AFC: Interest Groups Selling Generators, Diesel Against Electricity Supply in Nigeria

*Tasks FG on restructuring power sector to attract investments

Dike Onwuamaeze

The African Finance Corporation (AFC) has declared that there are interest groups that prefer the importation and sales of generators and diesel than allowing Nigeria to supply adequate electricity to its citizens and businesses in the country.
This declaration was made yesterday in Lagos by the President/Chief Executive Officer of AFC, Mr. Samaila Zubairu, who delivered the Manufacturers Association of Nigeria’s (MAN) “4th Adeola Odutola Lecture/President Luncheon” themed: “An Intentional Development of the Nigerian Manufacturing Sector.”

Zubairu, represented by the Executive Director/Chief Investment Officer of AFC, Mr. Sameh Shenouda, identified the Nigerian power sector as one of the most challenging sectors in the country and wondered how 240 million people would have only 4000-megawatt electricity supply from their country’s national grid.

He said: “I am going to be honest with you. There are interest groups that prefer to sell generators and diesel than for the country to have electricity supply. You have to be honest about the problem so that you can tackle it.”
He also called for the total restructuring and reform of the country’s power sector before it could attract investments for its development, noting that the attempt to restructure the distribution companies few years back has not done very well.
The AFC stated clearly that it would not channel finances to the power sector until a lot of work is done in that sector by the government.
Zubairu said.: “I think we will be happy to invest in the power sector. But there is a lot of work to be done by the government before it would attract a lot of investments.  

“Collection is problem. Power theft is a problem. However, if there is an opportunity to build a power plant that sells directly to the private sector and does not go through the Independent Power Project’s (IPP) structure, the AFC will be happy to look into it.
“But to build a large-scale infrastructure power plant in Nigeria before the sector is reformed is a big risk that we cannot support.
“What we will be happy to do is to participate with government and anyone that is interested in sharing ideas and experiences in restructuring the sector first.”

He noted that the Nigerian manufacturing sector is at its turning point because of the potentials available in the country in spite of the foreign exchange, cost of funding and policy issues the economy is facing presently.  

According to him, “if Nigeria can capture the gas that is being flared and direct the gas to the power sector; if you restructure the power sector; if you add value to the local raw materials then the turning point will happen.”

He remarked that Africa is endowed with a lot of mineral resources “but what we are doing wrong is that we are exporting them raw. Our challenge is how to add one, two or three steps in the ecosystems’ (value chain).”

In his goodwill message, the Minister of Finance, Mr. Wale Edun, who was represented by a director in the Ministry of Finance, Mr. Basheer Abdulkadir, said that the federal government and the private sector must work together to create supportive environment that would advance the country’s manufacturing sector.

Edun said that the government remains committed to creating a sustainable macroeconomic environment with supportive fiscal and monetary policies that are aimed at ameliorating the current economic challenges.

He said: “The Federal Ministry of Finance is dedicated to supporting the manufacturing sector by improving the macroeconomic environment.”

A former Minister of Industry, Trade and Investment, Chief Kola Jamodu, used the occasion to declare that one of the biggest problems of local manufacturing in the country today is the activities of investors in the Export Promotion Zone (EPZ).

Jamodu said: “They have all the benefits. They do not pay taxes. They are supposed to export their finished products and bring in foreign currencies.

“But they are one of the biggest problems facing manufacturers today. It is a well-intentioned by the government but they have derailed and are now a very big challenge to local manufacturing.”