By Sunday Okobi
Following the recent global fall in oil prices primarily occasioned by the COVID-19 pandemic, the Chief Executive Officer, of a power generating company, Century Power Generation Limited, Dr. Chukwueloka Umeh, has says there is no better time than now for the Nigerian Government to take definitive and courageous steps towards diversifying its economy.
According to Umeh, who stated these during an online interactive session with the journalists yesterday, “In the face of the cyclic oil prices, we must now see a Nigeria without oil and immediately start diversifying to agriculture and manufacturing. In order to do this successfully, the gas and power industries need to be unshackled and supported to encourage substantial private investments and growth.”
While speaking further, Umeh lamented it is still unthinkable that despite the fact that Nigeria has the world’s ninth largest gas deposit, it still grapples with power generation and distribution issues in spite of millions of dollars spent on foreign experts, countless committees, public-private stakeholder meetings, among others.
He said: “Nigeria should essentially be a gas-producing country which happens to produce some oil. It is time to do things differently. We should stop the endless committee meetings, conferences and engagements. Pick a set of regulations, such as the ones that birthed the only project-financed power plant in Nigeria to date, Azura power; respect contracts and the rule of law to give local and foreign investors comfort, and get it done.
“We have all the expertise we need to make the industry work, so let’s stop searching for the perfect solution elsewhere. Take whatever we have, and just make it work.’’
The Century boss said investors are not ploughing the much-needed resources into gas and power projects for several reasons, including constantly changing regulations, difficulty in enforcing agreements, ease of doing business, and unrealistic tariffs.
“The federal government needs to relax its regulations enough to allow a real gas and power sector come into existence and actually grow in a measurable form, driven by the private sector in partnership with the government.
“Market forces and competition should be allowed to drive gas and power tariffs rather than allowing the prices to be set by a regulator,” Umeh stated.
He argued that government’s role should be limited to providing appropriate regulations that will catalyse private entities to drive the much needed diversification in the country.
Umeh cited the example of several private estates in Lagos where steady, uninterrupted power is being supplied to as a result of the cost reflective tariffs that the residents pay, which is far less than what they would have paid to operate fuel or diesel generators with the related health and safety hazards they come with.
Speaking further on the issue, Umeh praised the federal government’s efforts so far to deregulate the power sector, but urged them to do more and do it with more urgency to help stem the alarming growth in unemployment rate in the country.
He argued that once the power industry is working and adequate power supply is guaranteed, investors would begin to see the country as an investment destination. “We must however understand that the privatisation of power does not guarantee immediate availability of power because it takes at least three years to build a power plant from ground breaking to actual generation. Private companies should be encouraged and incentivised to build power plants as well as strengthen transmission and distribution networks knowing that their investments will eventually be recovered through cost reflective tariffs,” he stated.