The Chairman, United Bank for Africa Plc
and Transnational Corporation Plc, Mr. Tony Elumelu, has asked the
Federal Government to take another look at the power sector by wresting
ownership from incompetent private operators and sell the firms to new
owners who are capable of successfully running them.
He made the call in Abuja on Tuesday at the ongoing 23rd Nigerian Economic Summit.
Elumelu stated that in as much as some
existing investors might not like the idea, the government could not
continue to allow the electricity distribution companies to hold the
nation down with inefficient power distribution.
He called for the recapitalization of
the firms and asked the Federal Government to increase its stake from
the current 49 per cent and sell the controlling shares in each of the
Discos to new investors, adding that the current operators had become
obstacles to the realization of the nation’s power capacity goal.
Elumelu stated, “Our people are very
enterprising and they want to succeed. But they need the right
environment to succeed. I appreciate what the government is doing for
electricity, but we need to do more.
“I empathize with the government on its
efforts in that sector. But Mr. Vice President, I think there is a lot
we can do to correct the ownership of that sector without affecting the
property rights of the investors. That sector must be dealt with for us
to have power to do business.”
Despite the over N700bn already provided
by the government for the power sector, Elumelu stated that the amount
would be exhausted in a few months’ time, adding, “The market should be
able to sustain itself. This is what I think. The government has to take
actions that will ensure the adequate funding of the operations of the
Discos.
“Mr. VP, I know some of the operators
in this sector will not like this. This is my idea. We cannot reverse
what has been done, but we can creatively address what has been done.
“If the government, to my understanding,
has 49 per cent of the Discos and the private companies have 51 per
cent, can we ask these companies to recapitalize? Let the Federal
Government recapitalize them. They will not be able to put in more
capital. So, the Federal Government, through the Federal Ministry of
Finance Incorporated, should increase its holding.”
He added, “Then post recapitalization,
the Federal Government sells its controlling shares to new investors who
have the financial wherewithal to properly finance the operations of
the Discos. This is important because in a situation where the current
operators don’t have the funds to run them, if the Federal Government
wants to sell its shares in the Discos, investors who should have
brought in their capital won’t come in if the controlling shares
continue to remain with the current operators.
“When this is done, then we can have new
investors who can come in and run the Discos efficiently. It doesn’t
matter where they come from, but they should be investors who have the
financial capacity and tested expertise to manage the distribution
segment of the sector in such a way that they can deliver effective
services.”
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