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Sunday, 30 March 2014

Privatisation fraud: UN’s searchlight on Nigeria

After playing the ostrich over palpable complaints that the privatisation process of the country’s power sector was sacrificed on the altar of fraud  and nepotism, Nigeria’s Federal Government is now under pressure of the United Nations (UN) to respond to the queries raised over mismanagement allegations that trailed the exercise acclaimed to be one of the most transparent in the world. Sunday Business Editor, ANDY NSSIEN, reports on the latest development.
Chinedu Nebo  Ngozi Okonjo-iweala
Chinedu Nebo                                     Ngozi Okonjo-iweala
Last week, the UN alleged that Nigeria’s Federal Government mismanaged a total of $51 billion in the power sector in the past ten years and demanded proper accountability.
The allegation which was contained in a letter sent to President Goodluck Jonathan by the UN was signed by the UN Special Rapporteur on Extreme Poverty and Human Rights, Ms. Magdalena Sepúlveda Carmona, and Special Rapporteur on Adequate Housing, Ms. Raquel Rolnik.
They demanded some answers from the Federal Government over the alleged mismanagement of $3.5 billion annually in the power sector in the last ten years, amounting to $35 billion.
The UN rapporteurs’ action was sequel to a petition lodged in 2013 by a coalition of human rights activists, labour, journalists and lawyers led by the Socio-Economic Rights and Accountability Project (SERAP).
According to the petition, the implementation of the Multi-Year Tariff Order II (MYTO II) by the Nigerian Electricity Regulatory Commission (NERC) was “having detrimental impact on the human rights of those living in poverty in the country.”
That’s not all.  The global watchdog also demanded explanations on another $16 billion released to improve electricity supply in the country, while insisting that the funds had not been properly accounted for.
The Executive Director, SERAP, Adetokunbo Mumuni, who put the total amount of money to be accounted for by the government at $51 billion, explained that around $3.5 billion has been mismanaged annually over the last ten years, and a total of $16 billion released to improve electricity supply in the country that has not been properly accounted for.
The rapporteurs did not spare the generating and distributing firms that bought over the assets.
“The Business Units, which have taken over from the PHCN, participate in large-scale corruption such as graft from exorbitant consumer bills, rejection of payment to independent third parties such as banks to keep management of funds secret, unprecedented disconnection of consumers’ power lines, general bribery and fraud among staff (members), adding up to over N1 billion extra charged to consumers annually.”
The UN special rapporteurs argued that “all beneficiaries of the right to adequate housing should have sustainable access to energy for cooking, heating and lighting. The failure of the states to provide basic services such as electricity is a violation of the right to health,” they said.
Consequently, the special rapporteurs wanted answers to the following questions: are the facts alleged by SERAP and others accurate? What kind of impact assessments were conducted to gauge the potential impact of the electricity tariff increases on the human rights of people living in extreme poverty in Nigeria? If so, provide details.
Other queries include: did public consultations take place, including with potentially affected persons and especially people living in extreme poverty, prior to the adoption of the new Multi-Year Tariff Order II? If yes, please give details of the dates, participants and outcomes of the consultations.
Was accessible and culturally adequate information about the measure actively disseminated through all available channels prior to consultation?
Also requiring explanations were:  what measures have been put in place to ensure that the human rights of people living in extreme poverty in Nigeria will not be undermined by the increase in electricity tariffs? In particular, what measures are in place to ensure that they can enjoy their right to adequate housing, including sustainable access to energy for cooking, heating and lighting, which is a component of this right?
The rapporteurs were not done yet: what mechanisms exist to ensure transparency, accountability and regular monitoring over the use of tariff revenue within the government? What mechanisms are available to address allegations of corruption, or other complaints? What mechanisms are in place to monitor and regulate service provision by private actors, as required under the State’s duty to protect?
They wanted to know if there is provision to ameliorate the plight of the poor.
Please describe any existing policies or measures aimed to promote affordability of electricity provision for people living in extreme poverty. Are any subsidies already available and implemented? What is being done to mitigate the hardship imposed by increased tariffs, especially for persons living in poverty?
According to the special rapporteurs, “We would be most grateful to receive a response within 60 days, which will be made available in the report that we will submit to the Human Rights Council for its consideration of the matter.”
The long list of groups and individuals that endorsed the petition included; the Gender and Constitution Reform Network, a coalition of over 250 women’s groups (GECORN); Human and Environmental Development Agenda (HEDA), and One Voice Nigeria, a coalition of civil society groups.
Individuals that backed the petition included; Femi Falana, SAN; Professor ‘Dejo Olowu of the North West University, South Africa; Victor Oladipupo Momodu; Tope Robert; John Collins; Onyedikachi Orizu; and Gbenro Adeoye.
Also in support of the petition were ;Wole Soyinka Centre for Investigative Journalism (WSCIJ); Nigeria Union of Journalists (NUJ), Lagos State Council; Nigeria Labour Congress (NLC), Lagos State branch; Nigeria Bar Association (NBA) Ikeja branch; National Union of Food Beverage and Tobacco Employees (NUFBTE); and Joint Action Front (JAF).
Others were, Women Advocates Research and Documentation Center (WARDC); Women Empowerment and Legal Aid Initiative (WELA); Partnership for Justice (PJ); Campaign for Democratic Workers (CDWR); Democratic Socialist Movement (DSM); Civil Society Network Against Corruption (CSNAC), and Education Rights Campaign (ERC).
According to the coalition, “The introduction of a new electricity tariff by the government of President Goodluck Jonathan, not only risks violation of human rights under the International Covenant on Economic Social and Cultural Rights but also exacerbates and perpetuates poverty for millions of Nigerians already vulnerable and marginalized and lack access to basic necessities.”
The petition dated September 6, 2013, had called on the UN to send an urgent appeal to the Federal Government to delay the increased fixed rate electricity tariff until the government is able to put in place mechanisms to ensure regular and uninterrupted electricity supply in the country.
The petition also demanded an impact assessment of the increase on people living in extreme poverty, adding, “By introducing fixed rate electricity tariff, the government is complicit in violating the human rights of people living in poverty and undermining their personal development and prosperity. We believe that it is premature for the government to increase electricity tariff prior to taking effective measures to guarantee and ensure regular and uninterrupted electricity supply across the country.”
The coalition also requested the Special Rapporteur to visit the country to “conduct an in-depth investigation into the effects of the increased electricity tariff on people living in poverty,” and to urge the government to “take all reasonable measures to protect, respect and fulfill the rights of people living in poverty and social exclusion across the country.”
The persistent outpour of disenchantment on the outcome of the exercise was hardly surprising.
Few months after the privatisation of power was flagged off last year, two top government officials involved in the sale of the government assets to the private sector  were at daggers drawn  over the process , signaling fears  that the exercise might not inspire the much needed confidence to drive home the initiative.
The apple of discord was Enugu Electricity Distribution Company (disco) which was awarded to Interstate Consortium.
The Chairman, Technical Committee of the National Council on Privatisation, Atedo Peterside, had raised an objection on the process which led to the sale of the disco to Interstate.
His grouse was the decision of the Bureau of Public Enterprise (BPE) to grant an extension of time to Interstate, the preferred bidder for the Enugu Electricity Distribution Company, rather than invite the reserve bidder, Eastern Electrics, in accordance with the set rule.
He had argued that granting an extension to Interstate that never showed any seriousness in paying the balance of 75 per cent of the bid price until the deadline expired was equivalent to giving the company a discount.
Several moves to resolve the matter were said to have been hampered by the intransigence of the BPE Director-General, Benjamin Dikki.
In a letter, the head of the Technical committee, Peterside who was under pressure by the committee members, told the 20 members of the committee that his attempts to convene a meeting of the technical committee had been frustrated by Dikki.
His words: “Many of you contacted me recently to enquire why a Technical Committee meeting has not been called to consider and deliberate upon updates on the PHCN privatisation.
“My understanding has always been that it is the chairman of a committee that decides when it is appropriate to call a meeting, having considered possible agenda items and the need to dispense with them promptly with a view to achieving the broader objectives/mission of that committee.
“The reason we are unable to meet is because the DG of BPE, who controls the BPE’s budget and, therefore, releases funds to pay for hotel bills and sitting allowances, has surreptitiously vetoed all my efforts to convene a meeting of our technical committee of recent.” he said.
The letter continued, “His latest ploy was to copy me on a text he purportedly sent to His Excellency, the Vice President, requesting approval for our committee to be allowed to meet and refusing to give me any feedback even after I gave him (the DG) 24 hours within which to revert to me. He did not reply my e-mail and did not even bother to explain why he did not reply.
“As you are all aware, the Technical Committee serves as an advisory/due-process watchdog over the BPE, and we are accountable to the NCP (National Council on Privatisation). Accordingly, I find the DG’s surreptitious attempt to keep us in the dark objectionable in the extreme.
The letter steered clear of insinuating exogenous interference.
“For the record, I do not believe for one second that the DG is acting on instructions from above. His body language and enthusiastic evasiveness suggest that he is the initiator who has pro-actively been looking for ways to avoid having to transparently table issues/updates before this technical committee.
“In the circumstances, there will be no meetings of the Technical Committee until further notice. Members should please, therefore, stop calling me to ask why a meeting has not been convened. I will revert with additional feedback after carrying out further investigations/consultations with the relevant higher authorities,” the letter added.
However, after intervention to no avail by the governors of the South-East, Eastern Electrics, the reserved bidder, headed for the courts.
A public affairs consultant, John Ukegbu said there was need for the Jonathan administration to respond to the issues raised in the petition now that the allegation is before the international community.
He told Sunday Independent that it was unacceptable for the government to foist certain policies on the masses, simply because they have no teeth to bite.
Ukegbu said the spurious bills charged by the new power investors could not be justified when electricity supply in the country has deteriorated especially in recent times, adding that pushing  high estimated bills to the consumers amounted to putting the cart before the horse.
According to him, there should be marked improvement on the power supply through out the country to justify extra cost imposed on the consumers.
He said although the power generation and distribution is now a private sector responsibility, government should not allow a few group of people to take undue advantage of the policy change to exploit the already impoverished populace.
Another analyst and commentator on international affairs, Mike Oton, while acknowledging the intervention of the UN on the issue was worried about the corporate image of the country, especially now that  Nigeria’s potential for becoming one of the largest economy in the world  in the near future, is generating global attention.
To him, the whole issue has arisen because corruption has pervaded all facets of the economy to the extent that there are no human endeavours in the country that are corruption free.
He told Sunday Independent that for Nigeria to attain its full potentials, concerted efforts must be made at all levels of governance and other human endeavours to curb the menace of corruption in order to inspire the confidence of the international community which has placed so much hope on the future of this country.

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