Successive interventions, including privatization, have not yet resolved Nigeria’s persistent power sector challenges. This year, the newly-appointed Honorable Minister of Power will continue on the path towards achieving key power sector goals, namely increased reliability and reduced revenue loss. To succeed, the Minister’s 2020 agenda should include:

1. Taking practical steps to mitigate high losses in transmission and distribution

Recent estimates of technical, commercial and collection losses across DisCos stood at 47%.¹ The Minister should:

• Immediately review the performance agreements with private asset owners.
• Integrate information technology alongside network upgrades to provide reliable data on consumer demand preferences and market trends.
• Begin enforcing laws against energy theft.
• Accelerate implementation of electricity metering.

2. Correcting underpriced tariffs

The Multi Year Tariff Order (MYTO) holds prices too low to recover costs, resulting in chronic shortfalls that require repeated financial injections from the Federal Government.² The Minister should:

• Ensure smooth implementation of the recently revised tariffs by more actively engaging electricity consumers, labour unions and business groups.
• Following implementation of cost-reflective tariffs, the Government could then recapitalize DisCos.

3. Actively foster communication and collaboration across a complex market

The lack of coordination and shared goals by Government, regulators, private investors, and other power sector actors hampers all activities across the sector. The Minister could:

• Host a monthly platform with all power sector leaders to improve relations.
• Experiment with different problem-solving models for how sector leaders could exchange information regularly amongst themselves.

Conclusion: These recommended priorities do not cover the full range of the problems facing the sector. However, little can be expected unless meaningful progress is made in these three areas. And momentum on all three would have a positive ripple effect along the entire value chain and finally position Nigeria to begin to tackle its long-term power needs.

Endnote

1. Association of Electricity Distributors (ANED), 2019Q2.
2. Association of Nigerian Electricity Distributors (2019); Femi A., Nnodim 0 (2019) The Punch: Discos suffer N1.15tn four-year tariff shortfall.

This article was first published on Energy for growth Hub

By Basil Anthony Abia

In Brief
On 20 August 2019, Nigeria partially closed its land borders with Benin, Togo, Niger, Cameroon and Chad – citing the irate level of smuggling of goods into the country, especially staple food commodities like rice, cooking (vegetable) oil, poultry, tomato, flour and pasta. The closure of Nigeria’s land borders has now been fully consolidated – with further restrictions on import and export of goods through land borders.

Numbers
Since the border closure announcement and its immediate implementation in August, inflation has been on the rise.
The latest consumer price index (CPI) report released by the National Bureau of Statistics (NBS) in November 2019 proved that the year-on-year food inflation rate increased from 13.2% in August 2019 to 13.51% in September 2019 and then from 13.51% in September 2019 to 14.09% in October 2019. This was a 1.33% month-on-month increase – with rice, poultry products, frozen fish, cooking oil/fats and bread/cereals recording the highest increase in cost prices nationally. A huge contrast with regards to decelerating food inflation rates usually recorded during a harvest season.
With the food sub index of the CPI recording an 18-month high in October 2019, it unsurprisingly contributed to the rise in CPI from 11.24% in September 2019 to 11.61% in October 2019.

Context
Staple food commodities like rice, vegetable (cooking) oil, frozen fish, poultry products and packed beef are among the highest hit on the national spectrum in terms of the inflation in food prices since the enforcement of Nigeria’s land border policy.
Rice as one of the main national staple food commodity unsurprisingly has claimed its place as a topic for constant national debate. With context to its massive demand, inability of domestic supply to meet demand, cultural reverence and taste preference, it is inevitable to discuss the land border closure without talking about rice.
The United States Department of Agriculture (USDA) estimates that local demand for rice in Nigeria alone is at 7.3 million metric tonnes. Currently, local production stands at 4.8 million metric tonnes yearly. This suggests that the inability of domestic supply to meet local food demand will cause an inflation of food prices when and if food imports are proscribed.
With Benin and Togo posturing themselves as entrepôt states to Nigeria - where Nigeria’s manufacturing and agro production distortions are actively exploited, Nigeria’s consumption habits over the last three decades has been shaped by its over-dependence on imports from the re-exports of these two neighboring entrepôt states (in particular) into the country.
Given the significance of food import via the entrepôt states for meeting the observed supply gap, abrupt closure of the land border cut that supply channel, further entrenching the observed supply gap. This is where the excess demand is now driving up prices.
For a country with the highest number of extremely poor people in the world, any significant spike in food inflation can cause devastating effects to its already poor population, making social upward mobility more difficult. Hence, policies that further reduce purchasing power predispose the poor to higher vulnerability.
The core question on the national discourse table is what exactly this land border closure aims to achieve – government claims the policy will help curb smuggling of goods through its land borders thereby bolstering domestic food production and national productivity levels in all sectors.
This goal of the government in particular, indirectly implies the ineffectiveness of its customs and immigration service especially with the inability of the country to protect its borders and effectively enforce import restrictions on certain goods. It is not likely that this border policy will achieve its end-goal in the short-term or in the long-term as even with the blanket ban on imports through its land borders, bolstering domestic food production and raising national productivity levels almost immediately will be extremely difficult to attain due to the structural problems abound in the country.

Getting it right
To achieve this set out goal of curbing smuggling and bolstering domestic capacity to attain national productivity at all levels, there should be a multi-pronged approach from government: to improve the capacities of its customs and immigration services, embark on land reforms, improve access to micro and macro-credit for farmers and entrepreneurs, enhance accessibility to affordable and reliable electricity as well as incentivize private sector investments. This is the first step to getting things right – by ensuring government policies improve lives.

Conclusion
With Nigerians already feeling the negative consequences of the land border closure – rising food inflation which in turn is reducing their relative purchasing power, it is important for government to rethink its border policy as it doesn’t sufficiently address the causal factors for irate smuggling and dwindling national productivity in the country.

Researchers will examine whether and how the demand for improved learning drives educational systems to change in Nigeria.

The RISE Country Research Team in Nigeria will examine the interplay between parental aspirations, community engagement, local politics, and educational outcomes in Nigeria. The goal is to understand how parents, communities and students can influence school governance and education policy at local and national levels. Researchers will then examine the extent to which such engagement leads to improved student learning outcomes.

A unique aspect of the four-year, £3 million project is the emphasis on the demand side of education (as evidenced by pressure from parents, the local community, and students) rather than on the supply side (through, for example, financing for school materials, teacher training, and building classrooms). This focus contributes to a new perspective on how to reform systems of education, an issue that speaks to the public policy agenda in Nigeria and elsewhere.

Research questions include:

• How can the demand for education (i.e., student motivation, parental investment, and community engagement) be harnessed to strengthen school governance and so that learning outcomes improve and education is more equitable among diverse populations?
• What are the implications of providing inclusive education on learning outcomes across gender, ethnic, and geographical lines?
• How can aspirations be engineered and maintained through peer effects, particularly through a program like the National Youth Service Corps?
• Can an implicit social contract involving education stakeholders improve school governance and learning outcomes?
• What is the long-term impact of Mission Schools and the Free Primary Education reform on contemporary education outcomes and intergenerational mobility? How have these programs influenced the spatial and intergenerational diffusion of education? What are the historical roots of education inequality today?

Context

Experiences in Nigeria underscore the importance of understanding the answers to these research questions. Nigeria faces the task of providing quality education to its rapidly growing population of young people. More than 10 million primary school-age children are not enrolled in school. Among those who are enrolled, roughly a quarter do not complete primary school (UNESCO, 2012). At the same time, Nigeria needs to improve the quality of basic education. Estimates show that fewer than 8 percent of teachers in public schools are able to meet the minimum qualifications (scoring 80 percent or above) on a test of primary school-level maths and English. Moreover, teachers are frequently absent, missing an estimated quarter of school days (Wane, 2014).

At the same time, the Nigerian education system faces challenges in ensuring equitable education and learning outcomes across gender, ethnic and regional lines. Significant disparities are evident. For example, female literacy rates range from 35 percent in the north to 90 percent in the south; male literacy rates range from 69 percent in the north to 95 percent in the south (DHS 2008).

Several basic education expansion programmes established in Nigeria since the 1970s have largely failed to meet targets for achievement (Gershberg et al., 2015). Recent education reforms set up school-based management committees composed of community and parent representatives, at least 42 percent of whom must be women. However, a majority of schools have yet to comply with legislation mandating the establishment of such committees; and, in schools where the committees have been created, effectiveness varies widely.

The Research Agenda

The research will build on insights from a number of historical and current Nigerian education policy outcomes to investigate the extent to which demand-side mechanisms matter for learning outcomes. Among the areas of investigation are how electoral politics, social movements, and activism at national and state levels shape policies. The study will draw on historical educational reforms, and then will dig deeper into the reasons why changing demand influences system change (through aspirations, awareness, and action) by examining a number of current policy imperatives.

Components of the Study

The RISE research in Nigeria will examine five key educational issues, using qualitative and quantitative methods:

Mission and Colonial Schools: The research will examine the nature and changing patterns of parental involvement in education from the earliest forms of schooling (missionary and colonial government schools). The introduction of formal education in Nigeria occurred with the arrival of missionary schools. The research will examine the reasons why early missionary schools were successful, and how demand for education may be harnessed to replicate this success. Results also promise to offer guidance on the possibilities for reforming the mission school-community engagement model in ways suited for modern Nigeria and how this might help address problems related to inequities in learning outcomes.

Free Primary Education: The Free Primary Education programme, initiated in 1952 by the government of Nigeria’s western region has been described as “the most unprecedented educational scheme in Africa South of the Sahara (Fafunwa, 1974).” The scheme, which established free compulsory primary schooling, went into effect in 1955 and continued until 1966. Despite high costs and implementation challenges, the programme was viewed as a success ̶ largely, it is thought, because of unique political grassroots mobilisation, which gave the programme popularity and buy-in even before its launch. The RISE researchers will study the long-term impacts of the programme and the socio-political mechanism of this effect, particularly on political leadership. The study will also examine the effects of teaching in the local language on national identity, education demand, and school effectiveness, and how the effects vary between groups in the region.

National Youth Service Corps: The National Youth Service Corps (NYSC) scheme was created in May 1973 to encourage the “development of common ties among the youths of Nigeria and the promotion of national unity.” The scheme involves the random assignment of Nigerian graduates from universities and polytechnic institutes to communities outside of the students’ states of origin. Most students receive assignments to teach at primary and secondary schools. The research will study the role of the “corpers” in local and school governance, and explore how their presence affects the demand for education and school effectiveness. The research will also explore the effects of corpers as student role models. The aim is to see whether the corpers increase their pupils’ effort and aspiration.

School-Based Management Committees: In 2005, the National Council of Education launched an initiative mandating that school-based management committees be established at all primary and junior secondary schools in the country. The objective was to encourage accountability and decision making at the local level by creating a bridge between government, communities, parents, and children. The 12- to 19-member committees are drawn largely from civil society, and faith-based and parent-teacher organisations; at least 42 percent of the members must be women. Anecdotal evidence suggests that these committees have had varied success rates (more than half of the schools have yet to establish them). RISE researchers intend to study how the committees enable parents and community stakeholders to engage with schools and local political actors to increase school inputs, especially for girls and disadvantaged groups. The analysis will examine how the performance of committees can be enhanced through engagement with the local political process. The aim is to determine how and whether such engagement leads to improved student performance.

Political Economy of Education Reforms: Following the general elections in early 2019, the team will take advantage of the opportunity to investigate the electoral cycle to study how demand-side factors can influence electoral outcomes and ultimately education outcomes. Researchers will look at the role of political engagement and the local conditions that can lead to the success of top-down reform. The team will also look at the impact of the reforms on learning outcomes and school management and whether accountability through elections is the key to ensuring reforms are implemented successfully.

This article was first published on Rise programme

Southern Voice’s State of the SDG’s Initiative (SVSS) provided a unique platform for six selected teams from the Global South to explore global factors affecting the implementation of the 2030 Agenda. Studies came from Bolivia, Ghana, India, Nigeria, Peru and Sri Lanka. To increase the impact of this research, each team appointed a person to implement a robust communications strategy together with the Southern Voice Secretariat.

A first step was the Southern Voice communications workshop in November 2018, held in Bangkok. It provided a platform for communications experts from the six selected think tanks to improve existing skills and learn about new tools. The aim was to strengthen the communications strategy and outputs of each team’s SVSS research. It was also an exciting opportunity to meet and share experiences in person with peers from different countries.

Learning lessons included: using pictures to enhance presentations rather than using too much text, creating podcasts to transmit research content more conversationally and informally, as well as learning how to write compelling and relatable blog posts or articles. The seminar also served as a basis for starting an active community of communications experts from member think tanks of the Southern Voice network. A year later, we feel that our communications outputs have improved and we can show that the findings of our research teams are being discussed in several national and international meetings. Learning how to communicate better in different ways has played a vital role in addressing the information needs of policymakers.

Based on our experience this past year in Nigeria and Peru, at the Centre for the Study of the Economies of Africa (CSEA) and Grupo de Análisis para el Desarrollo (GRADE) respectively, we can say that some of those information needs include:

• Detailed information on the heterogeneities and situation of the left behind. It helps policymakers to prioritise which marginalised groups might require SDG-related interventions. In the case of Peru, there is a lot of data and monitoring on SDGs. However, the indicators are only estimated and monitored at the aggregated level. In this sense, GRADE’s most important contribution was the production of a baseline of the left behind in the fields of work and education with the SVSS study.
• Empirical evidence on the dimensions and drivers for achieving quality education. In Nigeria, the government is keen on making the SDGs. CSEA’s study provided the evidence needed to help bridge the gap between research outcomes, policies and implementation.

To increase this impact, at CSEA, we worked hard on expanding our visibility and network among critical stakeholders. We did this through continuous engagement and collaboration, but also by boosting our social media presence, increasing our newsletter frequency and partnering with relevant government and development agencies and other institutions. These engagements are also meant to foster the debates around the SDGs and enhance government and stakeholders’ action.

Meanwhile, at GRADE, we strengthened our dissemination activities on SDGs by engaging with local and international organisations and policymakers. We hope that our profiles of those left behind will be used as tools. They can help in the design of policies for improving the lives of people who are currently left behind. To promote this, we recently discussed our findings at the 2019 annual congress of the Peruvian Association of Economics and the UN 2019 Global Goals Week.

Making SDGs visible

In addition to a greater emphasis on fulfilling policymaker’s information needs, achieving the sustainable development agenda requires a significant focus on SDG visibility. To engage stakeholders and call citizens to action, effective communications should be a strategic priority of every organisation working on SDGs.

As think tank communicators, we have the opportunity to enhance research findings with creativity (using digital and traditional formats) and effectiveness (aiming for higher impact). The more people of all areas of life that are aware of the 2030 Agenda, the more accountable governments will be towards ensuring the implementation of the SDGs.

Through the SVSS project, the Nigeria and Peru teams had the chance to collaborate in strengthening their communications strategy for the SDGs. The initiative facilitated peer-learning and sharing best practices. Training activities like the Bangkok workshop and recent international meetings were great ways to sustain the knowledge exchange. Now each team can keep working on strengthening the engagement between evidence and policy in their respective countries.

This blog was first published on southern voice

Nigeria’s power sector was unbundled and partially privatized to establish a competitive market intended to improve management and efficiency, attract private investment, increase generation, and provide reliable and cost-efficient power supply. However, five years later:

• Operational generation capacity has dropped by 33 percent
• Only 23 percent of the cost of electricity production is recovered¹
• Revenue has fallen by 85 percent

Primary Challenges

• Flawed Privatization Model: Expectations were overly-optimistic. Erroneous assumptions included revenue-sufficient tariffs, stable transmission infrastructure; an efficient bulk trader; government institutions would pay their electricity bills, and that the DisCos would be financial viability. The bidding process often penalised or eliminated conservative bidders with more realistic analyses.
• Low Electricity Pricing: The Multi-Year Tariff Order (MYTO) became too low to cover costs due after insufficiently accounting for increasing costs of generation and gas, and a weakening exchange rate for the naira. Cost recovery, and therefore return on investment, became impossible.²

• Gas Supply Shortage: Post-privatization GenCos depended on gas for 80 percent of grid capacity, but gas infrastructure is weak, suffers from vandalism, and is vulnerable to Niger-Delta militancy.³ Major capacity shortfalls followed.⁴
• Liquidity Crisis: With GenCos and DisCos unable to recover costs, they were then unable to repay the $780 million borrowed from Nigerian banks for the initial purchase.^5,6 Subsequently, the banks have been unwilling to provide further loans to GenCos and DisCos that would allow for investment in infrastructure improvements.

Achievements: Nonetheless some milestones have been achieved since privatization including:

• Increase in installed capacity for power generation;
• Expansion of the transmission network;
• Some roll out of meters and modest progress to boost utility revenues;
• Greater demand for power sector equipment that led to private sector investments and participation across the value chain.

Way Forward: To ensure sustainability and minimize debt accumulation across the value chain, Nigeria may need to:⁷

1. Implement a true cost-reflective tariff to encourage more efficient service delivery and enable cost recovery for the investors in the sector.
2. Sell some government shares to raise capital and take steps to attract new investors.
3. Bolster the distribution network by expanding metering, completing customer and asset enumeration, and conducting energy demand studies.
4. Reform the gas sector by adjusting gas prices to be cost-reflective, clearing outstanding debts to suppliers, signing pending supply and transportation agreement, and reinforcing risk mitigation requirements and gas supply commitments.

Endnotes

1. Nextier Power (2018), “The Aftermath: Moving Forward”
2. Premium Times Nigeria (2017) “Privatisation of the Power Sector: What Went Wrong?”
3. The Advisory Power Team, Office of the Vice President (2015) “Nigeria Power Baseline Report,”
4. Nextier Power (2018) “The Aftermath: Unforeseen Contingencies”
5. Stillwaters Law Firm (2014) “IFLR1000: Overview of the Nigerian power sector reform”
6. Calculated based on the exchange rate as at 14th December 2018: US$1 = N363
7. Nextier Power (2018), “The Aftermath: Moving Forward”

This article was first published on Energy for Growth Hub