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Government urged to allow 100% private sector participation in power sector

Some stakeholders on Thursday, September 20, 2018 urged the Federal Government to allow private investors’ full operation of the power sector to boost effectiveness and enhance economic growth.


Minister of Power, Works and Housing, Babatunde Raji Fashola (SAN)

The stakeholders suggested in separate interviews with the News Agency of Nigeria (NAN) in Lagos against the backdrop of the enormous challenges confronting the country’s power sector.

Mr Adekunle Sofunde, Chairman, Solatek Engineering Ltd, urged government to hands-off the operations of the power sector to private investors for more business competitive drive.

Shofunde said that such would a decision would allow Nigeria’s power sector to compete favourably with other countries.

He said that government should only regulate and not be involved in running power operations, adding that the sector could perform better if solely managed by private sector.

According to him, it is disappointing that an economy of over 190 million generates less than 10,000mw and distributes even less.

“Continuous tinkering with the structure of power supply and distribution and close to 20 billion dollars expended since 1999 has only brought darkness, frustration and misery to Nigerians.

“Nigeria imports over 70 per cent of its petroleum products requirement, while electricity supply is inadequate at just about 4,000mw now.

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“Over 20,000mw of power is generated daily from fossil-fired plants to meet up with electricity demand,’’ he said.

The expert urged government to embrace renewable energy to fill the gap created by this deficit, adding that power production and distribution in the country were far less than what was needed.

The Director-General, Textile Manufacturers Association of Nigeria, Mr Kwajaffa Hamma, said business competitiveness could only be driven when the power sector is being 100 per cent managed by private investors.

He urged government to ensure that the power sector tariffs become competitive as obtained in other countries such as Egypt Ethiopia and South Africa.

“That is the only way to move the sector forward; we cannot export our products (energy) outside the countries because it’s not competitive.

“Seventy-five per cent of all generating output in Nigeria does not reach the intended end users.

“While the minimum capacity requirement for Nigeria is put at 50,000mw, we are currently producing less than 5,000mw.

“Eight in 10 Nigerians rely on the alternative source of the power supply as erratic power supply persists.

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“Eighty-five per cent of Micro Small and Medium Entrepreneurs (SMEs) rely on power generators for electricity,’’ he said.

Mr Muda Yusf, Director-General, Lagos Chamber of Commerce and Industry (LCCI), said “Power sector is critical to the development of the country.

“Most often, there is often a conflict between development objectives and commercial objectives.

“I believe the government still needs to provide some resource support and generous fiscal incentives for investors in the sector.

“What should be avoided is public sector management of such enterprise. We do not have a record of good corporate governance in most public enterprises.

“A strictly private sector driven power sector, however, poses the risk of exclusion of some segments of the population.

“Many locations and communities may not be served because of the commercial viability of such provision.

“There should, therefore, be a model that would cater for the economically vulnerable segments of the society.

“This is the scenario currently playing out in private sector provision of education and health services.

“Private schools and private hospitals are not affordable by majority of the citizens,’’ NAN quotes Yusuf said.

Mr Biodun Ogunleye, Managing Director, PowerCap Ltd, was, however, opposed to total handing over of the sector to the private sector, saying that such could result to abused of power.

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Ogunleye said that government has a vital role to play in the power sector, adding that there is no country in the world that hands-off power sector totally to private investors without regulating and controlling the sector.

He said: “I am not aware of countries that essential services like power is not regulated, am also not aware there is no regulator like NERC within the structure.

“Between NERC and CBN there will also be a bulk buyer so that there would be a bulk market, but government should not involve in retail but plan on how much capacity as a nation would should aspired to have.

“Government should point the direction of what the private sector would go, because if you allow the private sector they will only do certain things that would only favour them.

“On Discos, government had never appointed management for Discos but took board position, and they are civil servant that are basically checking and taken reports, not aggressively involved in their operations,’’ he said.

By Yunus Yusuf


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