Letter from Lagos

“Watch out. South Africa is on a slippery slope,” a Nigerian friend said to me in Lagos last week when inquiring why the economic powerhouse in the south had been subjected to power cuts.

Nigeria was not always like this, he said, referring to the thundering expensive, fuel-guzzling generators that are as much a feature of life in the country as powdered yam, Fela Kuti and pepper soup.

Only a fraction of Nigeria’s installed electricity capacity is working and the country has gone backwards in its power supply.

Former president Olusegun Obasanjo, while still in power, was attacked for his poor showing on the power front (among many others).

His defence was that he had spent more than $3-billion on sorting out the problem.

Instead it continued to get worse, leaving everyone wondering where the money had gone.

Earlier this year President Umaru Yar’Adua said more like $10-billion was allocated by his predecessor to tackle the critical power problems, adding that it was a mystery why Nigerians were being plunged ever further into darkness.

The House of Representatives recently set up a committee to probe the issue—and its findings are startling. One of the most shocking revelations is that the total amount Obasanjo’s government squandered on power was closer to a staggering $16-billion.

The head of the committee said its focus was to “unravel the classic mystery in Nigeria’s development whereby the more you spend on power, the less electricity you get”.

Slowly a picture of what really happened to the money has begun to emerge.

It seems Obasanjo set up an agency to award power contracts through a committee headed by then power and steel minister Lyel Imoke, who reported only to the president.

The agency breached all procurement procedures and the work went unmonitored. No bidding took place and most of the money for contracts was paid upfront.

The committee heard that in some cases the ground was not even cleared for projects for which huge amounts of money were paid out, showing a clear lack of monitoring and assessment once the go-ahead was given.

Some say the fact that the companies involved did not even try to execute projects for which they were paid vast sums clearly showed that those awarding the contracts were getting major kickbacks.

A former head of state, General Abdulsalami Abubakar, who guided Nigeria through a year-long transition from military rule to democracy in 1998-1999, was named among the culprits who received millions of dollars. A co-owner of his company is the former head of the former state power utility, Nepa, which failed to achieve its core task of providing power to the people.

International companies also benefited from this iniquitous scam, paid for with oil money.

Obasanjo, when he came to power in 1999, said he would make power, with tackling corruption, a key element of his rule.

Yar’Adua, on assuming power last year, said he would declare a state of emergency over the power crisis in an attempt to focus on it as the single most important issue of his first term.

Nigerians were hopeful, but more than a year later, they are once again resigned to the status quo. They have been here before.

Notwithstanding the decades-long power crisis, Nigeria has become one of the liveliest emerging markets around and its economy is booming.

Nigerians are excited about the potential to become one of the world’s biggest economies by 2020, a scenario Goldman Sachs forecast several years back and which is touted at every possible public forum.

They believe that if they have come this far without power, imagine the wealth they could create if they actually had it.

Last week Adams Oshiomole, a prominent Nigerian politician and trade unionist, put the issue in perspective. “You cannot achieve an economic miracle and a world-class economy with candles and generators,” he told a local newspaper.

Even as I read the article the lights of my hotel room flickered briefly as the equipment made the jump between state power and the ever-present generator. Nigerians do not consider it news when the media carry reports of blackouts. The news, they reckon, will be an announcement of uninterrupted power.

We should probably be grateful, then, that our blackouts and power problems still make headlines.

When it is no longer newsworthy, we will know we are definitely on the slippery slope.

Dianna Games is director of Africa @ Work, an African consulting company

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