this section the commission shall prepare each year a report for the Minister as to the potential for competition in the Nigerian electricity supply industry and these reports shall present the Commissions analysis and recommendations as to whether the Nigerian electricity supply industry has developed to the point where a more competitive market ought to be established under section 26 having regard to:

    (a) The degree of privatisation that has occurred;

    (b) The existence of a sufficiently large number of potential competitive entities so as to avoid likelihood of an abusive market power; and

    (c) The existence of other preconditions, including the necessary metering and information technology infrastructures, required for the operation of a more competitive electricity market.

    The Minister shall present to the President and the National Council on privatization and the National Assembly each report submitted by the commission under subsection (2) of this section and when the Minister, in consultation with the President  and National Council on Privatisation is satisfied that the electricity market in Nigeria has developed to the point where a more competitive market ought to be established pursuant to section 26 of this Act, having regard to the criteria described in paragraphs (a) (b) and (c) of subsection 2 of this section, the Minister shall issue a declaration that a more competitive market is to be initiated.”

    The critical points to be taken from these provisions are;

    • NERC ought to be providing an annual report on competition, which to the best of my knowledge they have not done to date;
    • The Minister ought to be guided on market development by NERC not the other way round;
    • A more competitive market requires certain pre-conditions to be met;
    • The Minister’s actions and directives in relation to market competition must be taken in consultation with NCP and the President (and there is no indication that either the NCP or the President have been consulted on this).

    Further, one of the critical factors to be considered in moving to a more competitive market as explained in the Electric Power Policy 2001 is that conditions in Para 4.4 have been met and then competition can be introduced without threatening the financial viability of the main participants in the system.

    It is easy to assume that neither the Minister nor NERC was acquainted with the market design and therefore they were easily misled on the appropriateness of declaring this level of eligibility in the Transitional Stage of market development.

    The Minister’s actions are in reality a declaration of a more competitive market without even meeting the conditions of operating the transitional market. The policy document on eligible customers does not say what benefit is accruable to the industry or consumers from this policy save for the scant reference to stranded and new generation.

    The concept of eligible customers was introduced in the industry design as part of competition-enhancing mechanisms when the market had reached a certain level of maturity.

    Eligibility does not reduce market illiquidity nor does it cure payment delinquency. It does not improve the transmission system nor does it improve the financial viability of distribution companies. Indeed if the declaration is anything to go by, the eligible customer will have to rely on the transmission system and distribution network that has been found inadequate to ‘Bluetooth’ its eligible power to it.

    NERC and the Minister have failed to consider that electricity distribution is a volumetric business and the end user tariffs in the sector are currently being subsidised by the class of consumers it has boldly declared eligible. Neither the government nor NERC has demonstrated an appetite to allow the tariffs free float to cost reflective levels. It remains to be disclosed who will pay the differentials that will occur if these class of consumers are indeed removed from the revenue base of DISCOs.

    Despite my reservations about the declaration of eligibility at this stage, it would have served the industry better if the Minister had confined the category he opted to make eligible to that referenced in the market design for this stage, i.e. consumers directly connected to the transmission grid. As unnecessary as this may be at this stage, it would at least not distort the market design.

    Weakening the distribution companies by removing the easier to serve customers does not in any way address the problems that have hindered improved power supply in Nigeria. The ‘cherry-picking’ policy currently being pursued is at first glance only one of the many acts that point to outcomes that will benefit private interests to the detriment of the national interest. Investments will not come to the industry as long as the market returns remain in the negative because of government’s inability to provide sustainable regulations. By looking for quick-fixes, the policymakers only succeeded in introducing more volatility into an already volatile industry’s revenue and operating environment.

    The solution to challenges being faced by consumers and operators are well known. The current approach by the ministry and the regulator that has been subjugated by it only symbolises an ostrich solution.

    It is incredible that since writing this, the Ministry of power has come out with even more destructive policy directions. I will comment on them later.

     

    • Ojukwu is a utility regulation specialist.

  • Protecting the youth

    •Erosion of cherished values must be halted if Nigeria is to survive  foreign ‘assaults’

    These are indeed changing times. At the material, spiritual and social levels, the society has decayed. This must have prompted the Federal Government’s outcry about the rise in homosexual cases in the land, especially among the youths. The government called for increased vigilance by parents and all stakeholders to arrest the trend.

    We are also alarmed at the rate of erosion of social values in the country.

    It is obvious that the African socio-cultural milieu does not tolerate such sexual perversion. Under the Goodluck Jonathan administration, the National Assembly passed a bill criminalising such a tendency. At the committee stage, public hearings were held and it was clear that Nigerians were near unanimous in supporting the legislation. Despite threats from the West, especially the United States of America where the trend has been formalised and officially supported on a warped ground of liberalism, President Jonathan signed the bill into law, with a view to showing the youth that the society frowned at such practices.

    It is unfortunate that at a point when we should be building a nation virile on all fronts, the little we have in terms of good social values is fast being eroded  by imported tendencies.

    The West has lost it on this plane. However, because it is developed economically, politically and militarily, it has been able to bear the consequences. The traditional African society is one where sexual perversion in terms of homosexuality, lesbianism, bestiality, paedophilia, among others, are regarded as strange and unacceptable. Nigeria is already polluted by the deluge of unwholesome western music, inexplicable, unprovoked violence, the media and unacceptable religious doctrines. This pernicious sexual abasement is the icing on this bitter cake.

    The Nigerian society is already torn by these grave developments. Yet, the country was built on a strong religious pedestal. Over the centuries, Christianity, Islam and the African traditional religion have peacefully coexisted. None tolerates sexual abasement which the wind of strange doctrine is now blowing in this direction. As the 7th National Assembly observed, the society has to resist the arm-twisting by the western countries apparently bent on foisting this evil corrosion of values on others.

    If Nigeria must recover from its current position within the international socio-economic order, it must put its house in order, drawing together all the agencies of socialisation such as the schools, religious organisations, the traditional institutions and the media. Unfortunately, like other institutions of state, the National Orientation Agency (NOA) established to fight such battles on behalf of the state has remained comatose for years now. We call on the government, through the Federal Ministry of Information, to charge the NOA with performing this all-important task of re-orientating the youth.

    The state of the nation has not helped matters. The economy has inflicted so much hardship on the youth that many of them would stop at nothing to leave the country. Many of such desperate youths end up as slaves in other lands. Those who stay throw anything into the “make it fast and big” syndrome. Any society that fails to impart its values on the young ones has lost the battle for genuine development. Nigerian children can no longer speak their languages, wear the dresses nor cherish things regarded as sacred in our history. The minds are being re-colonised in this age and time. We all have a duty to halt the trend.

    The media has a duty to filter what is beamed to the impressionable minds of the young ones. The regulatory agencies should perform their functions in screening content for broadcast on the electronic media and punish those who decide to unleash strange values on the society. A developed society with no morals is the least desirable at this point in time.

  • Protecting local content

    •Is Agip riding roughshod over an indigenous oil firm?

    Oil industry experts seem to believe that one major reason the Petroleum Industry Bill (PIB) has not seen the light of day is because of the overarching influence the International Oil Companies (IOCs) have over Nigeria’s oil sector. These giant firms include Shell Petroleum Development Company, (SPDC), Chevron, ExxonMobil, Total and Nigerian Agip Oil Company, (Agip).

    These oil majors that have operated in the country since pre-independence sometimes wield such powers and influence that are overwhelming even among government circles. At a point in Nigeria’s history, the leading ones among them were said to have their own police and quasi-army. In fact they did not only have the capacity to critically influence the course of government, they could actually effect a change in government.

    While this may have been possible in the  military era, so much have changed in the polity now. Notwithstanding, occasional muscle-flexing and power shows still go on. Perhaps this undergirds the long-running tiff between one of the majors, Agip and an indigenous oil service firm, Arco Petrochemical Engineering Company Plc., (Arco).

    According to reports, Agip, an oil giant, may be dealing unfairly with a small indigenous oil service firm for the following reasons: One, Agip which has Italian origin, is accused of unilaterally revoking its service contract with Arco, and awarding same to another oil service firm of Italian origin, not minding the requirements of the local content laws. Two, Agip is said to have repudiated a court injunction that status quo ante be maintained in the matter between the two firms. And three, Agip is alleged to have taken advantage of the crises in Nigeria’s petroleum industry to trample upon Arco and deny it of a legitimate business proposition.

    As the story goes, in 2006,  Agip signed a maintenance contract with Arco which had Nuovo Pignone as its foreign technical partner. It was a five-year contract which lapsed in 2011.  The contract was for the maintenance of Agip’s Obob/Kwale/Ebocha Gas Plant. This is a strategic plant that supplies gas to the Nigerian Liquefied Natural Gas (NLNG); Eleme Petrochemicals and Omoku Power Plant. Arco had also carried out an interim contract up till 2013; six months of which it handled alone without foreign partners because the Niger Delta areas were too hot for expatriates at that point.

    All these contracts were approved by the board of the joint venture partner, the Nigerian National Petroleum Corporation (NNPC) and the National Petroleum Investment Management Services (NAPIMS). However, when time came to award another five-year contract, Arco was literally bypassed and the job was unilaterally handed to an Italian oil service firm based in Nigeria, Plantgeria.

    The NNPC board was supposed to approve all such contracts but because it did not meet for quite a while, Agip acted unilaterally. Though the oil major averred that it offered the job to the firm with the most cost-effective bid, Plantgeria, having quoted $10 million against $37 million for which Arco had done the job all these years.

    But Arco insists that Agip was being clever by half and economical with the truth. It stated that it is not possible to deliver the sort of maintenance job it does for the sum Plantgeria has bid; besides, the low bid must be a ploy to remove Arco from the picture only to increase the contract sum down the line. It also noted that the offshore component of the job handled by its new technical partner, GE had been extracted from the contract. In other words, the contract had been split.

    To buttress the point that it has been hard done by, Arco says that both Plantgeria and GE are now poaching its staff.

    We will urge Agip to endeavour to be sensitive to the local content laws and requirements of the country. And since the matter is in court, we urge both parties to return to status quo as requested by the court.

  • Protecting the civic space

    Protecting the civic space

    All over the country, Civil Society Organisations, CSOs, have continued to play significant roles in different sectors, especially areas neglected by government. Recently, during the BringBackOurGirls# campaign, they helped to bring the issue of the abducted school girls to the front burner.

    However, a lot of criticism has trailed their structure, mode of operation and funding.  Mid last year, a bill to regulate their operation was proposed by a Nigerian lawmaker citing the fact that they get international funding which were not properly monitored.

    A few weeks ago, NGOs across the country came together for their annual conference organised by NNGO at the NECA House in Lagos. Here, stakeholders from the public and private sectors took turn to share experiences, identify some of the problems and potential. Dr Ann Nzegu, who represented the Minister of National Planning, identified way government, civil society and the private sector can walk hand in hand to bring about changes in the different sectors across the country.

    Some of the issues deliberated upon included improving the regulatory environment for NGOs, Civil Society Organisation’s legitimacy, transparency and accountability, the role of government and civil society.

    A panel discussion session that included Hajia Saratu M. Shaffi of the Corporate Affairs Commission (CAC), representative of Samaila Davids Khalif of SCUML, Yemisi Ransome Kuti, Oladotun Olugbemi, Peter Ademola Olayemi and Victor Nosegbe took turn to identify the problems affecting civil society over the years and tried to proffer solutions to some of these problems. Inefficient structure, management and funding were the major problems identified.

    Dr Abiola Tilley Gyado, a development expert who retired from Plan International as the Pan African Director, talked about protecting the civic space. First, she began by speaking about the importance of social protection and why she is passionate about it.

    “Social protection is a topic that is dear to my heart. In my various works, the issue had come up that social protection and it had been the centre of the work that I do over the years, the centre of developmental agenda. It has a link with HIV and AIDS, reproductive health and child survival. It is gaining a lot of popularity and importance not because we have not woken up to what we should have done to it.”

     

    Tilley Gyado goes on to buttress her point with day-to-day occurrences which make the issue very important. “When we meet each other for the first time, we ask: how are you? It is inquiring about your well being. A person who is hopeless, jobless and hungry cannot smile when you say how are you? With that concept, we can say that social protection has no single definition but it is a fundamental human right. It takes care of vulnerability and insecurity.”

    She went on: “The question how are you that can be answered conveniently by a person in Lagos, cannot be answered the same way by a person in Damaturu who was recently affected by the bomb blast. Here, we are talking about insecurity, lack of good life and lack of education. These bring about inequality, inconsistency and uncertainty. We must try to remember that everything is the consequence of what should have been.”

    Stressing the fact that the issues are universal and must not be treated with levity, the development expert added that “Some would say all these are imported theories; however, I would say that social protection is not an importation. This can be compared to the importance of the extended family system. It is to cover up for your cousin who does not have money to eat. That is why when you have food, you send to him or her.”

    She then goes on to paint scenarios of how people or communities help with social protection and the ripple effect it has towards the society. ‘The Ikorodu people when somebody dies, they say they want to do Iwolefu. What this means is that everybody brings something out to contribute to the funeral of that person. Even as Nigeria has been identified as a big economy, I don’t know how much of this has brought food to the dining table of many of us. Can you also imagine the millions of Nigerians who went to bed yesterday night without food? You would be amazed to find that millions of Nigerians are feeding from the drain, those are not socially protected.”

    Tilley Gyado continued: “At the moment, it is the centre of development work because even with the MDG, things are not the way theyshould be. A lot of people living on less than a dollar per day are decreasing. There are many children who cannot go to school because their parents cannot afford it. There are so many children who are going to school without food because their parents cannot feed. And a child that goes to school without food, please tell me what would that child learn because before break time that child’s stomach is already talking?”

    She added, “there are many children that are dying because their parents cannot afford access to medical care. The expenses at the point of treatment are ridiculous for many. I am giving you these examples because they are social protection issues. These are issues that address security and vulnerability of the individual and groups of people. For instance, when a bread winner dies, someone would be asked to wait, so that her brother goes to school. And guess who that usually is, it is the girl-child.”

    Tilley Gyado then painted another scenario this way: “There are only three pieces of meat in the pot; your daddy would eat one and when he travels we would share the remaining over the week. That is social protection and we need to be careful with things that have adverse effect on shock, like Boko Haram, bomb explosion and armed robbery.”

    These, she stressed, are events that are unpredictable but they can trigger somebody into abject poverty. “The father that died or the mother that was involved in an accident and could no longer go to the market would indirectly tear the family apart. There should be a determined source of income for everybody because that is a fundamental right. It is important to be able to have access to food and it is a fundamental right, not a privilege.

    “I laugh when people talk about stomach infrastructure in Ekiti. I laugh because people sell their privilege to get their fundamental rights. It is your fundamental right to be able to eat; to work so that you can have the resources to feed yourself and your family. If you are a graduate and you have been marching the streets of kano, Lagos or Ado-Ekiti for about five years or more and you still do not have a job, then you have become a SAN (Senior Applicant of Nigeria). It is wrong and there is no social protection,” she concluded.

     

  • Protecting your kidneys

    Protecting your kidneys

    As the world marked its annual Kidney Day last week, the importance of proper kidney maintenance was brought to the fore. Rita Ohai writes on ways to guard them

     

    IN an African society where the sheer size of food on your plate or waist is often a reflection of your financial status, adopting a healthy lifestyle can be an uphill climb.

    According to a recent research, more than 50 percent of people living with kidney diseases do not know it. As a result, they usually do not get the treatment they need until it creeps in silently and the kidneys have failed.

    Although this pair of bean-shaped organs is relatively small, they are responsible for ensuring that the blood circulating in our body is free from harmful organisms, waste products and excess water.

    This vital organ also regulates the blood sugar, monitors levels of sodium and potassium and controls the acidity of your blood as they help in making red blood cells.

    Explaining how the kidneys work, Dr. Jimmy Kalejayie, a general medical practitioner, states, “Every day, a large volume of the blood pumped by the heart passes through our kidneys for cleansing purposes. And each time the fluid is forced through a small capillary known as the glomerular nephritis, unwanted waste materials and toxins in the blood are sifted from the blood and passed out as urine. When this is done, the fresh blood is allowed to return to general body circulation.”

    While the role of the kidneys is known to be important, it is essential to understand the magnitude of damage that could occur if this organ is not properly taken care of.

    Kalejayie expresses, “Kidney disease are called ‘silent diseases’ because many times they show no symptoms in the patient till is gets to a very advanced stage. Before you know it, the person will need to start dialysis treatment or even go for surgery.

    “But before it reaches a very advanced stage, the doctor might notice a change in the quantity of urine passed or the presence of blood. They might also notice foaming when the person urinates. Other signs are pain around the lower back or in the genitals.

    To keep the kidneys functioning as they should, including a few management tips in your health routine may help keep you off dialysis while preventing kidney failure later in life;

    1. Drink one and a half to two litres of water a day and drink only moderate amounts of tea, coffee, alcohol and cola because they contain caffeine and can dehydrate the body causing toxins to accumulate. It will help to stay away from sugars, salt, sodas and artificial sweeteners.

    2. Watch your blood pressure and blood glucose levels, especially if you are a Nigerian who feeds on a large carbohydrate diet. Follow good lifestyle advice about weight, exercise and stress. Remember that uncontrolled hypertension can speed up the natural course of any underlying kidney disease.

    3. Eat a balanced diet with a lot of fruits and vegetables. Take care not to eat too much protein like meats and eggs, which is the source of most of the waste that has to be eliminated by the kidneys.

    4. Quit smoking and drinking as nicotine and alcohol have harmful effects of all the body’s organs.

    5. Get a kidney function test as part of your annual physical to help your doctor catch any potential problems early.

    6. Protect your kidneys from blows during contact sports.

    7. Take care when using drugs because they are processed by the kidneys and too much of it can damage them.

    8. It cannot be overemphasized how important vitamin D is to our general health including the kidneys. Vitamin D is not a vitamin at all but a steroid hormone that is probably the single most important factor in human health, so go out more often and play in the sun.

  • Protecting the environment

    Protecting the environment

    SIR: The Environmental Impact Assessment (EIA) process is all about new capital projects being evaluated for potential environmental, social and health impacts. This assessment is used to anticipate and plan for the avoidance, minimization and mitigation of potentially significant negative impacts, as well as for the enhancement of potential benefits during the planning, construction, operation and decommissioning of various projects.

    The effort to protect the environment is based on people’s awareness of the value of the complexity of the natural world. Stakeholders ought to recognize the importance of conserving biological diversity—the rich variety of life on earth: its ecosystems and species, and the ecological processes that support them.

    In this aspect, recognizing the value of fresh water as a fundamental social, environmental and economic resource ought to be of paramount importance to government agencies saddled with the responsibility of maintaining an healthy environment such as Lagos State Environmental Protection Agency (LASEPA) and Lagos State Water Regulatory Commission ( LAWRC)both organs of the Lagos State Government.

    Water is life; waters in the state should be made safe to social life as well as for business purpose. As a stakeholder, these agencies of the state government should ginger their efforts towards knowing that access to sufficient sources of wholesome water is essential for the communities in the state, especially those close to the riverside areas as the state is aquatic in nature. These agencies should strive to develop an integrated corporate freshwater management strategy to enhance any current process that might be in operation including tools and guidance on water stewardship and management throughout the state. In addition, they should try as much as possible to develop a global position statement on fresh water, which could stand as a blue print for the world. Both LASEPA and LAWRC should try as much as possible to upgrade their laboratories to a world class in order to achieve this feat.

    The world is experiencing a great climatic change presently, there is therefore a widespread view that increase in the releasing of Carbon Dioxide to the atmosphere is leading to climate change, with adverse effects on the environment. There is a need in this aspect for Lagos State government to contribute to climate change policy discussions. This discussion should reflect a balanced approach to addressing climate change through short- and long-term measures and the challenge should be to proffer solutions that protect the environment without undermining the growth of the state economy. I strongly believe that a successful climate change policy will be one in which the reduction of non environmental friendly elements vis a vis carbon dioxide is accomplished equitably by the government through long-term and coordinated State frameworks.

    The major primary sources of non-environmental friendly elements in our society is combustion of fuels during various operations and, in some cases, flaring of the natural gas that is extracted along with crude oil( this more peculiar to the South-south region of the country). The long-term commitment should be to improve energy efficiency in our day-to-day operations, which will diminish carbon emissions in the society. With all these factors being put in place and monitored genuinely, the environment surely will be protected with lives getting better.

     

    • Ogbe Kayode Richard

    Lagos