Power emergency: Governors approve $5.3bn finance plan

POWER

The governors of the thirty six states of the Federation yesterday endorsed President Umaru Musa Yar’adua’s proposal to fund the much-expected power sector emergency plan from the excess crude account, prompting the National Economic Council (NEC) to approve the immediate release of $5.3 billion from the account for the project.

The council also approved the immediate release of $ 4.87 billion from the same account for sharing this month by states and local governments. States will share $2.3 billion while local governments will share $2.54 billion. The Federal Government will not partake in the sharing, having earlier used its share of the funds to exit the Paris Club debt.

Briefing reporters after the NEC meeting in Abuja, Kaduna State Governor Arc Namadi Sambo said a twenty-man committee has been constituted by the council to implement the emergency measures expected to be declared in the

Power sector next month. The power sector emergency implementation committee chaired by Vice President Goodluck Jonathan consists of nine governors, five ministers, one representative each from organized labour, the mass media and the oil sector, and two representatives of the banking sector.

He said, "The implementation committee is headed by the vice president, there are six governors one coming from each of the six geo-political zones, and the three governors who were former ministers of power, then the current minister of State for gas, minister of finance, minister of state for power, Attorney General of the Federation and the Minister of National Planning, two representatives from banks, one from the labour, one from the media, one from the OPTS (oil operators)." 

Gov Namadi said the committee would ensure the generation of 6,000 megawatts of electricity by 2009 and 10,000 megawatts by 2011. He said state governors endorsed President Yar’adua’s proposal to fund the power sector emergency from the excess crude account because they believed that the nation’s epileptic power situation should be treated as a national emergency.

He said a separate body would eventually be set up to run the emergency power projects to ensure judicious use of the funds to be injected into the sector.

"After along deliberation, the states supported the proposal that funds from our excess crude will go towards this project as part of our national efforts to address this problem that we see as key to the development of our great country. In the process of that, certain decisions were also taken. We took cognizance of the fact that to avoid the mistakes of the past and the concern of implementation, that there was need for the implementation to take different approach and we took a decision on the composition of the implementation committee," Governor Namadi said.

In his own speech at the briefing, Finance Minister Dr. Shamsudeen Usman said "there was cooperation by all parties.

The governors supported the president that the power situation needed to be treated as an emergency and needs to be treated by all tiers of governments as an emergency. And there was an agreement about what is involved and that the money required initially, totaling about $5.37 billion, should come from the excess crude account."

The minister said the $5.3 billion would be an additional fund for the project, saying "you will recall that earlier, about $3.068 billion had been drawn from the excess crude account to fund the NIPPs. Additionally, the FG will be funding the Zungeru and the Mambila hydro plants, but those are not part of the medium term."

He said the presentation on the multi-year tariff system for electricity made by the Federal government would be discussed at the next NEC meeting. 

On the likely implications of the impending release of about $10 billion into the economy, the Governor of the Central Bank of Nigeria (CBN) Professor Chukwuma Soludo, who also spoke at the briefing, said the inflationary impact would be minimal since the expenditure has already been factored into the nation’s monetary policy for this fiscal year.

Dr. Saraki , the Governor of Kwara State also briefed newsmen on Wednesday night after they met under the auspices of the Governors’ Forum. He said the governors took note of some of the difficulties that had faced the power sector in the past and have seen the need to address the issue of tariff in order to attract private sector investors to the power sector. Saraki further said the participation of state governments would enable them to get adequate information about the project and monitor its implementation to achieve the desired results.

On the food crisis, Governor Saraki said as a follow-up measure, governors agreed that efforts should be geared towards medium and long-term strategies that will help address the problem.

He emphasized the need to devise strategies that would help farmers to increase production, particularly in rice so that many states in the country can be producing it. According to him, a lot of attention has been focused on short-term solutions with little emphasis on medium and long-term solutions to address food crisis.

He said the governors resolved that Millennium Development Goals (MDGs) should be the same model with University Basic Education (UBE) so that its implementation can be transparent and equitable. The governors, he said, believe that important areas in the MDGs should be identified to enable them participate with their counterpart funding.

Governor Arch Mohammed Namadi Sambo is a true democrat, whose approach to problems is always humane and conciliatory he is a man of peace who patiently looked to the future with courage and hope. His commitment in the direction of transforming the state into a relatively better integrated and functional polity is continuing  with a mission  to create a stable  and cohesive polity capable of securing effectively the interests of the various communities and giving them the opportunity to develop and live in peace  with one another.

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