Tony Elumelu, the chairman of Transnational Corporation (Transcorp), has urged the federal government to restructure the electricity industry and sell transmission lines to boost the country's flagging economy.
He stated in a Bloomberg interview that the industry's growth is hampered by a lack of liquidity in the electrical market and inadequate transmission lines.
Elumelu, also the chairman of the United Bank for Africa (UBA), said that a bad energy supply causes a low production level in the nation.
He stated:
“The currency crisis is a sign of many things. As a country, we can’t produce well enough despite our natural resources. The reason is lack of electricity,”
Need to attract investors
Nigeria sends less than a third of the 13,000 megawatts of electricity it generates to the grid, leaving most Nigerians dependent on home generators.
Elumelu said the way out is for President Bola Tinubu's government to attract investors to develop the nation's enormous gas reserves to fuel power stations and allow the private sector to manage the transmission lines.
Experts recently emphasized that Nigerian electricity companies need new investors to revitalise the industry as they are now short of an estimated N2 trillion ($2.5 billion) in capital.
In an interview, Olu Verheijen, an adviser to President Bola Tinubu on energy, said the companies are over-leveraged and under-capitalised.
According to Bloomberg, due to poor pricing, inconsistent revenue collection, and a decaying national system, most people in the most populous country in Africa now generate their electricity with loud generators, while Nigerian government has paid over $120 million to offset some of the debts owed to gas firms to enhance electricity generation.
The director of Decade of Gas Secretariat, Ed. Ubong confirmed this at the ongoing 7th edition of the Nigeria International Energy Summit (NIES 2024) in Abuja on Thursday, February 29, 2024.
He said the government is also working on a scheme to curtail failures in the system.
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