POWER MANAGEMENT: THE LESSON TCN NEEDS FROM NAFDAC
Top government officials should relate to businesses with understanding, writes Yemi Balogun
On Wednesday, July 14, 2004, Professor Dora Akunyili, the then Director General of the National Agency for Food and Drug Control and Administration (NAFDAC), marked her 50th birthday, and it turned out to be a national celebration. It remains the largest and most colofourful 50th birthday of any individual in Nigeria’s history. General Yakubu Gowon, a former military Head of State, was in attendance, like Mrs Stella Obasanjo, wife of the then President, Chief Olusegun Obasanjo. Bola Tinubu, Nigeria’s President-elect, who was then the Lagos State governor, led other state governors to grace the occasion in Lagos.
The ceremony was sponsored and led paradoxically by pharmaceutical, food, and beverage companies like Nigerian Breweries, May & Baker, and Neimeth Pharmaceuticals. The nature of the sponsorship was paradoxical because most firms in Nigeria do not want to have anything to do with regulatory agencies like NAFDAC, let alone celebrate their leaders in a spectacular manner. But Dora’s NAFDAC was different. NAFDAC’s leadership recognised that the ultimate responsibility of regulators was to promote businesses, not to destroy them in the name of being “policemen of the sectors”. (The police are actually in existence to protect society, and not to destroy or harass its members).
Akunyili’s NAFDAC not only saved businesses but also boosted them. It performed its functions in a humane way, and not through draconian policies and actions. This should be an important lesson to not just regulatory agencies but also state-owned enterprises (SoEs) like the Transmission Company of Nigeria (TCN). The TCN and its market operating unit, popularly known as the Market Operator, have been in the news in the last few weeks for the wrong reasons.
The TCN has been threatening to shut down nine electricity distribution companies (DisCos) and three power generation companies (GenCos) over various amounts owed to government bodies in the power sector for ancillary services. To demonstrate it could bark and bite, it disconnected all 29 feeders of Aba Power from the country’s sole transmission network on April 21, and as a result threw nine out of the 17 local government areas in Abia State serviced by Aba Power into darkness. This was the first time in Nigeria’s history that a whole area covered by an electricity distribution company has been plunged into darkness over a debt. Worse, Aba and its environs, famous for medium and small manufacturing, was in total darkness for an unbelievable 10 days until the Minister of Power intervened on Sunday, April 30.
Ten days represent one-third of a month. How many businesses anywhere can survive for 10 days if their operations are shut down for one-third of the month, as they will still pay staff salaries as well as corporate and staff taxes, among other things? In other words, the Transmission Company of Nigeria and the Market Operator do not understand that their role is not to kill businesses in the name of injecting discipline into the power sector but to help them grow stronger. When their business partners or those they supervise or monitor do better, the situation becomes a win-win for all industry players. The government establishments will become celebrated, as the nation saw in the case of NAFDAC under Professor Akunyili’s leadership. Truly, the TCN has been unfair to Aba Power which commenced full operations only last September and has within six months paid a whopping N440m to the Market Operator.
TCN’s mindset is quite troubling for the nation. For example, it wrote a warning notice to Aba Power on April 19, 2023, to settle its invoices amounting to N869m within 30 business days, but within 24 hours disconnected the electricity distribution company from the network, as advised by the TCN executive in charge of the market operating unit, Dr Edmund Eje. A case of acting in bad faith is writ large here.
To exacerbate matters, the TCN reneged on its pledge to reconnect Aba Power to the national grid the moment it paid N120m out of the outstanding N869m. But the TCN and the Market Operator, as it turned out, were not willing to reconnect Aba Power after the payment on Friday, April 28, 2023. The intervention of Power Minister Abubakar Aliyu saved the situation. Minister Aliyu, aware of the huge national implications of the removal of all 29 Aba Power feeders for 10 days and three out of over 200 Kaduna DisCo feeders for four days, ordered the TCN to restore all feeders to the network and give the DisCcos up to 60 days to clear their invoices. The minister, unlike the TCN and the MO, appreciates that government agencies are not mandated to kill private businesses but to support them.
Engr Aliyu’s intervention is reminiscent of Prof Akunyili’s actions in NAFDAC. Anytime NAFDAC’s staff wielded the sledgehammer against erring importing or manufacturing firms, Akunyili would personally assess the penalties critically and intervene where necessary. She would not approve extreme measures against such offences as writing “tablets” on a pack of caplets and having a picture of someone having a catarrh on the pack of a medicine for treating cold and catarrh. She would rather decide that offenders pay a much lower amount directly into NAFDAC’s account because they did not commit the offences intentionally. She would call the offending companies to her office and in conjunction with relevant NAFDAC officers enlighten the firms. She would give them, say, three months to clear the existing stock from the market. I am aware she granted some firms extensions anytime it was established they couldn’t clear the stock within the period granted, though payment was always made to NAFDAC for such extensions.
Top government officials should relate to businesses with understanding, as NAFDAC did under Akunyili. After all, ours is a very difficult operating environment. The Transmission Company of Nigeria and the Market Operator, for instance, should organise public enlightenment activities in conjunction with DisCos on why customers should pay electricity bills as and when due. Ten years after privatisation, there are many Nigerians still under the notion that electricity supply is government business; therefore, it should be free. There is meter bypassing, outright energy theft, vandalism against distribution infrastructure, etc., on an industrial scale throughout the country. The TCN can help address these grave problems which affect the ability of distribution firms to generate substantial revenues. Such assistance will be part of corporate social responsibility.
There is, indeed, a lot the TCN and other government agencies need to learn from Akunyili’s NAFDAC. Let them become business promoters, not wreckers.
Dr Balogun is CEO of Merit Associates Consulting Ltd, Abuja
