An energy expert, Mr. Ggenga Olawepo-Hashim has called on the federal government to target electricity generating capacity of 160,000 megawatts in the next 10 years so that Nigeria can be at per with South Africa’s per capital generation.
Olawepo-Hashim, who is also a presidential aspirant and former Deputy National Publicity Secretary of the Peoples Democratic Party (PDP), also urged the federal government to eliminate current inefficiency in electricity distribution and establish a fair and consumer friendly electricity tariff that will as well be cost recoverable to attract an estimated $ 200 billion investments from both private and public sectors for the next 10 years.
In a paper titled “Agenda for All Round National Development,” which he delivered at a recent public lecture organised by the College of Postgraduate Studies, Obafemi Awolowo University Ile-Ife, Olawepo-Hashim argued that building an industrialised and modern economy would be impossible without simultaneously directing national energy to rapidly increasing electricity generation, distribution and transmission.
According to him, the current national electricity generation capacity of about 6,000 megawatts is too little a capacity for any meaningful development compared to South African’s generation capacity of more than 40,000 megawatts capacity.
He suggested that in order to direct available finance in the country for key task of industrialisation; the country must prioritise available finance for modernising the country’s infrastructure.
“The trend in which 80 per cent of revenue in the nation’s budget has been disproportionately consistently applied to recurrent expenditure; whilst capital expenditure takes the back seat at 20 per cent must be discounted. To begin with, it must be the goal of public finance to allocate 50 per cent of revenue to capital expenditure,” he said.
He also recommended a complete change in the budgeting system from the current envelope system where annual budget are merely a repeat of previous year sectorial allocation with variations, accounting for inflation.
“Budgeting must become NEEDS-BASED, driven by national economic priority, based on a new plan to build modern infrastructure, make the needed social investment for the country and industrialise Nigeria,” he added.
He also argued that another element of financial reform that Nigeria needs to undertake is to ensure banking and financial sectors make capital available to the real sector of the economy.
“Whereas, monetary policy formulation is within the competence of the Central Bank which has autonomy over this matters, the necessary coordination between the fiscal and monetary Authorities must be generated to allow the new reform, which must also include bringing down the present unsustainable lending rate to a single digit. At 17.5 per cent – 25 per cent lending rate in the Nigeria financial market, no meaningful industrialization can take place as industrialists and manufacturers from other countries take money for business for as low as four per cent. In Malaysia, prevailing lending rate is 4.9 per cent; China is 4.35 per cent; India is 9.45per cent; South Africa is 10 per cent. Nigeria must move within the single digit band,” he explained.
Olawepo-Hashim further stated that Nigeria as a country has been pulling apart because of rising incidence of poverty, squalor and unemployment, stressing that inequality and the attendant misery have been rising, occasioning massive social instability and insecurity.
“The reason why Nigeria is experiencing massive social upheavals is not just because it has low income per capital but due also to the fact that available income is not being applied averagely for the welfare of all. Various African countries with half Nigeria’s income per capital post better development indicators,” he said.