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Government should hands-off power completely, urges NCPN

By Kingsley Jeremiah, Abuja
25 December 2019   |   4:14 am
Although some stakeholders in the power sector had repeatedly clamoured for continuous involvement in the power, especially to address its dilapidated state, Nigeria Consumer Protection Network...

Although some stakeholders in the power sector had repeatedly clamoured for continuous involvement in the power, especially to address its dilapidated state, Nigeria Consumer Protection Network (NCPC), has insisted that unless government hands off the business, the sector may remain comatose.

A legal practitioner and President of NCPN, Kunle Kola Olubiyo, stressed the need for the Federal Government to hands off from every segment of the value chain – generation, transmission and distribution.

In 2013, the Federal Government took a bold step of privatising the power sector. The change in ownership was against the backdrop of the hopeless nature of the sector, which affected standard of living, and crippled economic growth with only a miserable 4,000 megawatts (MW) of power available to a population of about 180 million people.

Five years down the line, the sector has been trapped in a dilemma with available generation still standing at around 4000MW for over 200 million people. The control of electricity generation is currently in the hands of the private sector, but government wholly controls the transmission segment, and owns 40 per cent stake in the distribution companies.

While government has equally staked about N1.2 trillion in making the sector work despite unaddressed challenges, Olubiyo argued that said government’s presence in power is only being sentimental.

“We don’t need to be sentimental about this. Government should pull out completely from power generation, transmission and distribution,” he said.
Olubiyo also canvassed for a total review and overhaul the institutional framework, regulatory framework, and legal framework guiding the sector, adding that there was a need to look at ease of doing business in the power sector.

He said: “As it is now, investment in the Nigerian power sector is increasingly toxic. The present outlook is a disincentive to Foreign Direct Investment (FDI), and not even the local banks will put in their money. The Business plans submitted by the operators in the power sector to the local banks on the basis of which loans were given are not being strictly adhered to.”

Olubiyo also called for dilution of the stakes, saying: “Government should pull out of the 40 per cent equity in the power sector, and redirect them to infrastructural development in Off Grid Renewable energy sources to grow the economy.

“The equity stake holding of the power sector should be diluted to 30 per cent to the present owners and 70 per cent to the public quoted through Initial Public Offering (IPOs).”

He equally urged the Nigerian Electricity Regulatory Commission (NERC), to allow 70 per cent willing-buyer-willing-seller load utilisation by the DisCos, which should be on negotiation and tied to growth and development, while 30 per cent could be sold on regulated regime.

He said: “This will upscale load utilisation and profitability of the Nigerian electricity market against the present structure, which is a mixed bag.”

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