Energy sustainability is critical to fixing other sectors, says Abazie
For other sectors of the economy to flourish and perform optimally, Nigeria must get its energy framework right.
The Chairman, Strides Group, owners of Strides Energy & Maritime Limited, Moritz Abazie, said this in a statement.
“Energy for instance, is a great input to other infrastructural subsectors, and so have a very high social impact; we cannot make any meaningful growth or improve income level or job creation in the economy without fixing the energy supply and that is how it works and as well affect other sectors of the infrastructural layout,” he said.
Speaking on the timeframe within which the country should get its infrastructural framework right, Abazie said it was not feasible to put a time frame to that because there were so many deciding factors at play in determining the infrastructural investment growth of any nation.
He said in Nigeria’s case, the dynamics was a bit complex;, as the strategy formulation is something that the nation must get right or “we have always gotten right as a nation, but the execution of the blue print is a problem.
“We need to gauge the political and institutional capacity and design a medium and long-term strategy. So, it’s all about the political will and institutional capacity; even when the political will is there, do we have the institutional capacity too?
“If these two things are not aligned, we cannot be able to put a time frame, as it is a project execution issue that starts with policy formulation and determined by political will.”
Speaking on the role of public-private partnerships in the quest to grow national infrastructural base, he said government should partner with the private sector to create a transparent and sustainable model that is not susceptible to the political fabrics of the nation.
The Strides Group boss added, “The government can take a fund for instance, set up a management for it, invest or provide its own contributions into that fund, determine the areas it wants to intervene in terms of infrastructure, and design investment packages that will be attractive to private investors.
“The goal of private investors is to make profit; while the goal of government is to provide infrastructures that will activate growth in the economy.
“So, the alignment of these two goals and objectives creates a business case – if the government provides 30 per cent and private investors provide 70 per cent, for instance, and investment is made, and the business takes off, the government can also divest and commit the recovered resources into similar ventures of this nature.
“That is one model that can be used to reduce risk perception of investors as a result of government presence.”
According to Abazie, it is widely recognised and well understood by all development economists that availability of quality infrastructure can directly raise the productivity of human and technical capital, adding that without the right infrastructural activates, the economy will be starved of infrastructure, human development will be retarded and the economy will be unable to attract investments.
He said the sole reliance on oil and gas revenue by the country for meeting all its needs had not served Nigerians well over time, saying: “if you balance the nation’s oil and gas wealth against its total population, we cannot be said to be oil and gas rich.
“But even at that, with our present circumstance, our gas sector can still be developed further as there are more potential in our gas sector, which we are yet to develop effectively.”
According to him, there are reasonable opportunities to maximising Nigeria’s revenue from the sector by removing impediments to investment, which we are yet to do.
He, however, lamented that the government lacked the capacity to make any meaningful investment in infrastructural capacity without relying heavily on debt funding.
He explained, “This is because currently, we are finding it difficult to cover our current expenditure or provide necessary funding for our security challenges.”
We cannot say that the oil revenue will continue to provide us with necessary leverage to develop our infrastructure.
“The option available now is to open that sector up for private investment by putting together investment packages and economic architecture that makes it attractive. We are relying so much on debt funding and that is a difficult approach because we are increasing the debt-servicing burden of the government.
“It can only whittle down the capacity of government going forward, to even meet its recurrent expenditure. We need to look at other economic models for doing this without over burdening the nation with debts.”
No comments yet