Accused of interference, Nigerian govt explains role in removal of AEDC management

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The Nigerian government on Wednesday tried to walk back its earlier announcement on the removal of the management of the privately-owned Abuja Electricity Distribution Company, after facing criticisms over a decision it lacks the powers to carry out.

Analysts accused the government of interfering in the country’s electricity distribution sector, which it ceded control to private owners eight years ago. They warned that interference risks scaring away investors and worsening the fortunes of the troubled industry.

In a response, the Minister of Power, Abubakar Aliyu, said the decision to fire the management of the AEDC was taken by the company’s shareholders and approved by the government as the regulator. His ministry earlier on Tuesday said President Muhammadu Buhari demanded a new management for the firm, in which the government holds only 40 per cent equity.

“The presidential directives as conveyed also directed the Bureau of Public Enterprises to set up a new management team of the AEDC,” his media aide, Ofem Uket, had said in a statement.

“In a memorandum of understanding MOU, jointly signed by the minister of state power Goddy Agba, the chairman Nigeria Electricity Regulatory Commission NERC, Sanusi Garba, director-general, Bureau of Public Enterprises, Alex Okoli, comrade Joe Ajaero on behalf of the union, the federal government ordered the suspension of the strike [and asked to] given 21 days within which the outstanding emoluments and entitlements of staff will be paid.”

The statement unsettled operators in the sector as such a decision could only be taken by the majority shareholders of the firm. More so, no law allows the government to take over the affairs of private firms in the industry.

“The president has no such powers,” said Sam Amadi, a former chairman of the regulatory body, Nigerian Electricity Regulatory Commission. “Even if the federal government has a 40 per cent minority share in the assets, those shares are held for it by the Bureau public Enterprises that it has a position on the (firm’s) board. So the best we can do is to use the board membership to push policies to change.

“And the fact that the federal government has the power of sovereign doesn’t change the fact that the only way you can protect public interest in the sector is through the regulation, any other action will appear like nationalising back those assets.”

AEDC Electricity InstallationAEDC Electricity Installation

AEDC is one of 11 electricity distribution companies that emerged from the 2013 privatisation of the sector. It is led by a consortium of investors, KANN, which holds 60 per cent of its shares. Since coming on stream, the AEDC, like most other distribution companies, has struggled to improve power supply to its consumers and failed to break even.

The AEDC has also faced internal problems as its stakeholders have fought over the company’s ownership, with the fallout felt in the operations of the firm.

ALSO READ: Buhari suspends AEDC management as firm faces internal crisis

On Monday, workers at the company shut down electricity facilities, throwing the federal capital, Abuja, Kogi, Nasarawa, Niger, and parts of Kaduna into darkness. They accused the company of failing to remit their pension contributions and other entitlements for nearly two years.

Other officials told PREMIUM TIMES that although the company has been making such deductions from staff’s salaries, it claims it is not financially strong to pay them to pension authorities.


On Tuesday, the company’s spokesperson, Oyebode Fadipe, declined comment when reached by PREMIUM TIMES.

The government’s intervention on Monday helped halt the strike.

In a statement Wednesday, the Minister of Power, Mr Aliyu, said UBA, lenders to the majority shareholder at AEDC, had taken over the electricity firm after a feud over its ownership had deteriorated.

“The situation has currently deteriorated due to lack of access to intervention lending to a point whereby legitimate entitlements of the staff are being owed thus leading to service disruptions on 6th December 2021 within its franchise area. The Federal Ministry of Power has since taken the initiative to engage organised labour and electricity service has since been restored in the FCT and the states served by AEDC,” he said.

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Mr Aliyu said the bank, in exercising its rights over the shares of KANN Consortium in AEDC, took over the shares of the obligor in the AEDC.

“This takeover of the majority stake in AEDC by UBA has consequently led to the reported changes in the management of AEDC,” he said.

“The changes in shareholding in AEDC and the appointment of an interim management for AEDC by the shareholders has been endorsed by the Nigerian Electricity Regulatory Commission (the industry regulator) and the Bureau of Public Enterprises (“BPE” as co-shareholders in AEDC).”

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