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Babatunde Fashola’s Challenge: Power, Works and Housing

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Merging the power portfolio with works and housing is certainly one of the surprises that President Buhari sprang on Nigerians. While works and housing was a single ministry before it was split by former President Olusegun Obasanjo, analysts are at a loss on the relationship the two have with power. But the president might be looking for a situation where a tested person would handle the three portfolios that have far reaching implications for the success of his administration with regards to clear deliverables in infrastructure development. Power has been a challenge in the country, while the state of Nigerian roads are appalling, even as the nation’s housing deficit has remained unacceptable.

Herein lies the choice of former Lagos State Governor, Mr. Babatunde Fashola, as the minister of this new ministry. With his acclaimed success in Lagos particularly in the area of infrastructure development, including the establishment of small independent power plants to power government services, and regulatory enforcement, the former governor looks primed for the job. He has to carry on with the reforms in the power sector and consolidate on its privatisation.

Fashola has the task of enforcing a regulatory regime that assures efficient generation and distribution of power to Nigerians at a price that is acceptable to operators and consumers. With total installed capacity of over 8,000MW, the new minister has the task of not just ensuring full capacity utilisation beyond the current 4,600MW but design policies that would fast-track the attainment of 20,000MW planned for 2020. To achieve this, he needs to tackle a couple of issues, including appropriate pricing, gas supply to power stations, and the inadequacy of the transmission grid. In addition, he would need to strengthen the regulatory agencies, including the Nigerian Electricity Regulatory Commission (NERC) and Nigeria Electricity Management Services Agency (NEMSA).

Fashola’s task on works is no less daunting. With most of the 35,000km of federal roads yelling for attention in the face of an economic downturn, the new minister would have to design a road management policy framework that would assist the federal government tackle this challenge and attract more private sector involvement in roads development.

Fashola would also have to worry about reducing the housing deficit in the country. The financial outlay for bridging the 17 million housing deficit is put by the World Bank at N59.6 trillion. How does the country handle that? The Goodluck Jonathan administration’s response was to restructure the Federal Mortgage Bank and also establish the Nigeria Mortgage Refinance Company, with a charge to encourage and promote home ownership in Nigeria by providing financing to the mortgage lenders, thereby increasing the availability and affordability of mortgage loans to Nigerians. Fashola would have to adopt this with some tinkering that would help Nigerians access cheaper finance to overcome their housing challenges.

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