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LCCI urges FG to privatise electricity transmission company

By Bankole Orimisan
19 October 2022   |   2:34 am
The Lagos Chamber of Commerce and Industry (LCCI) has advised the Federal Government to privatise the Transmission Company of Nigeria and boost the nation’s economy.

[FILES] A power transmission line in Nigeria. SOURCE: Google

The Lagos Chamber of Commerce and Industry (LCCI) has advised the Federal Government to privatise the Transmission Company of Nigeria and boost the nation’s economy.

At the LCCI quarterly press conference held in Lagos at the weekend, the group argued that there was no justification for the government’s refusal to sell off the transmission segment of the power sector except to give room for vested interests at the expense of the country’s economic growth.

The president of the LCCI, Dr. Michael Olawale-Cole in his paper presentation, insisted that if the government had justifiable grounds to privatise the generation and distribution components of the electricity value chain, the same government should also know that it has no compelling reasons not to privatise the transmission segment.

According to him, “You will wonder the kind of logic that would justify a government that privatised the power generation and distribution because it was not capable of running them to keep the transmission component to itself. So, in plain language, there is no justification whatsoever for government to keep on holding on to the transmission component. We have recommended that government should privatise the transmission segment.

“Why is the NLNG so successful? It is because the federal government holds 49 per cent of its equity and gave 51 per cent to private operators in that industry that have the experience and financial and technical capacity of that industry. The world sees it as an international oil and gas business and it has access to finance from anywhere around the world. The NLNG does not depend on the federal government’s budget for all the projects that it has done. And the difference is two per cent.

“If the transmission is privatised with 49 per cent in government hands and 51 per cent equity with experienced transmission grid operators that have the financial and technical capacity to manage transmission grid around the worl, the story will become completely different.

The reason there are so many issues about transmission and privatisation is that that is the only opportunity left for vested interests to operate in that sector.”

Olawale-Cole explained that the LCCI had been championing the need for government to embrace equity infrastructure financing rather than borrowing and accumulating public debts.

He said: “When the chamber is speaking about using equity, rather than borrowing, it is not a complicated matter. Nigeria does not need to borrow to make any rail line. We do not need to borrow to build an airport. Most of this infrastructure is owned by private individuals including Nigerians in Europe. A Nigerian-led business owns the airport. The same Nigerian-led company bought a rail line in Italy. So, it is not necessary to borrow.

“When we say equity financing, we mean that the government has built the Lagos-Ibadan railway line. The government needs to remove its management from the Nigeria Railway Corporation and call those that run the best rail lines in France to acquire 51 per cent and run it.

“It is not necessary for our government to be running around the world begging for loans, it is not necessary. We have a fundamental market of over 200 million people that the whole world is looking for. Countries like France and Korea with much fewer populations run their trains profitably and know that they can multiply their profit 10 times by operating in Nigeria. Train companies from Korea, France, and Canada have applied for a license to operate in this country but they were turned down.”

Deputy President of LCCI, Gabriel Idahosa argued that the federal government has no business in business but should create the enabling environment for the private sector to operate.

He said: “Government has no business in business. Its role is to provide an enabling environment. The more the government makes way for the private sector, the better for the country.”