The federal government in July of this year sacked the management of six disco’s as a result of poor performance and appointed new ones to oversee the operations. Six months after, they asking for a loan of $500 million from the World Bank.
According to the World Bank, this project is to help boost the electricity access through metering and create job opportunities by increasing the productivity of private and public enterprises that will make the meters available at affordable prices for all Nigerians.
The Federal government has now ordered all banks holding majority stakes in the six electricity distribution companies to divest their shares within twelve months.
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These moves brings an end to the epileptic power supply Nigerians have been enduring for years now.
Energy policy analyst, team lead of platforms Africa, Adeola Yusuf speaking on TVCBreakfast with Kemi Fola-Adeyemo and Veronica Dan-Ikpoyi said the world bank intervention is not just happening now.
According to him, this is not the first time the world bank would engage in this kind of intervention as it has been doing it for a number of countries.
He noted that this intervention was put on the table for the federal government to access last year but it didn’t for some reasons.
Recalling the contemporary history of Nigerian power sector, Mr Yusuf said “On Friday, November 1, 2013, the Nigerian government privatised the power sector, and what they did by that was to sell 60% of the share in assets belonging to the federal government in the power sector.
“Assets that were affected were those in the generation stratum of the power value chain and the distribution stratum of the power value chain.
“We have three strata, the generation, the transmission and the distribution. Government sold assets in the generation stratum and the distribution stratum and that was what change made us to change from NEPA, PHCN to discos.
“Government has 100% share until the Friday 60% was sold. The remaining 40% was being managed by the Bureau of Public Enterprise.
“In all of these, management and all there was no remarkable difference.
“The president had to ensure that even though it was called restructuring, the prime minister on Wednesday came out pont blank to say that, six managing directors of six discos were sacked.
“The banks were complaining that the facilities were not being worked on, Nigerians too were complaining that there is no sufficient electricity.
“The President however had to sack them and allow the banks to take charge, so they needed to sell it to those that would understand it. And before that could be done, Nigerian has to go back to the World Bank to get the $500 million so as to help in ensuring that, banks got their money back and those that are competent but do not have the financial muscle are able to assess something to get those assets on its head.
Mr Yusuf added that these loans don’t come out free of charge as it is not a grant. There will be conditions attached to it even though we are not privy to those conditions.
The government at that moment cannot assess that money and if they had been opportune to, it will go to the investors that have failed to service their loans from the bank.
Speaking further, Mr Yusuf said the power sector is a highly technical sector and some people who have the technical know how don’t have the financial backing.
Again, those that want to invest do not have the technical knowhow, so what the government is putting on the ground is to ensure that whoever have those technical know how can assess that loan from them and get the assets from the banks.
It will also be restructured in a way that the money will be paid back and the service that they want to provide to Nigerians is accessible.
The money will also be domiciled with the CBN, so whoever that will be interested, will have to speak with the CBN.
Mr Yusuf stated that because of the repeated failure, in the power sector, and the amount involved, the federal government would not want to collect the money and play cards with it.
He added that it behooves on Nigerians to clamour and ensure that the loan being given by the world bank is well managed.
“The government has to do the right thing”.
Mr Yusuf who stated that one of the problems of the power sector is lack of investment added that for a country to move forward, it has to take its power sector seriously.
“If government will not do this, it will wait for a long time before they can see any one to do it.”
