Politically speaking, the provision of public utilities like water, electricity for public consumption is capital-intensive and it is desirable for such services to be paid for in order to sustain and even improve such services.

However, the reality in our country today is that most Ministries, Departments and Agencies (MDAs’) default in fulfilling their financial obligations by failing to pay for such services. It is in line with this bad behavior that the Transmission Company of Nigeria (TCN) recently disconnected the Ajaokuta Steel Company from the National Grid over an electricity debt of N30 billion to the Nigerian Bulk Electricity Trading Plc (NBET).

In his reaction, the Minister of Steel Development, Shuaibu Audu, raised concerns while addressing reporters in Abuja on Thursday, 11/01/2024. “As we speak, Ajaokuta has been disconnected by TCN and N30 billion is at stake”. He went further to pose the question, “Do you think people take it seriously if a giant place like Ajaokuta has no electricity”? Added to that, a place that has not been in production and owing so much, what’s the explanation?  Although the worries expressed by the honourable Minister are genuine, they are internal matters that require investigation as already promised by the Minister.

This development is disheartening because it is happening at a time when the national economy is going south and attempts to revamp the Ajaokuta Plant are ongoing because of the positive impact a functional Steel Plant will have on the economy in terms of employment generation, earning revenue, reducing the prices of steel materials used in the building and construction sector amongst others. The situation is more disturbing because the current administration is interested in reviving Ajaokuta Plant as seen in the approval given by Mr. President for the restart of the light steel section of the Plant.

It should be noted that the focus of this article is not Ajaokuta Steel Plant but it only received so much attention because it is a recent event.

Most MDAs’ fall in this category of defaulting in fulfilling their financial obligations for services enjoyed by them and include military institutions, various ministries, hospitals, public organizations etc.

Since utility providers have their expenses to cater for, like salary payments, equipment maintenance/replacement and other overhead costs, payments for the consumption of these MDAs’ should be deducted at source and used to settle bills received from the utility providers. This is the most effective way to ensure that MDAs’ fulfill their financial obligations by paying for the services they enjoy from these utilities.