The Executive Vice Chairman of Alpha African Advisory, Mr. Mustafa Chike-Obi, on Monday, assured that the liberalisation of the power sector would, in the long run, draw over $30 billion worth of investment to the power sector in the next three years.
Chike-Obi, who was also the previous Managing Director of the Assets Management Corporation of Nigeria (AMCON), disclosed this at the monthly capacity-building forum of the Finance Correspondents Association of Nigeria (FICAN).
Affordable power supply: The ex AMCON boss said it would make the sector profitable and allow Nigerians to have a cheap and stable electricity supply.
He noted that since every Nigerian have the right to a stable electricity supply, just as every human being is entitled to possess a telephone or a good car, the only way to get the projected amount of investment is by billing the ones who require the power supply the most, the market price.
What should be done: The ex AMCON boss explained that if the power business is made profitable whereby tariff on electricity is taken out and power companies are granted the permission to sell to individuals they choose at a market-driven price, many investors will willingly come into the sector.
He sighted Ikoyi, in Lagos as an example. He explained that in some places in the area, residents pay around N50 to N60 per Kilowatt-hour, and they get about 90% of power supply. He added that a generator costs about N160 per kilowatt-hour with its attendant inconveniences.
“Most people who have generators will be happier to pay N160 per kilowatt-hour of electricity, but the government said no. We can only charge Nigerians N60 per kilowatt-hour.
“But if you allow these power companies to sell at N160 per kilowatt-hour, they will make so much money from the rich people at the beginning that they will start creating more power.”
Present challenge: This might be slightly difficult as electricity tariffs might increase, following FG’s plan to raise $4.7 billion to recapitalise the electricity distribution companies (DisCos) as well as upgrade power distribution equipment in the country.
This is the kind of simple yet innovative thinking the FG needs to imbibe as such is what is needed to drive the economy forward.